>> From our studios, in the heart of Silicon Valley, Palo Alto, California, this is a CUBE Conversation. >> Welcome to this CUBE Conversation here in Palo Alto, California. I'm John Furrier, host of theCUBE. We are here with Arpit Joshipura, GM of Networking, Edge, IoT for the Linux Foundation. Arpit, great to see you again, welcome back to theCUBE, thanks for joining us. >> Thank you, thank you. Happy to be here. >> So obviously, we love the Linux Foundation. We've been following all the events; we've chatted in the past about networking. Computer storage and networking just doesn't seem to go away with cloud and on-premise hybrid cloud, multicloud, but open-source software continues to surpass expectations, growth, geographies outside the United States and North America, just overall, just greatness in software. Everything's an abstraction layer now; you've got Kubernetes, Cloud Native- so many good things going on with software, so congratulations. >> Well thank you. No, I think we're excited too. >> So you guys got a big event coming up in China: OSS, Open Source Summit, plus KubeCon. >> Yep. >> A lot of exciting things, I want to talk about that in a second. But I want to get your take on a couple key things. Edge and IoT, deep learning and AI, and networking. I want to kind of drill down with you. Tell us what's the updates on the projects around Linux Foundation. >> Okay. >> The exciting ones. I mean, we know Cloud Native CNCF is going to take up more logos, more members, keeps growing. >> Yep. >> Cloud Native clearly has a lot of opportunity. But the classic in the set, certainly, networking and computer storage is still kicking butt. >> Yeah. So, let me start off by Edge. And the fundamental assumption here is that what happened in the cloud and core is going to move to the Edge. And it's going to be 50, 100, 200 times larger in terms of opportunity, applications, spending, et cetera. And so what LF did was we announced a very exciting project called Linux Foundation Edge, as an umbrella, earlier in January. And it was announced with over 60 founding members, right. It's the largest founding member announcement we've had in quite some time. And the reason for that is very simple- the project aims at unifying the fragmented edge in IoT markets. So today, edge is completely fragmented. If you talk to clouds, they have a view of edge. Azure, Amazon, Baidu, Tencent, you name it. If you talk to the enterprise, they have a view of what edge needs to be. If you talk to the telcos, they are bringing the telecom stack close to the edge. And then if you talk to the IoT vendors, they have a perception of edge. So each of them are solving the edge problems differently. What LF Edge is doing, is it is unifying a framework and set of frameworks, that allow you to create a common life cycle management framework for edge computing. >> Yeah. >> Now the best part of it is, it's built on five exciting technologies. So people ask, "You know, why now?" So, there are five technologies that are converging at the same time. 5G, low latency. NFV, network function virtualization, so on demand. AI, so predictive analytics for machine learning. Container and microservices app development, so you can really write apps really fast. And then, hardware development: TPU, GPU, NPU. Lots of exciting different size and shapes. All five converging; put it close to the apps, and you have a whole new market. >> This is, first of all, complicated in the sense of... cluttered, fragmented, shifting grounds, so it's an opportunity. >> It's an opportunity. >> So, I get that- fragmented, you've got the clouds, you've got the enterprises, and you've got the telcos all doing their own thing. >> Yep. >> So, multiple technologies exploding. 5G, Wi-Fi 6, a bunch of other things you laid out, >> Mhmm. >> all happening. But also, you have all those suppliers, right? >> Yes. >> And, so you have different manufacturers-- >> And different layers. >> So it's multiple dimensions to the complexity. >> Correct, correct. >> What are you guys seeing, in terms of, as a solution, what's motivating the founding members; when you say unifying, what specifically does that mean? >> What that means is, the entire ecosystem from those markets are coming together to solve common problems. And I always sort of joke around, but it's true- the common problems are really the plumbing, right? It's the common life cycle management, how do you start, stop, boot, load, log, you know, things like that. How do you abstract? Now in the Edge, you've 400, 500 interfaces that comes into an IoT or an edge device. You know, Zigbee, Bluetooth, you've got protocols like M2T; things that are legacy and new. Then you have connectivity to the clouds. Devices of various forms and shapes. So there's a lot of end by end problems, as we call it. So, the cloud players. So for LF Edge for example, Tencent and Baidu and the cloud leaders are coming together and saying, "Let's solve it once." The industrial IoT player, like Dynamic, OSIsoft, they're coming in saying, "Let's solve it once." The telcos- AT&T, NTT, they're saying "Let's solve it once. And let's solve this problem in open-source. Because we all don't need to do it, and we'll differentiate on top." And then of course, the classic system vendors that support these markets are all joining hands. >> Talk about the business pressure real quick. I know, you look at, say, Alibaba for instance, and the folks you mentioned, Tencent, in China. They're perfecting the edge. You've got videos at the edge; all kinds of edge devices; people. >> Correct. >> So there's business pressures, as well. >> The business pressure is very simple. The innovation has to speed up. The cost has to go down. And new apps are coming up, so extra revenue, right? So because of these five technologies I mentioned, you've got the top killer apps in edge are anything that is, kind of, video but not YouTube. So, anything that the video comes from 360 venues, or drones, things like that. Plus, anything that moves, but that's not a phone. So things like connected cars, vehicles. All of those are edge applications. So in LF Edge, we are defining edge as an application that requires 20 milliseconds or less latency. >> I can't wait for someone to define- software define- "edge". Or, it probably is defined. A great example- I interviewed an R&D engineer at VMware yesterday in San Francisco, it was at the RADIO event- and we were just riffing on 5G, and talking about software at the edge. And one of the advances >> Yes. >> that's coming is splicing the frequency so that you can put software in the radios at the antennas, >> Correct. Yeah. >> so you can essentially provision, in real time. >> Correct, and that's a telco use case, >> Yeah. >> so our projects at the LF Edge are EdgeX Foundry, Akraino, Edge Virtualization Engine, Open Glossary, Home Edge. There's five and growing. And all of these software projects can allow you to put edge blueprints. And blueprints are really reference solutions for smart cities, manufacturing, telcos, industrial gateways, et cetera et cetera. So, lots of-- >> It's kind of your fertile ground for entrepreneurship, too, if you think about it, >> Correct; startups are huge. >> because, just the radio software that splices the radio spectrum is going to potentially maybe enable a service provider market, and towers, right? >> Correct, correct. >> Own my own land, I can own the tower and rent it out, one radio. >> Yep. >> So, business model innovations also an opportunity, >> It's a huge-- >> not just the business pressure to have an edge, but-- >> Correct. So technology, business, and market pressures. All three are colliding. >> Yeah, perfect storm. >> So edge is very exciting for us, and we had some new announcements come out in May, and more exciting news to come out in June, as well. >> And so, going back to Linux Foundation. If I want to learn more. >> LFEdge.org. >> That's kind of the CNCF of edge, if you will, right? Kind of thing. >> Yeah. It's an umbrella with all the projects, and that's equivalent to the CNCF, right. >> Yeah. >> And of course it's a huge group. >> So it's kind of momentum. 64 founding members-- >> Huge momentum. Yeah, now we are at 70 founding members, and growing. >> And how long has it been around? >> The umbrella has been around for about five months; some of the projects have been around for a couple of years, as they incubate. >> Well let us know when the events start kicking in. We'll get theCUBE down there to cover it. >> Absolutely. >> Super exciting. Again, multiple dimensions of innovation. Alright, next topic, one of my favorites, is AI and deep learning. AI's great. If you don't have data you can't really make AI work; deep learning requires data. So this is a data conversation. What's going on in the Linux Foundation around AI and deep learning? >> Yeah. So we have a foundation called LF Deep Learning, as you know. It was launched last year, and since then we have significantly moved it forward by adding more members, and obviously the key here is adding more projects, right. So our goal in the LF Deep Learning Foundation is to bring the community of data scientists, researchers, entrepreneurs, academia, and users to collaborate. And create frameworks and platforms that don't require a PhD to use. >> So a lot of data ingestion, managing data, so not a lot of coding, >> Platforms. >> more data analyst, and/or applications? >> It's more, I would say, platforms for use, right? >> Yeah. >> So frameworks that you can actually use to get business outcomes. So projects include Acumos, which is a machine learning framework and a marketplace which allows you to, sort of, use a lot of use cases that can be commonly put. And this is across all verticals. But I'll give you a telecom example. For example, there is a use case, which is drones inspecting base stations-- >> Yeah. >> And doing analytics for maintenance. That can be fed into a marketplace, used by other operators worldwide. You don't have to repeat that. And you don't need to understand the details of machine learning algorithms. >> Yeah. >> So we are trying to do that. There are projects that have been contributed from Tencent, Baidu, Uber, et cetera. Angel, Elastic Deep Learning, Pyro. >> Yeah. >> It's a huge investment for us. >> And everybody wins when there's contribution, because data's one of those things where if there's available, it just gets smarter. >> Correct. And if you look at deep learning, and machine learning, right. I mean obviously there's the classic definition; I won't go into that. But from our perspective, we look at data and how you can share the data, and so from an LF perspective, we have something called a CDLA license. So, think of an Apache for data. How do you share data? Because it's a big issue. >> Big deal. >> And we have solved that problem. Then you can say, "Hey, there's all these machine learning algorithms," you know, TensorFlow, and others, right. How can you use it? And have plugins to this framework? Then there's the infrastructure. Where do you run these machine learning? Like if you run it on edge, you can run predictive maintenance before a machine breaks down. If you run it in the core, you can do a lot more, right? So we've done that level of integration. >> So you're treating data like code. You can bring data to the table-- >> And then-- >> Apply some licensing best practices like Apache. >> Yes, and then integrate it with the machine learning, deep learning models, and create platforms and frameworks. Whether it's for cloud services, for sharing across clouds, elastic searching-- >> And Amazon does that in terms of they vertically integrate SageMaker, for instance. >> That's exactly right. >> So it's a similar-- >> And this is the open-source version of it. >> Got it- oh, that's awesome. So, how does someone get involved here, obviously developers are going to love this, but-- >> LF Deep Learning is the place to go, under Linux Foundation, similar to LF Edge, and CNCF. >> So it's not just developers. It's also people who have data, who might want to expose it in. >> Data scientists, databases, algorithmists, machine learning, and obviously, a whole bunch of startups. >> A new kind of developer, data developer. >> Right. Exactly. And a lot of verticals, like the security vertical, telecom vertical, enterprise verticals, finance, et cetera. >> You know, I've always said- you and I talked about this before, and I always rant on theCUBE about this- I believe that there's going to be a data development environment where data is code, kind of like what DevOps did with-- >> It's the new currency, yeah. >> It's the new currency. >> Yeah. Alright, so final area I want to chat with you before we get into the OSS China thing: networking. >> Yeah. >> Near and dear to your heart. >> Near and dear to my-- >> Networking's hot now, because if you bring IoT, edge, AI, networking, you've got to move things around-- >> Move things around, (laughs) right, so-- >> And you still need networking. >> So we're in the second year of the LF Networking journey, and we are really excited at the progress that has happened. So, projects like ONAP, OpenDaylight, Tungsten Fabric, OPNFV, FDio, I mean these are now, I wouldn't say household names, but business enterprise names. And if you've seen, pretty much all the telecom providers- almost 70% of the subscribers covered, enabled by the service providers, are now participating. Vendors are completely behind it. So we are moving into a phase which is really the deployment phase. And we are starting to see, not just PoCs [Proofs of Concept], but real deployments happening, some of the major carriers now. Very excited, you know, Dublin, ONAP's Dublin release is coming up, OPNFV just released the Hunter release. Lots of exciting work in Fido, to sort of connect-- >> Yeah. >> multiple projects together. So, we're looking at it, the big news there is the launch of what's called OVP. It's a compliance and verification program that cuts down the deployment time of a VNF by half. >> You know, it's interesting, Stu and I always talk about this- Stu Miniman, CUBE cohost with me- about networking, you know, virtualization came out and it was like, "Oh networking is going to change." It's actually helped networking. >> It helped networking. >> Now you're seeing programmable networks come out, you see Cisco >> And it's helped. >> doing a lot of things, Juniper as well, and you've got containers in Kubernetes right around the corner, so again, this is not going to change the need, it's going to- It's not going to change >> It's just a-- >> the desire and need of networking, it's going to change what networking is. How do you describe that to people? Someone saying, "Yeah, but tell me what's going on in networking? Virtualization, we got through that wave, now I've got the container, Kubernetes, service mesh wave, how does networking change? >> Yeah, so it's a four step process, right? The first step, as you rightly said, virtualization, moved into VMs. Then came disaggregation, which was enabled by the technology SDN, as we all know. Then came orchestration, which was last year. And that was enabled by projects like ONAP and automation. So now, all of the networks are automated, fully running, self healing, feedback closed control, all that stuff. And networks have to be automated before 5G and IoT and all of these things hit, because you're no longer talking about phones. You're talking about things that get connected, right. So that's where we are today. And that journey continues for another two years, and beyond. But very heavy focused on deployment. And while that's happening, we're looking at the hybrid version of VMs and containers running in the network. How do you make that happen? How do you translate one from the other? So, you know, VNFs, CNFs, everything going at the same time in your network. >> You know what's exciting is with the software abstractions emerging, the hard problems are starting to emerge because as it gets more complicated, end by end problems, as you said, there's a lot of new costs and complexities, for instance, the big conversation at the Edge is, you don't want to move data around. >> No, no. >> So you want to move compute to the edge, >> You can, yeah-- >> But it's still a networking problem, you've still got edge, so edge, AI, deep learning, networking all tied together-- >> They're all tied together, right, and this is where Linux Foundation, by developing these projects, in umbrellas, but then allowing working groups to collaborate between these projects, is a very simple governance mechanism we use. So for example, we have edge working groups in Kubernetes that work with LF Edge. We have Hyperledger syncs that work for telecoms. So LFN and Hyperledger, right? Then we have automotive-grade Linux, that have connected cars working on the edge. Massive collaboration. But, that's how it is. >> Yeah, you connect the dots but you don't, kind of, force any kind of semantic, or syntax >> No. >> into what people can build. >> Each project is autonomous, >> Yeah. >> and independent, but related. >> Yeah, it's smart. You guys have a good view, I'm a big fan of what you guys are doing. Okay, let's talk about the Open Source Summit and KubeCon, happening in China, the week of the 24th of June. >> Correct. >> What's going on, there's a lot of stuff going on beyond Cloud Native and Linux, what are some of the hot areas in China that you guys are going to be talking about? I know you're going over. >> Yeah, so, we're really excited to be there, and this is, again, life beyond Linux and Cloud Native; there's a whole dimension of projects there. Everything from the edge, and the excitement of Iot, cloud edge. We have keynotes from Tencent, and VMware, and all the Chinese- China Mobile and others, that are all focusing on the explosive growth of open-source in China, right. >> Yeah, and they have a lot of use cases; they've been very aggressive on mobility, Netdata, >> Very aggressive on mobility, data, right, and they have been a big contributor to open-source. >> Yeah. >> So all of that is going to happen there. A lot of tracks on AI and deep learning, as a lot more algorithms come out of the Tencents and the Baidus and the Alibabas of the world. So we have tracks there. We have huge tracks on networking, because 5G and implementation of ONAP and network automation is all part of the umbrella. So we're looking at a cross-section of projects in Open Source Summit and KubeCon, all integrated in Shanghai. >> And a lot of use cases are developing, certainly on the edge, in China. >> Correct. >> A lot of cross pollination-- >> Cross pollination. >> A lot of fragmentation has been addressed in China, so they've kind of solved some of those problems. >> Yeah, and I think the good news is, as a global community, which is open-source, whether it's Europe, Asia, China, India, Japan, the developers are coming together very nicely, through a common governance which crosses boundaries. >> Yeah. >> And building on use cases that are relevant to their community. >> And what's great about what you guys have done with Linux Foundation is that you're not taking positions on geographies, because let the clouds do that, because clouds have-- >> Clouds have geographies, >> Clouds, yeah they have agents-- >> Edge may have geography, they have regions. >> But software's software. (laughs) >> Software's software, yeah. (laughs) >> Arpit, thanks for coming in. Great insight, loved talking about networking, the deep learning- congratulations- and obviously the IoT Edge is hot, and-- >> Thank you very much, excited to be here. >> Have a good trip to China. Thanks for coming in. >> Thank you, thank you. >> I'm John Furrier here for CUBE Conversation with the Linux Foundation; big event in China, Open Source Summit, and KubeCon in Shanghai, week of June 24th. It's a CUBE Conversation, thanks for watching.

>> Live, from New York City, it's theCUBE. Covering Lenovo Transform 2.0. Brought to you by, Lenovo. (electronic music) >> Welcome back to theCUBE's live coverage of Lenovo Transform, here in New York City. I'm your host, Rebecca Knight, along with my cohost Stu Miniman. We have two guests here on this segment, We have Kirk Skaugen, he is the president of Lenovo Data Center Group, and Brad Anderson, the Corporate Vice President of Enterprise Mobility for NetApp. Thanks for coming on the program. >> Thank you for having us. >> So the big news of the day, the NetApp Lenovo partnership, explain to our viewers exactly what this means. These are two global powerhouses joining forces. >> Yeah sure, so I think Lenovo has had an amazing year. Last year in our Transform 1.0 we announced the largest server portfolio in our history. And this year we announced the largest data center, data management storage portfolio in our history. With a partnership with NetApp, so we're creating a multi-billion dollar global alliance, a multi-year alliance and it has a place in a joint venture in China as well as we'll be distributing NetApp products in over 160 countries in the world. >> So tell us about the background to this partnership. How did it come about? >> Well, you know, for NetApp we were looking for expanding our reach, and there was two markets that were kind of underserved in. One being kind of the commercial SMB SME channel, and Lenovo has a high-velocity channel there, a strong position. So Lenovo made complete sense in that space as well as in China, where we have a strong brand but we're underserved there as well, so who is better in China than Lenovo? So for us this is all about global market and then the fact that they're a server vendor is just icing on the cake, because the other two server vendors in the marketplace are also our competitors. And then, Lenovo is so much more compatible and complementary to our entire business. >> Kirk, maybe you could spend a little more, because when you look at storage today, storage is really built on servers. You know, NetApp is, you know, at it's heart a software company, even back in the day NetApp was never, some of the other storage companies spent a lot of time and money on the hardware pieces. And of course had reliable, good, trustable hardware, but maybe explain how much, kind of, I.P. goes into this partnership. >> Yeah, sure. So I think today we have about 15 percent coverage of the overall storage market within Lenovo. We've grown our flash array business over 100 percent over the last four quarters. IDC had us at 30% quarter to quarter growth. So we've done well, but we've only cover 15% of the market. After this announcement, and shipping now today, we'll cover over 90% of the market in more than 160 countries. So we're using our global supply chain which is ranked number five in the world by Garner. Manufacturing in Europe, in China, in Mexico et cetera. Really expand this out through our channel partnership program. And in China we're taking a very unique approach to this joint venture. This isn't about taking global products and just trying to force fit them into China. China has unique software solutions, unique hyper scale requirements. So we're pooling our R and D there. Lenovo will be a 51% owner, NetApp a 49% owner. Brad's going to be on the board and there we're going to be delivering products in China for China. >> Yeah, is it, you've got a lot of experience with that. You talk about coming in the future there's an NFV software and hardware solution in China, so Lenovo has some experience doing this kind of engagement, you know. >> Yeah, I think we have a more than 50% growth now, year on year in China. We retooled a lot of the operations that we had there. We have a really nice, broad portfolio now since we launched Think System and Think Agile so it's a nice place to grow on. But today we talked about the joint venture with NetApp and also the fact that over the next year we'll be building out a telecom NFV company after having China Mobile and China Telecom with us as at Mobile World Congress. As well as new edge gateway and edge server solutions. >> Brad, I know cloud is in your title for what you are doing, when I hear NetApp talking, I see NetApp at all the cloud shows we go to. It's a very different world than when I think about NetApp ten years or twenty years ago as like, you know, the Nas Filer company. So bring us up to speed of kind of the NetApp today the momentum and what this brings. >> Yeah, I mean we are going through our own transformation where we were principally a storage company and now we want to be a data company, and increasingly to be a data company you got to be a cloud company. And so, we continue to develop what we think are the, you know, the best storage products in the world, but they are all cloud connected. 'Cause we want data to be able to flow from prim to cloud and customers be able to, you know. That's what really kind of fuels these digital enterprises is that data is the new oil. And so in doing that we have kind of expanded NetApp's charter significantly to being the data authority in hybrid cloud. Hybrid being both the private and the public. And so part of my business is really focused on providing products and solutions so customers can have the same experience in building their own private clouds that they enjoy in the public. And then on the public side we have partnerships with all the hyper scalers to put NetApp's in there so they can deliver native cloud data services. And so, this is a very different company where we're getting more and more cloudy every day. (Rebecca laughs). And that's part of our transformation intentionally. >> So, the transformation, it's the theme of this conference and you were up on the main stage talking about Lenovo's turning this corner and really accelerating its growth, and also talking about the transformation from within the company. Changing the look of the leadership team in particular. Can you tell our viewers a little bit more about that strategy. >> Sure, so we acquired the IBM system X business in late 2014 and we did some things really well and we did some things that we've learned from. So we spent, you know, basically the last 18 months transforming the whole company. New channel programs, new system integrator partnerships, new training certifying over 11,000 people in the world now. Tripling the number of our solution recipes. And we have transformed The management team as well. We have replaced about 19 executives because we wanted the right balance of external and internal perspectives from our competitors as well as from ex-Lenovo and ex-IBM employees. So we feel like we have a very customer-centric organization now and, again, Gardner now is saying we are growing 49% year on year in units, IDC said we are growing 87% year on year in revenues. So I think customers are responding to the new product line. Over the last year the Think System brand truly meant the highest customer performance, the highest reliability, the highest customer satisfaction. And as a result it does take a while to transform. And I think that over the last 12 months you've seen that and we're exponentially growing now as a company. >> And you see it in your results. I mean, they are outstanding. >> So Brad, bring us inside the products a little bit. So we've got, it's the Think System DE and DM. Of course the storage industry very much, they need to trust it, they need to understand it. Gives little to understand, I believe DE maybe has something to do with the >> The E series >> The E series there and tell us the DM series, what's underneath there and how do people understand what's different and what's the same. >> Yeah, I mean the. We're taking platforms across our E series, our FAS and our all flash arrays. So the DE corresponds to the E series. The DM will have our FAS products as well as our all flash array products in there. So that's kind of the mapping. We're putting initially I think, ten products in there. We have the capacity to expand and I'm sure we're going to learn a lot because these are serving markets that NetApp doesn't typically serve. So I think not only is this going to give Lenovo the tools to compete, it's going to give us a lot of information to even build better products, better solutions for both NetApp and our Lenovo customers. So we're super excited about that. The second thing is, it's OnTab, it's the same core software, and all the value and performance testing and validation you get with NetApp. That all goes into the Lenovo branded products as well. And we have made it one of our hallmarks is our data fabric. All of the data services that are on top of this that you can move data and manage data between platforms, that is really important for the NetApp customer. All those values extend to the Lenovo customer. So if they also have NetApp in their environment, or vice-versa, they can share or move data between both those platforms. So that's, nowhere else in the industry is that possible across vendors let alone within. >> So how does it work when you are in the product development process. Two companies, both relentlessly focused on customers. This is part of your culture, part of your DNA. So how do you work together in terms of innovating and collaborating. >> Well, I think the first thing is you just look at the core business: our server business and NetApp branded storage, or Lenovo branded storage based on NetApp's portfolio. We're going to have a better together solution. So the first thing we're looking at is a set of solution recipes so that when you use NetApp and Lenovo together, you're going to get a better experience as a customer base. So that's why I am excited today. We've launched three times as many engineered solutions as we did a year ago. And trained these 11,000 people because we have a very solution oriented sales force and a very complementary channel. From a development perspective, we're going to be building X Clarity management into our portfolio. So the same systems management software that is mission critical for Lenovo server products will now manage the big system DE and DM products. So it's a very familiar management interface for customers, there's an engineering effort gone with that. And then on service and support, we're going to use over 10,000 people around the world that Lenovo has to go service and support these products. So we can deliver a premium customer experience. Whether you're buying the server or the storage. And back to the customer base: we're going to, especially in China, have deep engineering collaborations. Where we're walking into those customer bases and asking what's unique about the China market. >> And, and. It really helps that the two companies are very complementary. So NetApp has deep storage expertise, Lenovo has tremendous compute expertise. So they are very complementary and as customers want more and more complete solutions, we are learning, our engineers are learning from each other and it doesn't hurt the fact that we have a large engineering. We NetApp, have a large engineering population in the research triangle where Kirk's people are at. >> That's right. We're probably one kilometer away from each other in research triangle park. >> Geography matters, location location location. >> No, and our two support organizations are next door as well. So I think that proximity will only contribute to the collaboration. >> Yeah, exactly. >> Alright, so the storage industry actually has a relatively good track record of some deep, long partnerships. NetApp has had a number of them over the years. Tell us, what does success look like if we look back three years from now, what's this partnership. >> Well, what we said publicly is we plan to have a multi-billion dollar, multi-year alliance. So that's going to be fantastic as we grow in over 160 countries. We're going to use Lenovo's extensive supply chain network. So you know as one of the largest kind of procurers of componentry and things around the world, we get to leverage this global factory network to build even more value into that situation. And in China specifically, we've set a goal of being a top three storage player. So we both have probably single digit share in China but together with this collaboration we are setting sights quite high to be in the top three over the next several years. >> I think that's exactly right and I think those are all achievable goals. But right now, we want to get out the gate fast. I mean this is a partnership with two companies with a lot of momentum and I see this as a huge opportunity for both our companies to kind of amplify that momentum near term. And so while there's a lot of excitement on the future, I think success is going to look like, you know, some very exciting results that Kirk can share at Transform 3.0 next year. >> That's right. And for our customer base, we have already gone into production. Taking orders, as of today and tons of engineering, tons of manufacturing development. So we'll have a whole host of seed units and early access units. Our customers can get their hands on this stuff right away and start testing it in their environment. >> As you said, it is an audacious vision. You announced an audacious vision last year, you did another one again this year. So when you think about what you want to be talking about next year. You said what success looks like. What are some other things that you're working on? You said, this is a process, Lenovo has turned the corner and it's got a lot of momentum. But what else are you, what else do you have on tap that you're... >> Well, if we tell all of you that, (Rebecca laughs) we won't have this here next year. >> Yeah >> But I think today is about entry and midrange. About expanding Lenovo's breadth from 15 to 90% of the market and being very aggressive against our top competitors that have a combined server storage portfolio. And I think as I've gone around the world, I've been in Latin America, in India, our channel partners are incredibly excited about this. So I think while other customers might be taking business more direct, we've traditionally been very channel-centric. So, I've seen a lot of pull for choice in the market and I think that's what we're going to deliver to our channel partners. But we will have a lot more in store, that I can promise you. This is phase one of a multi-phase, multi-year plan. >> I think there's a lot of things, there's a lot of possibilities on the product development side and how we can do better products, but I think a lot of success is going to look, it's going to come in our global market. Already, Kirk, since I've been here, I've had a channel partner come up and said "Hey, this makes me rethink my channel partners all over again", because now that channel partner who's a Lenovo has the full breadth of the storage portfolio. So I think this is going to be really good for both of us. Particularly when, you know, Lenovo and NetApp are both very channel friendly partners and companies and I think this I going to be a catalyst to have more people on our side than ever before. >> Kirk, just last thing, just give you the opportunity to talk about some of the other breadth and choice and other things that Lenovo has going on. We're going to talk to some of your team about, you know, hyper converge and hyper scale and other hyper things, but yeah. (Rebecca laughs) >> Well I think the good news about our growth now is that we're doing it across multiple segments in the industry. There isn't just one part of the market that growing. So last year we set an audacious goal of being the largest supercomputer company in the world by 2020. We've now crossed that actually this year. So we are the largest supercomputer company in the world. About one in every four supercomputers now are there. And we're expanding that into a lot of AI offerings as well with our four artificial intelligence centers, from China, Germany, Taipei, Beijing. All having customers bring their AI workloads into a controlled environment with our partners where there's intel and video or the FGBA vendors. So super-computing is alive and well and we continue to innovate with our warm-water cooling technology that's going to be here on display. We think we're building one of the largest supercomputers in Europe right now using that technology. So not just helping solve global warming but being more energy-efficient while we are computing on that as well. In hyper scale we've grown to about delivering six of the top ten hyper scalers products. And we're doing that through, basically starting with a white sheet of paper with our customers and building more than thirty customized products. In the motherboard, in the system, in putting it through our entire supply chain. Versus just, in the past maybe two years ago, maybe just leveraging ODM products, so. Significant growth in hyper scale where we're bringing on new billion dollar customers on a regular basis now. And then in flash arrays, our traditional business, we were over 100% growth year on year. So we're building off of momentum. We had great products but only covering 15% of the market, now much larger. Last but not least, we did announce since Transform, new divisions in embedded and IoT as well as in telecommunications NFVF software. We think each of those can be billion dollar groups within Lenovo, so that's probably a lot of what we would be talking about next year is announcements and innovations we've had. Would be Transform 3.0 probably. (Rebecca laughs) >> Well, we're already looking forward to the next Transform. >> 3.0 will be CUBEd so we look forward to that. >> Stu, very nice. Very nice. Excellent. Well thank you so much Brad and Kirk for being on the show, I really appreciate it. >> Thank you very much. >> I'm Rebecca Knight for Stu Miniman. We will have more from Lenovo Transform and theCUBE's live coverage, just after this. (intense electronic music)

(electronic dance music) (Intel Jingle) (ethereal electronic dance music) ♪ Okay ♪ (upbeat techno dance music) ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Yeah everybody get loose yeah ♪ ♪ Yeah ♪ ♪ Ye-yeah yeah ♪ ♪ Yeah yeah ♪ ♪ Everybody everybody yeah ♪ ♪ Whoo whoo ♪ ♪ Whoo whoo ♪ ♪ Whoo yeah ♪ ♪ Everybody get loose whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ >> As a courtesy to the presenters and those around you, please silence all mobile devices, thank you. (electronic dance music) ♪ Everybody get loose ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ (upbeat salsa music) ♪ Ha ha ha ♪ ♪ Ah ♪ ♪ Ha ha ha ♪ ♪ So happy ♪ ♪ Whoo whoo ♪ (female singer scatting) >> Ladies and gentlemen, please take your seats. Our program will begin momentarily. ♪ Hey ♪ (female singer scatting) (male singer scatting) ♪ Hey ♪ ♪ Whoo ♪ (female singer scatting) (electronic dance music) ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ Red don't go ♪ ♪ All hands are in don't go ♪ ♪ In don't go ♪ ♪ Oh red go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are red don't go ♪ ♪ All hands are in red red red red ♪ ♪ All hands are in don't go ♪ ♪ All hands are in red go ♪ >> Ladies and gentlemen, there are available seats. Towards house left, house left there are available seats. If you are please standing, we ask that you please take an available seat. We will begin momentarily, thank you. ♪ Let go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ (upbeat electronic dance music) ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ I live ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Hey ♪ ♪ Yeah ♪ ♪ Oh ♪ ♪ Ah ♪ ♪ Ah ah ah ah ah ah ♪ ♪ Just make me ♪ ♪ Just make me ♪ (bouncy techno music) >> Ladies and gentlemen, once again we ask that you please take the available seats to your left, house left, there are many available seats. If you are standing, please make your way there. The program will begin momentarily, thank you. Good morning! This is Lenovo Transform 2.0! (keyboard clicks) >> Progress. Why do we always talk about it in the future? When will it finally get here? We don't progress when it's ready for us. We need it when we're ready, and we're ready now. Our hospitals and their patients need it now, our businesses and their customers need it now, our cities and their citizens need it now. To deliver intelligent transformation, we need to build it into the products and solutions we make every day. At Lenovo, we're designing the systems to fight disease, power businesses, and help you reach more customers, end-to-end security solutions to protect your data and your companies reputation. We're making IT departments more agile and cost efficient. We're revolutionizing how kids learn with VR. We're designing smart devices and software that transform the way you collaborate, because technology shouldn't just power industries, it should power people. While everybody else is talking about tomorrow, we'll keep building today, because the progress we need can't wait for the future. >> Please welcome to the stage Lenovo's Rod Lappen! (electronic dance music) (audience applauding) >> Alright. Good morning everyone! >> Good morning. >> Ooh, that was pretty good actually, I'll give it one more shot. Good morning everyone! >> Good morning! >> Oh, that's much better! Hope everyone's had a great morning. Welcome very much to the second Lenovo Transform event here in New York. I think when I got up just now on the steps I realized there's probably one thing in common all of us have in this room including myself which is, absolutely no one has a clue what I'm going to say today. So, I'm hoping very much that we get through this thing very quickly and crisply. I love this town, love New York, and you're going to hear us talk a little bit about New York as we get through here, but just before we get started I'm going to ask anyone who's standing up the back, there are plenty of seats down here, and down here on the right hand side, I think he called it house left is the professional way of calling it, but these steps to my right, your left, get up here, let's get you all seated down so that you can actually sit down during the keynote session for us. Last year we had our very first Lenovo Transform. We had about 400 people. It was here in New York, fantastic event, today, over 1,000 people. We have over 62 different technology demonstrations and about 15 breakout sessions, which I'll talk you through a little bit later on as well, so it's a much bigger event. Next year we're definitely going to be shooting for over 2,000 people as Lenovo really transforms and starts to address a lot of the technology that our commercial customers are really looking for. We were however hampered last year by a storm, I don't know if those of you who were with us last year will remember, we had a storm on the evening before Transform last year in New York, and obviously the day that it actually occurred, and we had lots of logistics. Our media people from AMIA were coming in. They took the, the plane was circling around New York for a long time, and Kamran Amini, our General Manager of our Data Center Infrastructure Group, probably one of our largest groups in the Lenovo DCG business, took 17 hours to get from Raleigh, North Carolina to New York, 17 hours, I think it takes seven or eight hours to drive. Took him 17 hours by plane to get here. And then of course this year, we have Florence. And so, obviously the hurricane Florence down there in the Carolinas right now, we tried to help, but still Kamran has made it today. Unfortunately, very tragically, we were hoping he wouldn't, but he's here today to do a big presentation a little bit later on as well. However, I do want to say, obviously, Florence is a very serious tragedy and we have to take it very serious. We got, our headquarters is in Raleigh, North Carolina. While it looks like the hurricane is just missing it's heading a little bit southeast, all of our thoughts and prayers and well wishes are obviously with everyone in the Carolinas on behalf of Lenovo, everyone at our headquarters, everyone throughout the Carolinas, we want to make sure everyone stays safe and out of harm's way. We have a great mixture today in the crowd of all customers, partners, industry analysts, media, as well as our financial analysts from all around the world. There's over 30 countries represented here and people who are here to listen to both YY, Kirk, and Christian Teismann speak today. And so, it's going to be a really really exciting day, and I really appreciate everyone coming in from all around the world. So, a big round of applause for everyone whose come in. (audience applauding) We have a great agenda for you today, and it starts obviously a very consistent format which worked very successful for us last year, and that's obviously our keynote. You'll hear from YY, our CEO, talk a little bit about the vision he has in the industry and how he sees Lenovo's turned the corner and really driving some great strategy to address our customer's needs. Kirk Skaugen, our Executive Vice President of DCG, will be up talking about how we've transformed the DCG business and once again are hitting record growth ratios for our DCG business. And then you'll hear from Christian Teismann, our SVP and General Manager for our commercial business, get up and talk about everything that's going on in our IDG business. There's really exciting stuff going on there and obviously ThinkPad being the cornerstone of that I'm sure he's going to talk to us about a couple surprises in that space as well. Then we've got some great breakout sessions, I mentioned before, 15 breakout sessions, so while this keynote section goes until about 11:30, once we get through that, please go over and explore, and have a look at all of the breakout sessions. We have all of our subject matter experts from both our PC, NBG, and our DCG businesses out to showcase what we're doing as an organization to better address your needs. And then obviously we have the technology pieces that I've also spoken about, 62 different technology displays there arranged from everything IoT, 5G, NFV, everything that's really cool and hot in the industry right now is going to be on display up there, and I really encourage all of you to get up there. So, I'm going to have a quick video to show you from some of the setup yesterday on a couple of the 62 technology displays we've got on up on stage. Okay let's go, so we've got a demonstrations to show you today, one of the greats one here is the one we've done with NC State, a high-performance computing artificial intelligence demonstration of fresh produce. It's about modeling the population growth of the planet, and how we're going to supply water and food as we go forward. Whoo. Oh, that is not an apple. Okay. (woman laughs) Second one over here is really, hey Jonas, how are you? Is really around virtual reality, and how we look at one of the most amazing sites we've got, as an install on our high-performance computing practice here globally. And you can see, obviously, that this is the Barcelona supercomputer, and, where else in New York can you get access to being able to see something like that so easily? Only here at Lenovo Transform. Whoo, okay. (audience applauding) So there's two examples of some of the technology. We're really encouraging everyone in the room after the keynote to flow into that space and really get engaged, and interact with a lot of the technology we've got up there. It seems I need to also do something about my fashion, I've just realized I've worn a vest two days in a row, so I've got to work on that as well. Alright so listen, the last thing on the agenda, we've gone through the breakout sessions and the demo, tonight at four o'clock, there's about 400 of you registered to be on the cruise boat with us, the doors will open behind me. the boat is literally at the pier right behind us. You need to make sure you're on the boat for 4:00 p.m. this evening. Outside of that, I want everyone to have a great time today, really enjoy the experience, make it as experiential as you possibly can, get out there and really get in and touch the technology. There's some really cool AI displays up there for us all to get involved in as well. So ladies and gentlemen, without further adieu, it gives me great pleasure to introduce to you a lover of tennis, as some of you would've heard last year at Lenovo Transform, as well as a lover of technology, Lenovo, and of course, New York City. I am obviously very pleasured to introduce to you Yang Yuanqing, our CEO, as we like to call him, YY. (audience applauding) (upbeat funky music) >> Good morning, everyone. >> Good morning. >> Thank you Rod for that introduction. Welcome to New York City. So, this is the second year in a row we host our Transform event here, because New York is indeed one of the most transformative cities in the world. Last year on this stage, I spoke about the Fourth Industrial Revolution, and our vision around the intelligent transformation, how it would fundamentally change the nature of business and the customer relationships. And why preparing for this transformation is the key for the future of our company. And in the last year I can assure you, we were being very busy doing just that, from searching and bringing global talents around the world to the way we think about every product and every investment we make. I was here in New York just a month ago to announce our fiscal year Q1 earnings, which was a good day for us. I think now the world believes it when we say Lenovo has truly turned the corner to a new phase of growth and a new phase of acceleration in executing the transformation strategy. That's clear to me is that the last few years of a purposeful disruption at Lenovo have led us to a point where we can now claim leadership of the coming intelligent transformation. People often asked me, what is the intelligent transformation? I was saying this way. This is the unlimited potential of the Fourth Industrial Revolution driven by artificial intelligence being realized, ordering a pizza through our speaker, and locking the door with a look, letting your car drive itself back to your home. This indeed reflect the power of AI, but it just the surface of it. The true impact of AI will not only make our homes smarter and offices more efficient, but we are also completely transformed every value chip in every industry. However, to realize these amazing possibilities, we will need a structure built around the key components, and one that touches every part of all our lives. First of all, explosions in new technology always lead to new structures. This has happened many times before. In the early 20th century, thousands of companies provided a telephone service. City streets across the US looked like this, and now bundles of a microscopic fiber running from city to city bring the world closer together. Here's what a driving was like in the US, up until 1950s. Good luck finding your way. (audience laughs) And today, millions of vehicles are organized and routed daily, making the world more efficient. Structure is vital, from fiber cables and the interstate highways, to our cells bounded together to create humans. Thankfully the structure for intelligent transformation has emerged, and it is just as revolutionary. What does this new structure look like? We believe there are three key building blocks, data, computing power, and algorithms. Ever wondered what is it behind intelligent transformation? What is fueling this miracle of human possibility? Data. As the Internet becomes ubiquitous, not only PCs, mobile phones, have come online and been generating data. Today it is the cameras in this room, the climate controls in our offices, or the smart displays in our kitchens at home. The number of smart devices worldwide will reach over 20 billion in 2020, more than double the number in 2017. These devices and the sensors are connected and generating massive amount of data. By 2020, the amount of data generated will be 57 times more than all the grains of sand on Earth. This data will not only make devices smarter, but will also fuel the intelligence of our homes, offices, and entire industries. Then we need engines to turn the fuel into power, and the engine is actually the computing power. Last but not least the advanced algorithms combined with Big Data technology and industry know how will form vertical industrial intelligence and produce valuable insights for every value chain in every industry. When these three building blocks all come together, it will change the world. At Lenovo, we have each of these elements of intelligent transformations in a single place. We have built our business around the new structure of intelligent transformation, especially with mobile and the data center now firmly part of our business. I'm often asked why did you acquire these businesses? Why has a Lenovo gone into so many fields? People ask the same questions of the companies that become the leaders of the information technology revolution, or the third industrial transformation. They were the companies that saw the future and what the future required, and I believe Lenovo is the company today. From largest portfolio of devices in the world, leadership in the data center field, to the algorithm-powered intelligent vertical solutions, and not to mention the strong partnership Lenovo has built over decades. We are the only company that can unify all these essential assets and deliver end to end solutions. Let's look at each part. We now understand the important importance data plays as fuel in intelligent transformation. Hundreds of billions of devices and smart IoTs in the world are generating better and powering the intelligence. Who makes these devices in large volume and variety? Who puts these devices into people's home, offices, manufacturing lines, and in their hands? Lenovo definitely has the front row seats here. We are number one in PCs and tablets. We also produces smart phones, smart speakers, smart displays. AR/VR headsets, as well as commercial IoTs. All of these smart devices, or smart IoTs are linked to each other and to the cloud. In fact, we have more than 20 manufacturing facilities in China, US, Brazil, Japan, India, Mexico, Germany, and more, producing various devices around the clock. We actually make four devices every second, and 37 motherboards every minute. So, this factory located in my hometown, Hu-fi, China, is actually the largest laptop factory in the world, with more than three million square feet. So, this is as big as 42 soccer fields. Our scale and the larger portfolio of devices gives us access to massive amount of data, which very few companies can say. So, why is the ability to scale so critical? Let's look again at our example from before. The early days of telephone, dozens of service providers but only a few companies could survive consolidation and become the leader. The same was true for the third Industrial Revolution. Only a few companies could scale, only a few could survive to lead. Now the building blocks of the next revolution are locking into place. The (mumbles) will go to those who can operate at the scale. So, who could foresee the total integration of cloud, network, and the device, need to deliver intelligent transformation. Lenovo is that company. We are ready to scale. Next, our computing power. Computing power is provided in two ways. On one hand, the modern supercomputers are providing the brute force to quickly analyze the massive data like never before. On the other hand the cloud computing data centers with the server storage networking capabilities, and any computing IoT's, gateways, and miniservers are making computing available everywhere. Did you know, Lenovo is number one provider of super computers worldwide? 170 of the top 500 supercomputers, run on Lenovo. We hold 89 World Records in key workloads. We are number one in x86 server reliability for five years running, according to ITIC. a respected provider of industry research. We are also the fastest growing provider of hyperscale public cloud, hyper-converged and aggressively growing in edge computing. cur-ges target, we are expand on this point soon. And finally to run these individual nodes into our symphony, we must transform the data and utilize the computing power with advanced algorithms. Manufactured, industry maintenance, healthcare, education, retail, and more, so many industries are on the edge of intelligent transformation to improve efficiency and provide the better products and services. We are creating advanced algorithms and the big data tools combined with industry know-how to provide intelligent vertical solutions for several industries. In fact, we studied at Lenovo first. Our IT and research teams partnered with our global supply chain to develop an AI that improved our demand forecasting accuracy. Beyond managing our own supply chain we have offered our deep learning supply focused solution to other manufacturing companies to improve their efficiency. In the best case, we have improved the demand, focused the accuracy by 30 points to nearly 90 percent, for Baosteel, the largest of steel manufacturer in China, covering the world as well. Led by Lenovo research, we launched the industry-leading commercial ready AR headset, DaystAR, partnering with companies like the ones in this room. This technology is being used to revolutionize the way companies service utility, and even our jet engines. Using our workstations, servers, and award-winning imaging processing algorithms, we have partnered with hospitals to process complex CT scan data in minutes. So, this enable the doctors to more successfully detect the tumors, and it increases the success rate of cancer diagnosis all around the world. We are also piloting our smart IoT driven warehouse solution with one of the world's largest retail companies to greatly improve the efficiency. So, the opportunities are endless. This is where Lenovo will truly shine. When we combine the industry know-how of our customers with our end-to-end technology offerings, our intelligent vertical solutions like this are growing, which Kirk and Christian will share more. Now, what will drive this transformation even faster? The speed at which our networks operate, specifically 5G. You may know that Lenovo just launched the first-ever 5G smartphone, our Moto Z3, with the new 5G Moto model. We are partnering with multiple major network providers like Verizon, China Mobile. With the 5G model scheduled to ship early next year, we will be the first company to provide a 5G mobile experience to any users, customers. This is amazing innovation. You don't have to buy a new phone, just the 5G clip on. What can I say, except wow. (audience laughs) 5G is 10 times the fast faster than 4G. Its download speed will transform how people engage with the world, driverless car, new types of smart wearables, gaming, home security, industrial intelligence, all will be transformed. Finally, accelerating with partners, as ready as we are at Lenovo, we need partners to unlock our full potential, partners here to create with us the edge of the intelligent transformation. The opportunities of intelligent transformation are too profound, the scale is too vast. No company can drive it alone fully. We are eager to collaborate with all partners that can help bring our vision to life. We are dedicated to open partnerships, dedicated to cross-border collaboration, unify the standards, share the advantage, and market the synergies. We partner with the biggest names in the industry, Intel, Microsoft, AMD, Qualcomm, Google, Amazon, and Disney. We also find and partner with the smaller innovators as well. We're building the ultimate partner experience, open, shared, collaborative, diverse. So, everything is in place for intelligent transformation on a global scale. Smart devices are everywhere, the infrastructure is in place, networks are accelerating, and the industries demand to be more intelligent, and Lenovo is at the center of it all. We are helping to drive change with the hundreds of companies, companies just like yours, every day. We are your partner for intelligent transformation. Transformation never stops. This is what you will hear from Kirk, including details about Lenovo NetApp global partnership we just announced this morning. We've made the investments in every single aspect of the technology. We have the end-to-end resources to meet your end-to-end needs. As you attend the breakout session this afternoon, I hope you see for yourself how much Lenovo has transformed as a company this past year, and how we truly are delivering a future of intelligent transformation. Now, let me invite to the stage Kirk Skaugen, our president of Data Center growth to tell you about the exciting transformation happening in the global Data C enter market. Thank you. (audience applauding) (upbeat music) >> Well, good morning. >> Good morning. >> Good morning! >> Good morning! >> Excellent, well, I'm pleased to be here this morning to talk about how we're transforming the Data Center and taking you as our customers through your own intelligent transformation journey. Last year I stood up here at Transform 1.0, and we were proud to announce the largest Data Center portfolio in Lenovo's history, so I thought I'd start today and talk about the portfolio and the progress that we've made over the last year, and the strategies that we have going forward in phase 2.0 of Lenovo's transformation to be one of the largest data center companies in the world. We had an audacious vision that we talked about last year, and that is to be the most trusted data center provider in the world, empowering customers through the new IT, intelligent transformation. And now as the world's largest supercomputer provider, giving something back to humanity, is very important this week with the hurricanes now hitting North Carolina's coast, but we take this most trusted aspect very seriously, whether it's delivering the highest quality products on time to you as customers with the highest levels of security, or whether it's how we partner with our channel partners and our suppliers each and every day. You know we're in a unique world where we're going from hundreds of millions of PCs, and then over the next 25 years to hundred billions of connected devices, so each and every one of you is going through this intelligent transformation journey, and in many aspects were very early in that cycle. And we're going to talk today about our role as the largest supercomputer provider, and how we're solving humanity's greatest challenges. Last year we talked about two special milestones, the 25th anniversary of ThinkPad, but also the 25th anniversary of Lenovo with our IBM heritage in x86 computing. I joined the workforce in 1992 out of college, and the IBM first personal server was launching at the same time with an OS2 operating system and a free mouse when you bought the server as a marketing campaign. (audience laughing) But what I want to be very clear today, is that the innovation engine is alive and well at Lenovo, and it's really built on the culture that we're building as a company. All of these awards at the bottom are things that we earned over the last year at Lenovo. As a Fortune now 240 company, larger than companies like Nike, or AMEX, or Coca-Cola. The one I'm probably most proud of is Forbes first list of the top 2,000 globally regarded companies. This was something where 15,000 respondents in 60 countries voted based on ethics, trustworthiness, social conduct, company as an employer, and the overall company performance, and Lenovo was ranked number 27 of 2000 companies by our peer group, but we also now one of-- (audience applauding) But we also got a perfect score in the LGBTQ Equality Index, exemplifying the diversity internally. We're number 82 in the top working companies for mothers, top working companies for fathers, top 100 companies for sustainability. If you saw that factory, it's filled with solar panels on the top of that. And now again, one of the top global brands in the world. So, innovation is built on a customer foundation of trust. We also said last year that we'd be crossing an amazing milestone. So we did, over the last 12 months ship our 20 millionth x86 server. So, thank you very much to our customers for this milestone. (audience applauding) So, let me recap some of the transformation elements that have happened over the last year. Last year I talked about a lot of brand confusion, because we had the ThinkServer brand from the legacy Lenovo, the System x, from IBM, we had acquired a number of networking companies, like BLADE Network Technologies, et cetera, et cetera. Over the last year we've been ramping based on two brand structures, ThinkAgile for next generation IT, and all of our software-defined infrastructure products and ThinkSystem as the world's highest performance, highest reliable x86 server brand, but for servers, for storage, and for networking. We have transformed every single aspect of the customer experience. A year and a half ago, we had four different global channel programs around the world. Typically we're about twice the mix to our channel partners of any of our competitors, so this was really important to fix. We now have a single global Channel program, and have technically certified over 11,000 partners to be technical experts on our product line to deliver better solutions to our customer base. Gardner recently recognized Lenovo as the 26th ranked supply chain in the world. And, that's a pretty big honor, when you're up there with Amazon and Walmart and others, but in tech, we now are in the top five supply chains. You saw the factory network from YY, and today we'll be talking about product shipping in more than 160 countries, and I know there's people here that I've met already this morning, from India, from South Africa, from Brazil and China. We announced new Premier Support services, enabling you to go directly to local language support in nine languages in 49 countries in the world, going directly to a native speaker level three support engineer. And today we have more than 10,000 support specialists supporting our products in over 160 countries. We've delivered three times the number of engineered solutions to deliver a solutions orientation, whether it's on HANA, or SQL Server, or Oracle, et cetera, and we've completely reengaged our system integrator channel. Last year we had the CIO of DXE on stage, and here we're talking about more than 175 percent growth through our system integrator channel in the last year alone as we've brought that back and really built strong relationships there. So, thank you very much for amazing work here on the customer experience. (audience applauding) We also transformed our leadership. We thought it was extremely important with a focus on diversity, to have diverse talent from the legacy IBM, the legacy Lenovo, but also outside the industry. We made about 19 executive changes in the DCG group. This is the most senior leadership team within DCG, all which are newly on board, either from our outside competitors mainly over the last year. About 50 percent of our executives were now hired internally, 50 percent externally, and 31 percent of those new executives are diverse, representing the diversity of our global customer base and gender. So welcome, and most of them you're going to be able to meet over here in the breakout sessions later today. (audience applauding) But some things haven't changed, they're just keeping getting better within Lenovo. So, last year I got up and said we were committed with the new ThinkSystem brand to be a world performance leader. You're going to see that we're sponsoring Ducati for MotoGP. You saw the Ferrari out there with Formula One. That's not a surprise. We want the Lenovo ThinkSystem and ThinkAgile brands to be synonymous with world record performance. So in the last year we've gone from 39 to 89 world records, and partners like Intel would tell you, we now have four times the number of world record workloads on Lenovo hardware than any other server company on the planet today, with more than 89 world records across HPC, Java, database, transaction processing, et cetera. And we're proud to have just brought on Doug Fisher from Intel Corporation who had about 10-17,000 people on any given year working for him in workload optimizations across all of our software. It's just another testament to the leadership team we're bringing in to keep focusing on world-class performance software and solutions. We also per ITIC, are the number one now in x86 server reliability five years running. So, this is a survey where CIOs are in a blind survey asked to submit their reliability of their uptime on their x86 server equipment over the last 365 days. And you can see from 2016 to 2017 the downtime, there was over four hours as noted by the 750 CXOs in more than 20 countries is about one percent for the Lenovo products, and is getting worse generation from generation as we went from Broadwell to Pearlie. So we're taking our reliability, which was really paramount in the IBM System X heritage, and ensuring that we don't just recognize high performance but we recognize the highest level of reliability for mission-critical workloads. And what that translates into is that we at once again have been ranked number one in customer satisfaction from you our customers in 19 of 22 attributes, in North America in 18 of 22. This is a survey by TVR across hundreds of customers of us and our top competitors. This is the ninth consecutive study that we've been ranked number one in customer satisfaction, so we're taking this extremely seriously, and in fact YY now has increased the compensation of every single Lenovo employee. Up to 40 percent of their compensation bonus this year is going to be based on customer metrics like quality, order to ship, and things of this nature. So, we're really putting every employee focused on customer centricity this year. So, the summary on Transform 1.0 is that every aspect of what you knew about Lenovo's data center group has transformed, from the culture to the branding to dedicated sales and marketing, supply chain and quality groups, to a worldwide channel program and certifications, to new system integrator relationships, and to the new leadership team. So, rather than me just talk about it, I thought I'd share a quick video about what we've done over the last year, if you could run the video please. Turn around for a second. (epic music) (audience applauds) Okay. So, thank you to all our customers that allowed us to publicly display their logos in that video. So, what that means for you as investors, and for the investor community out there is, that our customers have responded, that this year Gardner just published that we are the fastest growing server company in the top 10, with 39 percent growth quarter-on-quarter, and 49 percent growth year-on-year. If you look at the progress we've made since the transformation the last three quarters publicly, we've grown 17 percent, then 44 percent, then 68 percent year on year in revenue, and I can tell you this quarter I'm as confident as ever in the financials around the DCG group, and it hasn't been in one area. You're going to see breakout sessions from hyperscale, software-defined, and flash, which are all growing more than a 100 percent year-on-year, supercomputing which we'll talk about shortly, now number one, and then ultimately from profitability, delivering five consecutive quarters of pre-tax profit increase, so I think, thank you very much to the customer base who's been working with us through this transformation journey. So, you're here to really hear what's next on 2.0, and that's what I'm excited to talk about today. Last year I came up with an audacious goal that we would become the largest supercomputer company on the planet by 2020, and this graph represents since the acquisition of the IBM System x business how far we were behind being the number one supercomputer. When we started we were 182 positions behind, even with the acquisition for example of SGI from HP, we've now accomplished our goal actually two years ahead of time. We're now the largest supercomputer company in the world. About one in every four supercomputers, 117 on the list, are now Lenovo computers, and you saw in the video where the universities are said, but I think what I'm most proud of is when your customers rank you as the best. So the awards at the bottom here, are actually Readers Choice from the last International Supercomputing Show where the scientific researchers on these computers ranked their vendors, and we were actually rated the number one server technology in supercomputing with our ThinkSystem SD530, and the number one storage technology with our ThinkSystem DSS-G, but more importantly what we're doing with the technology. You're going to see we won best in life sciences, best in data analytics, and best in collaboration as well, so you're going to see all of that in our breakout sessions. As you saw in the video now, 17 of the top 25 research institutions in the world are now running Lenovo supercomputers. And again coming from Raleigh and watching that hurricane come across the Atlantic, there are eight supercomputers crunching all of those models you see from Germany to Malaysia to Canada, and we're happy to have a SciNet from University of Toronto here with us in our breakout session to talk about what they're doing on climate modeling as well. But we're not stopping there. We just announced our new Neptune warm water cooling technology, which won the International Supercomputing Vendor Showdown, the first time we've won that best of show in 25 years, and we've now installed this. We're building out LRZ in Germany, the first ever warm water cooling in Peking University, at the India Space Propulsion Laboratory, at the Malaysian Weather and Meteorological Society, at Uninett, at the largest supercomputer in Norway, T-Systems, University of Birmingham. This is truly amazing technology where we're actually using water to cool the machine to deliver a significantly more energy-efficient computer. Super important, when we're looking at global warming and some of the electric bills can be millions of dollars just for one computer, and could actually power a small city just with the technology from the computer. We've built AI centers now in Morrisville, Stuttgart, Taipei, and Beijing, where customers can bring their AI workloads in with experts from Intel, from Nvidia, from our FPGA partners, to work on their workloads, and how they can best implement artificial intelligence. And we also this year launched LICO which is Lenovo Intelligent Compute Orchestrator software, and it's a software solution that simplifies the management and use of distributed clusters in both HPC and AI model development. So, what it enables you to do is take a single cluster, and run both HPC and AI workloads on it simultaneously, delivering better TCO for your environment, so check out LICO as well. A lot of the customers here and Wall Street are very excited and using it already. And we talked about solving humanity's greatest challenges. In the breakout session, you're going to have a virtual reality experience where you're going to be able to walk through what as was just ranked the world's most beautiful data center, the Barcelona Supercomputer. So, you can actually walk through one of the largest supercomputers in the world from Barcelona. You can see the work we're doing with NC State where we're going to have to grow the food supply of the world by 50 percent, and there's not enough fresh water in the world in the right places to actually make all those crops grow between now and 2055, so you're going to see the progression of how they're mapping the entire globe and the water around the world, how to build out the crop population over time using AI. You're going to see our work with Vestas is this largest supercomputer provider in the wind turbine areas, how they're working on wind energy, and then with University College London, how they're working on some of the toughest particle physics calculations in the world. So again, lots of opportunity here. Take advantage of it in the breakout sessions. Okay, let me transition to hyperscale. So in hyperscale now, we have completely transformed our business model. We are now powering six of the top 10 hyperscalers in the world, which is a significant difference from where we were two years ago. And the reason we're doing that, is we've coined a term called ODM+. We believe that hyperscalers want more procurement power than an ODM, and Lenovo is doing about $18 billion of procurement a year. They want a broader global supply chain that they can get from a local system integrator. We're more than 160 countries around the world, but they want the same world-class quality and reliability like they get from an MNC. So, what we're doing now is instead of just taking off the shelf motherboards from somewhere, we're starting with a blank sheet of paper, we're working with the customer base on customized SKUs and you can see we already are developing 33 custom solutions for the largest hyperscalers in the world. And then we're not just running notebooks through this factory where YY said, we're running 37 notebook boards a minute, we're now putting in tens and tens and tens of thousands of server board capacity per month into this same factory, so absolutely we can compete with the most aggressive ODM's in the world, but it's not just putting these things in in the motherboard side, we're also building out these systems all around the world, India, Brazil, Hungary, Mexico, China. This is an example of a new hyperscale customer we've had this last year, 34,000 servers we delivered in the first six months. The next 34,000 servers we delivered in 68 days. The next 34,000 servers we delivered in 35 days, with more than 99 percent on-time delivery to 35 data centers in 14 countries as diverse as South Africa, India, China, Brazil, et cetera. And I'm really ashamed to say it was 99.3, because we did have a forklift driver who rammed their forklift right through the middle of the one of the server racks. (audience laughing) At JFK Airport that we had to respond to, but I think this gives you a perspective of what it is to be a top five global supply chain and technology. So last year, I said we would invest significantly in IP, in joint ventures, and M and A to compete in software defined, in networking, and in storage, so I wanted to give you an update on that as well. Our newest software-defined partnership is with Cloudistics, enabling a fully composable cloud infrastructure. It's an exclusive agreement, you can see them here. I think Nag, our founder, is going to be here today, with a significant Lenovo investment in the company. So, this new ThinkAgile CP series delivers the simplicity of the public cloud, on-premise with exceptional support and a marketplace of essential enterprise applications all with a single click deployment. So simply put, we're delivering a private cloud with a premium experience. It's simple in that you need no specialists to deploy it. An IT generalist can set it up and manage it. It's agile in that you can provision dozens of workloads in minutes, and it's transformative in that you get all of the goodness of public cloud on-prem in a private cloud to unlock opportunity for use. So, we're extremely excited about the ThinkAgile CP series that's now shipping into the marketplace. Beyond that we're aggressively ramping, and we're either doubling, tripling, or quadrupling our market share as customers move from traditional server technology to software-defined technology. With Nutanix we've been public, growing about more than 150 percent year-on-year, with Nutanix as their fastest growing Nutanix partner, but today I want to set another audacious goal. I believe we cannot just be Nutanix's fastest growing partner but we can become their largest partner within two years. On Microsoft, we are already four times our market share on Azure stack of our traditional business. We were the first to launch our ThinkAgile on Broadwell and on Skylake with the Azure Stack Infrastructure. And on VMware we're about twice our market segment share. We were the first to deliver an Intel-optimized Optane-certified VSAN node. And with Optane technology, we're delivering 50 percent more VM density than any competitive SSD system in the marketplace, about 10 times lower latency, four times the performance of any SSD system out there, and Lenovo's first to market on that. And at VMworld you saw CEO Pat Gelsinger of VMware talked about project dimension, which is Edge as a service, and we're the only OEM beyond the Dell family that is participating today in project dimension. Beyond that you're going to see a number of other partnerships we have. I'm excited that we have the city of Bogota Columbia here, an eight million person city, where we announced a 3,000 camera video surveillance solution last month. With pivot three you're going to see city of Bogota in our breakout sessions. You're going to see a new partnership with Veeam around backup that's launching today. You're going to see partnerships with scale computing in IoT and hyper-converged infrastructure working on some of the largest retailers in the world. So again, everything out in the breakout session. Transitioning to storage and data management, it's been a great year for Lenovo, more than a 100 percent growth year-on-year, 2X market growth in flash arrays. IDC just reported 30 percent growth in storage, number one in price performance in the world and the best HPC storage product in the top 500 with our ThinkSystem DSS G, so strong coverage, but I'm excited today to announce for Transform 2.0 that Lenovo is launching the largest data management and storage portfolio in our 25-year data center history. (audience applauding) So a year ago, the largest server portfolio, becoming the largest fastest growing server OEM, today the largest storage portfolio, but as you saw this morning we're not doing it alone. Today Lenovo and NetApp, two global powerhouses are joining forces to deliver a multi-billion dollar global alliance in data management and storage to help customers through their intelligent transformation. As the fastest growing worldwide server leader and one of the fastest growing flash array and data management companies in the world, we're going to deliver more choice to customers than ever before, global scale that's never been seen, supply chain efficiencies, and rapidly accelerating innovation and solutions. So, let me unwrap this a little bit for you and talk about what we're announcing today. First, it's the largest portfolio in our history. You're going to see not just storage solutions launching today but a set of solution recipes from NetApp that are going to make Lenovo server and NetApp or Lenovo storage work better together. The announcement enables Lenovo to go from covering 15 percent of the global storage market to more than 90 percent of the global storage market and distribute these products in more than 160 countries around the world. So we're launching today, 10 new storage platforms, the ThinkSystem DE and ThinkSystem DM platforms. They're going to be centrally managed, so the same XClarity management that you've been using for server, you can now use across all of your storage platforms as well, and it'll be supported by the same 10,000 plus service personnel that are giving outstanding customer support to you today on the server side. And we didn't come up with this in the last month or the last quarter. We're announcing availability in ordering today and shipments tomorrow of the first products in this portfolio, so we're excited today that it's not just a future announcement but something you as customers can take advantage of immediately. (audience applauding) The second part of the announcement is we are announcing a joint venture in China. Not only will this be a multi-billion dollar global partnership, but Lenovo will be a 51 percent owner, NetApp a 49 percent owner of a new joint venture in China with the goal of becoming in the top three storage companies in the largest data and storage market in the world. We will deliver our R and D in China for China, pooling our IP and resources together, and delivering a single route to market through a complementary channel, not just in China but worldwide. And in the future I just want to tell everyone this is phase one. There is so much exciting stuff. We're going to be on the stage over the next year talking to you about around integrated solutions, next-generation technologies, and further synergies and collaborations. So, rather than just have me talk about it, I'd like to welcome to the stage our new partner NetApp and Brad Anderson who's the senior vice president and general manager of NetApp Cloud Infrastructure. (upbeat music) (audience applauding) >> Thank You Kirk. >> So Brad, we've known each other a long time. It's an exciting day. I'm going to give you the stage and allow you to say NetApp's perspective on this announcement. >> Very good, thank you very much, Kirk. Kirk and I go back to I think 1994, so hey good morning and welcome. My name is Brad Anderson. I manage the Cloud Infrastructure Group at NetApp, and I am honored and privileged to be here at Lenovo Transform, particularly today on today's announcement. Now, you've heard a lot about digital transformation about how companies have to transform their IT to compete in today's global environment. And today's announcement with the partnership between NetApp and Lenovo is what that's all about. This is the joining of two global leaders bringing innovative technology in a simplified solution to help customers modernize their IT and accelerate their global digital transformations. Drawing on the strengths of both companies, Lenovo's high performance compute world-class supply chain, and NetApp's hybrid cloud data management, hybrid flash and all flash storage solutions and products. And both companies providing our customers with the global scale for them to be able to meet their transformation goals. At NetApp, we're very excited. This is a quote from George Kurian our CEO. George spent all day yesterday with YY and Kirk, and would have been here today if it hadn't been also our shareholders meeting in California, but I want to just convey how excited we are for all across NetApp with this partnership. This is a partnership between two companies with tremendous market momentum. Kirk took you through all the amazing results that Lenovo has accomplished, number one in supercomputing, number one in performance, number one in x86 reliability, number one in x86 customers sat, number five in supply chain, really impressive and congratulations. Like Lenovo, NetApp is also on a transformation journey, from a storage company to the data authority in hybrid cloud, and we've seen some pretty impressive momentum as well. Just last week we became number one in all flash arrays worldwide, catching EMC and Dell, and we plan to keep on going by them, as we help customers modernize their their data centers with cloud connected flash. We have strategic partnerships with the largest hyperscalers to provide cloud native data services around the globe and we are having success helping our customers build their own private clouds with just, with a new disruptive hyper-converged technology that allows them to operate just like hyperscalers. These three initiatives has fueled NetApp's transformation, and has enabled our customers to change the world with data. And oh by the way, it has also fueled us to have meet or have beaten Wall Street's expectations for nine quarters in a row. These are two companies with tremendous market momentum. We are also building this partnership for long term success. We think about this as phase one and there are two important components to phase one. Kirk took you through them but let me just review them. Part one, the establishment of a multi-year commitment and a collaboration agreement to offer Lenovo branded flash products globally, and as Kurt said in 160 countries. Part two, the formation of a joint venture in PRC, People's Republic of China, that will provide long term commitment, joint product development, and increase go-to-market investment to meet the unique needs to China. Both companies will put in storage technologies and storage expertise to form an independent JV that establishes a data management company in China for China. And while we can dream about what phase two looks like, our entire focus is on making phase one incredibly successful and I'm pleased to repeat what Kirk, is that the first products are orderable and shippable this week in 160 different countries, and you will see our two companies focusing on the here and now. On our joint go to market strategy, you'll see us working together to drive strategic alignment, focused execution, strong governance, and realistic expectations and milestones. And it starts with the success of our customers and our channel partners is job one. Enabling customers to modernize their legacy IT with complete data center solutions, ensuring that our customers get the best from both companies, new offerings the fuel business success, efficiencies to reinvest in game-changing initiatives, and new solutions for new mission-critical applications like data analytics, IoT, artificial intelligence, and machine learning. Channel partners are also top of mind for both our two companies. We are committed to the success of our existing and our future channel partners. For NetApp channel partners, it is new pathways to new segments and to new customers. For Lenovo's channel partners, it is the competitive weapons that now allows you to compete and more importantly win against Dell, EMC, and HP. And the good news for both companies is that our channel partner ecosystem is highly complementary with minimal overlap. Today is the first day of a very exciting partnership, of a partnership that will better serve our customers today and will provide new opportunities to both our companies and to our partners, new products to our customers globally and in China. I am personally very excited. I will be on the board of the JV. And so, I look forward to working with you, partnering with you and serving you as we go forward, and with that, I'd like to invite Kirk back up. (audience applauding) >> Thank you. >> Thank you. >> Well, thank you, Brad. I think it's an exciting overview, and these products will be manufactured in China, in Mexico, in Hungary, and around the world, enabling this amazing supply chain we talked about to deliver in over 160 countries. So thank you Brad, thank you George, for the amazing partnership. So again, that's not all. In Transform 2.0, last year, we talked about the joint ventures that were coming. I want to give you a sneak peek at what you should expect at future Lenovo events around the world. We have this Transform in Beijing in a couple weeks. We'll then be repeating this in 20 different locations roughly around the world over the next year, and I'm excited probably more than ever about what else is coming. Let's talk about Telco 5G and network function virtualization. Today, Motorola phones are certified on 46 global networks. We launched the world's first 5G upgradable phone here in the United States with Verizon. Lenovo DCG sells to 58 telecommunication providers around the world. At Mobile World Congress in Barcelona and Shanghai, you saw China Telecom and China Mobile in the Lenovo booth, China Telecom showing a video broadband remote access server, a VBRAS, with video streaming demonstrations with 2x less jitter than they had seen before. You saw China Mobile with a virtual remote access network, a VRAN, with greater than 10 times the throughput and 10x lower latency running on Lenovo. And this year, we'll be launching a new NFV company, a software company in China for China to drive the entire NFV stack, delivering not just hardware solutions, but software solutions, and we've recently hired a new CEO. You're going to hear more about that over the next several quarters. Very exciting as we try to drive new economics into the networks to deliver these 20 billion devices. We're going to need new economics that I think Lenovo can uniquely deliver. The second on IoT and edge, we've integrated on the device side into our intelligent devices group. With everything that's going to consume electricity computes and communicates, Lenovo is in a unique position on the device side to take advantage of the communications from Motorola and being one of the largest device companies in the world. But this year, we're also going to roll out a comprehensive set of edge gateways and ruggedized industrial servers and edge servers and ISP appliances for the edge and for IoT. So look for that as well. And then lastly, as a service, you're going to see Lenovo delivering hardware as a service, device as a service, infrastructure as a service, software as a service, and hardware as a service, not just as a glorified leasing contract, but with IP, we've developed true flexible metering capability that enables you to scale up and scale down freely and paying strictly based on usage, and we'll be having those announcements within this fiscal year. So Transform 2.0, lots to talk about, NetApp the big news of the day, but a lot more to come over the next year from the Data Center group. So in summary, I'm excited that we have a lot of customers that are going to be on stage with us that you saw in the video. Lots of testimonials so that you can talk to colleagues of yourself. Alamos Gold from Canada, a Canadian gold producer, Caligo for data optimization and privacy, SciNet, the largest supercomputer we've ever put into North America, and the largest in Canada at the University of Toronto will be here talking about climate change. City of Bogota again with our hyper-converged solutions around smart city putting in 3,000 cameras for criminal detection, license plate detection, et cetera, and then more from a channel mid market perspective, Jerry's Foods, which is from my home state of Wisconsin, and Minnesota which has about 57 stores in the specialty foods market, and how they're leveraging our IoT solutions as well. So again, about five times the number of demos that we had last year. So in summary, first and foremost to the customers, thank you for your business. It's been a great journey and I think we're on a tremendous role. You saw from last year, we're trying to build credibility with you. After the largest server portfolio, we're now the fastest-growing server OEM per Gardner, number one in performance, number one in reliability, number one in customer satisfaction, number one in supercomputing. Today, the largest storage portfolio in our history, with the goal of becoming the fastest growing storage company in the world, top three in China, multibillion-dollar collaboration with NetApp. And the transformation is going to continue with new edge gateways, edge servers, NFV solutions, telecommunications infrastructure, and hardware as a service with dynamic metering. So thank you for your time. I've looked forward to meeting many of you over the next day. We appreciate your business, and with that, I'd like to bring up Rod Lappen to introduce our next speaker. Rod? (audience applauding) >> Thanks, boss, well done. Alright ladies and gentlemen. No real secret there. I think we've heard why I might talk about the fourth Industrial Revolution in data and exactly what's going on with that. You've heard Kirk with some amazing announcements, obviously now with our NetApp partnership, talk about 5G, NFV, cloud, artificial intelligence, I think we've hit just about all the key hot topics. It's with great pleasure that I now bring up on stage Mr. Christian Teismann, our senior vice president and general manager of commercial business for both our PCs and our IoT business, so Christian Teismann. (techno music) Here, take that. >> Thank you. I think I'll need that. >> Okay, Christian, so obviously just before we get down, you and I last year, we had a bit of a chat about being in New York. >> Exports. >> You were an expat in New York for a long time. >> That's true. >> And now, you've moved from New York. You're in Munich? >> Yep. >> How does that feel? >> Well Munich is a wonderful city, and it's a great place to live and raise kids, but you know there's no place in the world like New York. >> Right. >> And I miss it a lot, quite frankly. >> So what exactly do you miss in New York? >> Well there's a lot of things in New York that are unique, but I know you spent some time in Japan, but I still believe the best sushi in the world is still in New York City. (all laughing) >> I will beg to differ. I will beg to differ. I think Mr. Guchi-san from Softbank is here somewhere. He will get up an argue very quickly that Japan definitely has better sushi than New York. But obviously you know, it's a very very special place, and I have had sushi here, it's been fantastic. What about Munich? Anything else that you like in Munich? >> Well I mean in Munich, we have pork knuckles. >> Pork knuckles. (Christian laughing) Very similar sushi. >> What is also very fantastic, but we have the real, the real Oktoberfest in Munich, and it starts next week, mid-September, and I think it's unique in the world. So it's very special as well. >> Oktoberfest. >> Yes. >> Unfortunately, I'm not going this year, 'cause you didn't invite me, but-- (audience chuckling) How about, I think you've got a bit of a secret in relation to Oktoberfest, probably not in Munich, however. >> It's a secret, yes, but-- >> Are you going to share? >> Well I mean-- >> See how I'm putting you on the spot? >> In the 10 years, while living here in New York, I was a regular visitor of the Oktoberfest at the Lower East Side in Avenue C at Zum Schneider, where I actually met my wife, and she's German. >> Very good. So, how about a big round of applause? (audience applauding) Not so much for Christian, but more I think, obviously for his wife, who obviously had been drinking and consequently ended up with you. (all laughing) See you later, mate. >> That's the beauty about Oktoberfest, but yes. So first of all, good morning to everybody, and great to be back here in New York for a second Transform event. New York clearly is the melting pot of the world in terms of culture, nations, but also business professionals from all kind of different industries, and having this event here in New York City I believe is manifesting what we are trying to do here at Lenovo, is transform every aspect of our business and helping our customers on the journey of intelligent transformation. Last year, in our transformation on the device business, I talked about how the PC is transforming to personalized computing, and we've made a lot of progress in that journey over the last 12 months. One major change that we have made is we combined all our device business under one roof. So basically PCs, smart devices, and smart phones are now under the roof and under the intelligent device group. But from my perspective makes a lot of sense, because at the end of the day, all devices connect in the modern world into the cloud and are operating in a seamless way. But we are also moving from a device business what is mainly a hardware focus historically, more and more also into a solutions business, and I will give you during my speech a little bit of a sense of what we are trying to do, as we are trying to bring all these components closer together, and specifically also with our strengths on the data center side really build end-to-end customer solution. Ultimately, what we want to do is make our business, our customer's businesses faster, safer, and ultimately smarter as well. So I want to look a little bit back, because I really believe it's important to understand what's going on today on the device side. Many of us have still grown up with phones with terminals, ultimately getting their first desktop, their first laptop, their first mobile phone, and ultimately smartphone. Emails and internet improved our speed, how we could operate together, but still we were defined by linear technology advances. Today, the world has changed completely. Technology itself is not a limiting factor anymore. It is how we use technology going forward. The Internet is pervasive, and we are not yet there that we are always connected, but we are nearly always connected, and we are moving to the stage, that everything is getting connected all the time. Sharing experiences is the most driving force in our behavior. In our private life, sharing pictures, videos constantly, real-time around the world, with our friends and with our family, and you see the same behavior actually happening in the business life as well. Collaboration is the number-one topic if it comes down to workplace, and video and instant messaging, things that are coming from the consumer side are dominating the way we are operating in the commercial business as well. Most important beside technology, that a new generation of workforce has completely changed the way we are working. As the famous workforce the first generation of Millennials that have now fully entered in the global workforce, and the next generation, it's called Generation Z, is already starting to enter the global workforce. By 2025, 75 percent of the world's workforce will be composed out of two of these generations. Why is this so important? These two generations have been growing up using state-of-the-art IT technology during their private life, during their education, school and study, and are taking these learnings and taking these behaviors in the commercial workspace. And this is the number one force of change that we are seeing in the moment. Diverse workforces are driving this change in the IT spectrum, and for years in many of our customers' focus was their customer focus. Customer experience also in Lenovo is the most important thing, but we've realized that our own human capital is equally valuable in our customer relationships, and employee experience is becoming a very important thing for many of our customers, and equally for Lenovo as well. As you have heard YY, as we heard from YY, Lenovo is focused on intelligent transformation. What that means for us in the intelligent device business is ultimately starting with putting intelligence in all of our devices, smartify every single one of our devices, adding value to our customers, traditionally IT departments, but also focusing on their end users and building products that make their end users more productive. And as a world leader in commercial devices with more than 33 percent market share, we can solve problems been even better than any other company in the world. So, let's talk about transformation of productivity first. We are in a device-led world. Everything we do is connected. There's more interaction with devices than ever, but also with spaces who are increasingly becoming smart and intelligent. YY said it, by 2020 we have more than 20 billion connected devices in the world, and it will grow exponentially from there on. And users have unique personal choices for technology, and that's very important to recognize, and we call this concept a digital wardrobe. And it means that every single end-user in the commercial business is composing his personal wardrobe on an ongoing basis and is reconfiguring it based on the work he's doing and based where he's going and based what task he is doing. I would ask all of you to put out all the devices you're carrying in your pockets and in your bags. You will see a lot of you are using phones, tablets, laptops, but also cameras and even smartwatches. They're all different, but they have one underlying technology that is bringing it all together. Recognizing digital wardrobe dynamics is a core factor for us to put all the devices under one roof in IDG, one business group that is dedicated to end-user solutions across mobile, PC, but also software services and imaging, to emerging technologies like AR, VR, IoT, and ultimately a AI as well. A couple of years back there was a big debate around bring-your-own-device, what was called consumerization. Today consumerization does not exist anymore, because consumerization has happened into every single device we build in our commercial business. End users and commercial customers today do expect superior display performance, superior audio, microphone, voice, and touch quality, and have it all connected and working seamlessly together in an ease of use space. We are already deep in the journey of personalized computing today. But the center point of it has been for the last 25 years, the mobile PC, that we have perfected over the last 25 years, and has been the undisputed leader in mobility computing. We believe in the commercial business, the ThinkPad is still the core device of a digital wardrobe, and we continue to drive the success of the ThinkPad in the marketplace. We've sold more than 140 million over the last 26 years, and even last year we exceeded nearly 11 million units. That is about 21 ThinkPads per minute, or one Thinkpad every three seconds that we are shipping out in the market. It's the number one commercial PC in the world. It has gotten countless awards but we felt last year after Transform we need to build a step further, in really tailoring the ThinkPad towards the need of the future. So, we announced a new line of X1 Carbon and Yoga at CES the Consumer Electronics Show. And the reason is not we want to sell to consumer, but that we do recognize that a lot of CIOs and IT decision makers need to understand what consumers are really doing in terms of technology to make them successful. So, let's take a look at the video. (suspenseful music) >> When you're the number one business laptop of all time, your only competition is yourself. (wall shattering) And, that's different. Different, like resisting heat, ice, dust, and spills. Different, like sharper, brighter OLA display. The trackpoint that reinvented controls, and a carbon fiber roll cage to protect what's inside, built by an engineering and design team, doing the impossible for the last 25 years. This is the number one business laptop of all time, but it's not a laptop. It's a ThinkPad. (audience applauding) >> Thank you very much. And we are very proud that Lenovo ThinkPad has been selected as the best laptop in the world in the second year in a row. I think it's a wonderful tribute to what our engineers have been done on this one. And users do want awesome displays. They want the best possible audio, voice, and touch control, but some users they want more. What they want is super power, and I'm really proud to announce our newest member of the X1 family, and that's the X1 extreme. It's exceptionally featured. It has six core I9 intel chipset, the highest performance you get in the commercial space. It has Nvidia XTX graphic, it is a 4K UHD display with HDR with Dolby vision and Dolby Atmos Audio, two terabyte in SSD, so it is really the absolute Ferrari in terms of building high performance commercial computer. Of course it has touch and voice, but it is one thing. It has so much performance that it serves also a purpose that is not typical for commercial, and I know there's a lot of secret gamers also here in this room. So you see, by really bringing technology together in the commercial space, you're creating productivity solutions of one of a kind. But there's another category of products from a productivity perspective that is incredibly important in our commercial business, and that is the workstation business . Clearly workstations are very specifically designed computers for very advanced high-performance workloads, serving designers, architects, researchers, developers, or data analysts. And power and performance is not just about the performance itself. It has to be tailored towards the specific use case, and traditionally these products have a similar size, like a server. They are running on Intel Xeon technology, and they are equally complex to manufacture. We have now created a new category as the ultra mobile workstation, and I'm very proud that we can announce here the lightest mobile workstation in the industry. It is so powerful that it really can run AI and big data analysis. And with this performance you can go really close where you need this power, to the sensors, into the cars, or into the manufacturing places where you not only wannna read the sensors but get real-time analytics out of these sensors. To build a machine like this one you need customers who are really challenging you to the limit. and we're very happy that we had a customer who went on this journey with us, and ultimately jointly with us created this product. So, let's take a look at the video. (suspenseful music) >> My world involves pathfinding both the hardware needs to the various work sites throughout the company, and then finding an appropriate model of desktop, laptop, or workstation to match those needs. My first impressions when I first seen the ThinkPad P1 was I didn't actually believe that we could get everything that I was asked for inside something as small and light in comparison to other mobile workstations. That was one of the I can't believe this is real sort of moments for me. (engine roars) >> Well, it's better than general when you're going around in the wind tunnel, which isn't alway easy, and going on a track is not necessarily the best bet, so having a lightweight very powerful laptop is extremely useful. It can take a Xeon processor, which can support ECC from when we try to load a full car, and when we're analyzing live simulation results. through and RCFT post processor or example. It needs a pretty powerful machine. >> It's come a long way to be able to deliver this. I hate to use the word game changer, but it is that for us. >> Aston Martin has got a lot of different projects going. There's some pretty exciting projects and a pretty versatile range coming out. Having Lenovo as a partner is certainly going to ensure that future. (engine roars) (audience applauds) >> So, don't you think the Aston Martin design and the ThinkPad design fit very well together? (audience laughs) So if Q, would get a new laptop, I think you would get a ThinkPad X P1. So, I want to switch gears a little bit, and go into something in terms of productivity that is not necessarily on top of the mind or every end user but I believe it's on top of the mind of every C-level executive and of every CEO. Security is the number one threat in terms of potential risk in your business and the cost of cybersecurity is estimated by 2020 around six trillion dollars. That's more than the GDP of Japan and we've seen a significant amount of data breach incidents already this years. Now, they're threatening to take companies out of business and that are threatening companies to lose a huge amount of sensitive customer data or internal data. At Lenovo, we are taking security very, very seriously, and we run a very deep analysis, around our own security capabilities in the products that we are building. And we are announcing today a new brand under the Think umbrella that is called ThinkShield. Our goal is to build the world's most secure PC, and ultimately the most secure devices in the industry. And when we looked at this end-to-end, there is no silver bullet around security. You have to go through every aspect where security breaches can potentially happen. That is why we have changed the whole organization, how we look at security in our device business, and really have it grouped under one complete ecosystem of solutions, Security is always something where you constantly are getting challenged with the next potential breach the next potential technology flaw. As we keep innovating and as we keep integrating, a lot of our partners' software and hardware components into our products. So for us, it's really very important that we partner with companies like Intel, Microsoft, Coronet, Absolute, and many others to really as an example to drive full encryption on all the data seamlessly, to have multi-factor authentication to protect your users' identity, to protect you in unsecured Wi-Fi locations, or even simple things like innovation on the device itself, to and an example protect the camera, against usage with a little thing like a thinkShutter that you can shut off the camera. SO what I want to show you here, is this is the full portfolio of ThinkShield that we are announcing today. This is clearly not something I can even read to you today, but I believe it shows you the breadth of security management that we are announcing today. There are four key pillars in managing security end-to-end. The first one is your data, and this has a lot of aspects around the hardware and the software itself. The second is identity. The third is the security around online, and ultimately the device itself. So, there is a breakout on security and ThinkShield today, available in the afternoon, and encourage you to really take a deeper look at this one. The first pillar around productivity was the device, and around the device. The second major pillar that we are seeing in terms of intelligent transformation is the workspace itself. Employees of a new generation have a very different habit how they work. They split their time between travel, working remotely but if they do come in the office, they expect a very different office environment than what they've seen in the past in cubicles or small offices. They come into the office to collaborate, and they want to create ideas, and they really work in cross-functional teams, and they want to do it instantly. And what we've seen is there is a huge amount of investment that companies are doing today in reconfiguring real estate reconfiguring offices. And most of these kind of things are moving to a digital platform. And what we are doing, is we want to build an entire set of solutions that are just focused on making the workspace more productive for remote workforce, and to create technology that allow people to work anywhere and connect instantly. And the core of this is that we need to be, the productivity of the employee as high as possible, and make it for him as easy as possible to use these kind of technologies. Last year in Transform, I announced that we will enter the smart office space. By the end of last year, we brought the first product into the market. It's called the Hub 500. It's already deployed in thousands of our customers, and it's uniquely focused on Microsoft Skype for Business, and making meeting instantly happen. And the product is very successful in the market. What we are announcing today is the next generation of this product, what is the Hub 700, what has a fantastic audio quality. It has far few microphones, and it is usable in small office environment, as well as in major conference rooms, but the most important part of this new announcement is that we are also announcing a software platform, and this software platform allows you to run multiple video conferencing software solutions on the same platform. Many of you may have standardized for one software solution or for another one, but as you are moving in a world of collaborating instantly with partners, customers, suppliers, you always will face multiple software standards in your company, and Lenovo is uniquely positioned but providing a middleware platform for the device to really enable multiple of these UX interfaces. And there's more to come and we will add additional UX interfaces on an ongoing base, based on our customer requirements. But this software does not only help to create a better experience and a higher productivity in the conference room or the huddle room itself. It really will allow you ultimately to manage all your conference rooms in the company in one instance. And you can run AI technologies around how to increase productivity utilization of your entire conference room ecosystem in your company. You will see a lot more devices coming from the node in this space, around intelligent screens, cameras, and so on, and so on. The idea is really that Lenovo will become a core provider in the whole movement into the smart office space. But it's great if you have hardware and software that is really supporting the approach of modern IT, but one component that Kirk also mentioned is absolutely critical, that we are providing this to you in an as a service approach. Get it what you want, when you need it, and pay it in the amount that you're really using it. And within UIT there is also I think a new philosophy around IT management, where you're much more focused on the value that you are consuming instead of investing into technology. We are launched as a service two years back and we already have a significant number of customers running PC as a service, but we believe as a service will stretch far more than just the PC device. It will go into categories like smart office. It might go even into categories like phone, and it will definitely go also in categories like storage and server in terms of capacity management. I want to highlight three offerings that we are also displaying today that are sort of building blocks in terms of how we really run as a service. The first one is that we collaborated intensively over the last year with Microsoft to be the launch pilot for their Autopilot offering, basically deploying images easily in the same approach like you would deploy a new phone on the network. The purpose really is to make new imaging and enabling new PC as seamless as it's used to be in the phone industry, and we have a complete set of offerings, and already a significant number customers have deployed Autopilot with Lenovo. The second major offering is Premier Support, like in the in the server business, where Premier Support is absolutely critical to run critical infrastructure, we see a lot of our customers do want to have Premier Support for their end users, so they can be back into work basically instantly, and that you have the highest possible instant repair on every single device. And then finally we have a significant amount of time invested into understanding how the software as a service really can get into one philosophy. And many of you already are consuming software as a service in many different contracts from many different vendors, but what we've created is one platform that really can manage this all together. All these things are the foundation for a device as a service offering that really can manage this end-to-end. So, implementing an intelligent workplace can be really a daunting prospect depending on where you're starting from, and how big your company ultimately is. But how do you manage the transformation of technology workspace if you're present in 50 or more countries and you run an infrastructure for more than 100,000 people? Michelin, famous for their tires, infamous for their Michelin star restaurant rating, especially in New York, and instantly recognizable by the Michelin Man, has just doing that. Please welcome with me Damon McIntyre from Michelin to talk to us about the challenges and transforming collaboration and productivity. (audience applauding) (electronic dance music) Thank you, David. >> Thank you, thank you very much. >> We on? >> So, how do you feel here? >> Well good, I want to thank you first of all for your partnership and the devices you create that helped us design, manufacture, and distribute the best tire in the world, okay? I just had to say it and put out there, alright. And I was wondering, were those Michelin tires on that Aston Martin? >> I'm pretty sure there is no other tire that would fit to that. >> Yeah, no, thank you, thank you again, and thank you for the introduction. >> So, when we talk about the transformation happening really in the workplace, the most tangible transformation that you actually see is the drastic change that companies are doing physically. They're breaking down walls. They're removing cubes, and they're moving to flexible layouts, new desks, new huddle rooms, open spaces, but the underlying technology for that is clearly not so visible very often. So, tell us about Michelin's strategy, and the technology you are deploying to really enable this corporation. >> So we, so let me give a little bit a history about the company to understand the daunting tasks that we had before us. So we have over 114,000 people in the company under 170 nationalities, okay? If you go to the corporate office in France, it's Clermont. It's about 3,000 executives and directors, and what have you in the marketing, sales, all the way up to the chain of the global CIO, right? Inside of the Americas, we merged in Americas about three years ago. Now we have the Americas zone. There's about 28,000 employees across the Americas, so it's really, it's really hard in a lot of cases. You start looking at the different areas that you lose time, and you lose you know, your productivity and what have you, so there, it's when we looked at different aspects of how we were going to manage the meeting rooms, right? because we have opened up our areas of workspace, our CIO, CEOs in our zones will no longer have an office. They'll sit out in front of everybody else and mingle with the crowd. So, how do you take those spaces that were originally used by an individual but now turn them into like meeting rooms? So, we went through a large process, and looked at the Hub 500, and that really met our needs, because at the end of the day what we noticed was, it was it was just it just worked, okay? We've just added it to the catalog, so we're going to be deploying it very soon, and I just want to again point that I know everybody struggles with this, and if you look at all the minutes that you lose in starting up a meeting, and we know you know what I'm talking about when I say this, it equates to many many many dollars, okay? And so at the end the day, this product helps us to be more efficient in starting up the meeting, and more productive during the meeting. >> Okay, it's very good to hear. Another major trend we are seeing in IT departments is taking a more hands-off approach to hardware. We're seeing new technologies enable IT to create a more efficient model, how IT gets hardware in the hands of end-users, and how they are ultimately supporting themselves. So what's your strategy around the lifecycle management of the devices? >> So yeah you mentioned, again, we'll go back to the 114,000 employees in the company, right? You imagine looking at all the devices we use. I'm not going to get into the number of devices we have, but we have a set number that we use, and we have to go through a process of deploying these devices, which we right now service our own image. We build our images, we service them through our help desk and all that process, and we go through it. If you imagine deploying 25,000 PCs in a year, okay? The time and the daunting task that's behind all that, you can probably add up to 20 or 30 people just full-time doing that, okay? So, with partnering with Lenovo and their excellent technology, their technical teams, and putting together the whole process of how we do imaging, it now lifts that burden off of our folks, and it shifts it into a more automated process through the cloud, okay? And, it's with the Autopilot on the end of the project, we'll have Autopilot fully engaged, but what I really appreciate is how Lenovo really, really kind of got with us, and partnered with us for the whole process. I mean it wasn't just a partner between Michelin and Lenovo. Microsoft was also partnered during that whole process, and it really was a good project that we put together, and we hope to have something in a full production mode next year for sure. >> So, David thank you very, very much to be here with us on stage. What I really want to say, customers like you, who are always challenging us on every single aspect of our capabilities really do make the big difference for us to get better every single day and we really appreciate the partnership. >> Yeah, and I would like to say this is that I am, I'm doing what he's exactly said he just said. I am challenging Lenovo to show us how we can innovate in our work space with your devices, right? That's a challenge, and it's going to be starting up next year for sure. We've done some in the past, but I'm really going to challenge you, and my whole aspect about how to do that is bring you into our workspace. Show you how we make how we go through the process of making tires and all that process, and how we distribute those tires, so you can brainstorm, come back to the table and say, here's a device that can do exactly what you're doing right now, better, more efficient, and save money, so thank you. >> Thank you very much, David. (audience applauding) Well it's sometimes really refreshing to get a very challenging customers feedback. And you know, we will continue to grow this business together, and I'm very confident that your challenge will ultimately help to make our products even more seamless together. So, as we now covered productivity and how we are really improving our devices itself, and the transformation around the workplace, there is one pillar left I want to talk about, and that's really, how do we make businesses smarter than ever? What that really means is, that we are on a journey on trying to understand our customer's business, deeper than ever, understanding our customer's processes even better than ever, and trying to understand how we can help our customers to become more competitive by injecting state-of-the-art technology in this intelligent transformation process, into core processes. But this cannot be done without talking about a fundamental and that is the journey towards 5G. I really believe that 5G is changing everything the way we are operating devices today, because they will be connected in a way like it has never done before. YY talked about you know, 20 times 10 times the amount of performance. There are other studies that talk about even 200 times the performance, how you can use these devices. What it will lead to ultimately is that we will build devices that will be always connected to the cloud. And, we are preparing for this, and Kirk already talked about, and how many operators in the world we already present with our Moto phones, with how many Telcos we are working already on the backend, and we are working on the device side on integrating 5G basically into every single one of our product in the future. One of the areas that will benefit hugely from always connected is the world of virtual reality and augmented reality. And I'm going to pick here one example, and that is that we have created a commercial VR solution for classrooms and education, and basically using consumer type of product like our Mirage Solo with Daydream and put a solution around this one that enables teachers and schools to use these products in the classroom experience. So, students now can have immersive learning. They can studying sciences. They can look at environmental issues. They can exploring their careers, or they can even taking a tour in the next college they're going to go after this one. And no matter what grade level, this is how people will continue to learn in the future. It's quite a departure from the old world of textbooks. In our area that we are looking is IoT, And as YY already elaborated, we are clearly learning from our own processes around how we improve our supply chain and manufacturing and how we improve also retail experience and warehousing, and we are working with some of the largest companies in the world on pilots, on deploying IoT solutions to make their businesses, their processes, and their businesses, you know, more competitive, and some of them you can see in the demo environment. Lenovo itself already is managing 55 million devices in an IoT fashion connecting to our own cloud, and constantly improving the experience by learning from the behavior of these devices in an IoT way, and we are collecting significant amount of data to really improve the performance of these systems and our future generations of products on a ongoing base. We have a very strong partnership with a company called ADLINK from Taiwan that is one of the leading manufacturers of manufacturing PC and hardened devices to create solutions on the IoT platform. The next area that we are very actively investing in is commercial augmented reality. I believe augmented reality has by far more opportunity in commercial than virtual reality, because it has the potential to ultimately improve every single business process of commercial customers. Imagine in the future how complex surgeries can be simplified by basically having real-time augmented reality information about the surgery, by having people connecting into a virtual surgery, and supporting the surgery around the world. Visit a furniture store in the future and see how this furniture looks in your home instantly. Doing some maintenance on some devices yourself by just calling the company and getting an online manual into an augmented reality device. Lenovo is exploring all kinds of possibilities, and you will see a solution very soon from Lenovo. Early when we talked about smart office, I talked about the importance of creating a software platform that really run all these use cases for a smart office. We are creating a similar platform for augmented reality where companies can develop and run all their argumented reality use cases. So you will see that early in 2019 we will announce an augmented reality device, as well as an augmented reality platform. So, I know you're very interested on what exactly we are rolling out, so we will have a first prototype view available there. It's still a codename project on the horizon, and we will announce it ultimately in 2019, but I think it's good for you to take a look what we are doing here. So, I just wanted to give you a peek on what we are working beyond smart office and the device productivity in terms of really how we make businesses smarter. It's really about increasing productivity, providing you the most secure solutions, increase workplace collaboration, increase IT efficiency, using new computing devices and software and services to make business smarter in the future. There's no other company that will enable to offer what we do in commercial. No company has the breadth of commercial devices, software solutions, and the same data center capabilities, and no other company can do more for your intelligent transformation than Lenovo. Thank you very much. (audience applauding) >> Thanks mate, give me that. I need that. Alright, ladies and gentlemen, we are done. So firstly, I've got a couple of little housekeeping pieces at the end of this and then we can go straight into going and experiencing some of the technology we've got on the left-hand side of the room here. So, I want to thank Christian obviously. Christian, awesome as always, some great announcements there. I love the P1. I actually like the Aston Martin a little bit better, but I'll take either if you want to give me one for free. I'll take it. We heard from YY obviously about the industry and how the the fourth Industrial Revolution is impacting us all from a digital transformation perspective, and obviously Kirk on DCG, the great NetApp announcement, which is going to be really exciting, actually that Twitter and some of the social media panels are absolutely going crazy, so it's good to see that the industry is really taking some impact. Some of the publications are really great, so thank you for the media who are obviously in the room publishing right no. But now, I really want to say it's all of your turn. So, all of you up the back there who are having coffee, it's your turn now. I want everyone who's sitting down here after this event move into there, and really take advantage of the 15 breakouts that we've got set there. There are four breakout sessions from a time perspective. I want to try and get you all out there at least to use up three of them and use your fourth one to get out and actually experience some of the technology. So, you've got four breakout sessions. A lot of the breakout sessions are actually done twice. If you have not downloaded the app, please download the app so you can actually see what time things are going on and make sure you're registering correctly. There's a lot of great experience of stuff out there for you to go do. I've got one quick video to show you on some of the technology we've got and then we're about to close. Alright, here we are acting crazy. Now, you can see obviously, artificial intelligence machine learning in the browser. God, I hate that dance, I'm not a Millenial at all. It's effectively going to be implemented by healthcare. I want you to come around and test that out. Look at these two guys. This looks like a Lenovo management meeting to be honest with you. These two guys are actually concentrating, using their brain power to race each others in cars. You got to come past and give that a try. Give that a try obviously. Fantastic event here, lots of technology for you to experience, and great partners that have been involved as well. And so, from a Lenovo perspective, we've had some great alliance partners contribute, including obviously our number one partner, Intel, who's been a really big loyal contributor to us, and been a real part of our success here at Transform. Excellent, so please, you've just seen a little bit of tech out there that you can go and play with. I really want you, I mean go put on those black things, like Scott Hawkins our chief marketing officer from Lenovo's DCG business was doing and racing around this little car with his concentration not using his hands. He said it's really good actually, but as soon as someone comes up to speak to him, his car stops, so you got to try and do better. You got to try and prove if you can multitask or not. Get up there and concentrate and talk at the same time. 62 different breakouts up there. I'm not going to go into too much detai, but you can see we've got a very, very unusual numbering system, 18 to 18.8. I think over here we've got a 4849. There's a 4114. And then up here we've got a 46.1 and a 46.2. So, you need the decoder ring to be able to understand it. Get over there have a lot of fun. Remember the boat leaves today at 4:00 o'clock, right behind us at the pier right behind us here. There's 400 of us registered. Go onto the app and let us know if there's more people coming. It's going to be a great event out there on the Hudson River. Ladies and gentlemen that is the end of your keynote. I want to thank you all for being patient and thank all of our speakers today. Have a great have a great day, thank you very much. (audience applauding) (upbeat music) ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ba do ♪

>> Announcer: Live from Vancouver, Canada, it's theCUBE, covering OpenStack North America 2018. Brought to you by Red Hat, the OpenStack Foundation, and its ecosystem partners. >> Welcome back to theCUBE's coverage of OpenStack Summit 2018 in Vancouver. I'm Stu Miniman with my cohost for the week, John Troyer. Happy to welcome to the program first-time guest Ildiko Vancsa, coming off the edge keynote presentation this morning. She is the ecosystem technical lead with the Edge Computing Group as part of the OpenStack Foundation. Thanks so much for joining us. >> Thank you. >> Coming into this show, edge is one of those things that it was actually pretty exciting to talk about because edge is not only super hot, but when I thought back to previous shows, this is the sixth year we've had theCUBE here and my fifth year doing it, it's like, wait, I've been talking to all the Telcos for years here. NFV was one of those use cases, and when you connect the dots, it's like oh, edge, of course. I said this conference is actually hipster when it comes to edge. We were totally covering it well before we called it that. So, explain to us your role in the foundation and what led to the formation of this track. >> Yeah, so I'm the ecosystem technical lead within the foundation, which is basically a role that belongs under the business development team. So, I'm basically building connections with our ecosystem members. I'm trying to help them succeed with OpenStack, both as software package and as a community. We are embracing open source, of course, so I'm also trying to advocate for involvement in open source because I think that's a key. Like, you know, picking up an open source software component and use it, that's a great start, but if you really want to be successful with it and you want to be able to successfully build it into your business model, then getting involved in the community, both enhancing the software and maintaining of the software, that's really key. So, my role is also onboarding companies as well to be active members of the community, and my focus is shifting toward edge computing. The history of edge computing in OpenStack basically started last May when Beth Cohen from Verizon described their use case, which is OpenStack in a tiny box in production cycle, wow. So that was also a little bit of an eye-opener for us as well, that yes, it's telecom. It's 5G, but this is the thing that's called edge, and maybe this is something that we should also look deeper into. So, we went to San Francisco last September, OpenDev, 200 people, architects, software developers trying to figure out what edge computing is. I think we had the question at every single session, someone asked that, okay, yeah so, what did you mean exactly when you said edge? Because from the nature of the architecture, like, you have the central cloud and then the sides on the different-- >> John: There are several edges depending on how far you want to go. >> Exactly. >> For you and OpenStack, what does edge mean, or all the above? >> With OpenStack, so after OpenDev when we realized that it's not really a well-defined term, we wrote up a white paper. It's at OpenStack the role/edge. It's a short one, really to just set the ground for what edge computing is. And what we came up with is, so don't imagine like a two-sentence definition for edge computing because I still strongly believe that doesn't exist, and anyone who claims it, that's not true. What we did with the white paper is basically we set characteristics and criteria that defines cloud edge computing per se, like what people are talking about when you're moving out the compute and then working closer to the edge. Like what that means from the bandwidth perspective, from how you will manage it, what that means for security, and all these sort of things. And you can basically characterize what edge means. So we rather described these layers and how far we go, and as far as like, you know, the very end edge device and like the IOT sensors, that's not a target of OpenStack. So, OpenStack itself is infrastructure as a service, so our Edge Computing Group is still staying on that layer. The Edge Computing Group itself is focusing on the angles, what edge brings onto the table, all these requirements, you know, collecting the use cases and trying to figure out what's missing, what we need to implement. >> If can repeat and maybe I'll get it right or wrong. The idea is at a cell tower or at a remote office or branch office or some closet somewhere, there is a full set of OpenStack running, maybe a minimal set of OpenStack, but it's live, it's updatable. You can update services on it. You can update the actual OpenStack itself, and it doesn't need the spoke hardware necessarily, but it's now updatable and part of a bigger multi-cloud infrastructure from some sort of service entity or enterprise. >> Yeah. >> Is that fair? >> I think that's fair. So, there's OpenStack itself that people know very well, a lot of projects. So when we talk about edge, obviously we don't want to say that, okay, pick the whole thing and install all the 60 projects because that's really not suitable for edge. So what, for example, the group is looking into, that which OpenStack components are essential for edge. And also the group is defining small edge, medium edge, what that means from hardware footprint perspectives, so just to figure out what the opportunities are there, what will fit, what will not fit. OpenStack itself is very modular by today, so you can pick up the services that you need. So what we discussed, for example, this week is Keystone, identity, you need it of course. So how much that fits into the edge scenarios. And I think the main conclusion of the forum session yesterday was that, yeah, Keystone supports Federation. We talked through the cases, and it seems like that it's kind of there. So, we now need a few people who will sit down, put together the environment, and start testing it because that's when it comes out that, you know, almost there, but there a few things to tweak. But basically the idea is what you described, pick up the component, put it there, and work with it. We also have another project called Cyborg, which is fairly new. That's for hardware acceleration, so it is providing a framework to plug in GPUs, FPJs, and these sort of, a bit more specialized hardware which will be really useful for edge use cases to OpenStack. So that's for example something that China Mobile and the OPNFV Edge Cloud Group is looking into to use, so I really hope that we will get there this year to test it in the OPNFV Pharos Labs in action. So we also have pretty great cross-community collaboration on trying to figure this whole thing out. >> Yeah, it often helps if we have examples to talk about to really explain this. Beth Cohen, we spoke with her last year and absolutely caught our attention. Got a lot of feedback from the community on it. Had Contron on earlier this week talking about, John was saying, here's some small device there with a little blade and is running pieces of OpenStack there to be able to run. Anything from the keynote or, boy, I think there's 40 sessions that you've got here. If you can, give us a couple of examples of some of the use cases that we're seeing to kind of bring this edge to reality. >> Example use cases is, we just heard this morning, for example, someone from the textile industry like how to detect issues with the fabric. So this is like one new manufacturing use case. I also heard another one, which is not checking the fabric itself, but basically the company who manufactures those machines that they are using to create the fabric, so they would like to have a central cloud and have it connected to the factories. So, being able to monitor how the machines are doing, how they can improve those machines, and also within the factory to monitor all the circumstances. Because for all the chemical processes, it's really important that the temperature and everything else is just, you know, clicks because otherwise all your fabrics will have to go to trash. So, that's manufacturing. A lot of telecom 5G, obviously that is really, really heavy because that's the part of the industry which is there today, so with 5G, all those strict requirements. This is really what we are mainly focusing on today. We are not specializing anything for telecom and in 5G use cases, but we want to make sure that all our components fit into that environment as well. In the white paper, for example, you also could see the retail use case. I'm not sure whether that will be exactly on stage this week, but that is also a great example on like Walmart with the lot of stores around, so how you manage those stores because they're also not wanting to do everything centrally. So, they would like to move the functionality out. What if the network connectivity is cut? They still have to be able to operate the store as nothing happened. So, there are a lot of segments of the industry who already have kind of really well-defined use cases. And what we see is that there's many overlapping between the requirements from the different segments that we're going to address. >> Are we seeing things like AI and ML coming up in these conversations also? >> Yes, like I think it was the manufacturing use case when I heard that they are planning to use that, and it's popping up. I think as far as our group is concerned, we are more looking into, I don't know, let's say lower-level requirements like how you maintain and operate the hundreds and thousands of edge sites, what happens with security, what happens with monitoring, what happens with all these sort of things. Like we have a new project rolling in under the foundation umbrella called Airship, which is basically deployment and lifecycle management, which is supposed to address one of the aspect that you were talking about on, okay, so how you manage this, how you upgrade this. And upgrade is, again, a really interesting question because I think I talked to someone yesterday who was like, yes, the Contron guys, they were saying that yeah, upgrade, it's really ambitious. So let say that maybe 18, 24 month or something like some kind of tech operator will decide to upgrade something out in the edge because it's out there, it's working, let's not touch this. So when we talk about upgrade, even that, I think, will depend on the bits of the industry that, what pace they will decide to take. >> Are there any particular surprises or learnings that you've had this year after talking with this community for a week now? You said, well, last year, I was very impressed last year when they got up on stage and talked about that. That kind of expanded my mind a little bit. You've been working with this now for a year, this whole track and forum sessions. Anything you're excited about taking to the future or learnings or surprises that, oh, this is really going to work or anything like that? Any parts of it that are really interesting? You talked about security upgrades. We've talked about a lot of the technical components, but it seems like it's working. >> I think at this point, at least on my end, I think I'm over the surprise phase. So what surprises me the most is how many groups there are out there who are trying to figure out what this whole edge thing is. And what we need to really focus on among the technical requirements is that how we are working together with all these groups just to make sure that the integration between the different things that we are all developing and working on is smooth. So like, we've been working together with the OPNFV community for a while now. It's a really fruitful relationship between us. Like seeing OpenStack being deployed in a full-stack environment and being tested, that's really priceless. And we are planning to do the same thing with edge as well, and we are also looking into ONAP, Aquino, Et-see-mac, so looking into the open source groups, looking into the standardization and really just trying to ensure that when we talk about open infrastructure, that that really is designed and developed in a way that integrates well with the other components. It's synchronized with the standardization activities because I think especially in case of edge, when we say interoperability, that's a level higher than what we call the interoperability on the telecom level I think. Like when you just imagine one operator network and applications from other providers popping up in that network, and components that just realizing the network popping up from different vendors. And this whole thing has to work together. So, I think OpenStack and open infrastructure has a really big advantage there compared to any proprietary solution because we have to address this, I think, really big challenge, and it's also a really important challenge. >> Ildiko, really appreciate you giving us all the updates here on the edge track, the keynote, definitely one of the areas that is capturing our attention and lots of people out there. So, thanks so much for joining us. >> Thank you for the opportunity. >> All right, for John Troyer, I'm Stu Miniman. Lots more coverage here from the OpenStack Summit 2018 in Vancouver. Thanks for watching theCUBE.

(upbeat music) >> Hey, welcome back everybody. Jeff Frick here with theCUBE. We're in our Palo Alto Studios for our CUBE Conversation, taking a little break from the shows as we get ready, actually, for the winter break which will be a nice little break for us and the crews and the gear. This is different, exciting. It's a little bit more intimate. We're really excited to have our next guest. He's Sunil Khandekar. He's the founder and CEO of Nuage Networks which is part of Nokia, a CUBE alumni. I think we last saw you at DockerCon 2016. >> That's right. >> Jeff: So, great to see you. >> Good to see you again. >> Absolutely, so, been a little more than a year. >> Sunil: That's right. >> So, what do you see as the evolution since we last spoke at DockerCon? >> Sure, it's been great. I couldn't be more pleased with the momentum that we have garnered in the industry: more adoption of our solution, more validation, more events, more customers. >> Jeff: (chuckling) >> Which is great, that's all good stuff. And really, more specifically, in terms of adoption, large service providers across the globe like BT, Telefonica, TELUS, Exponential-e, they're all adopted and launched with our SDN solution. We have had breakthrough wins in terms of public cloud whether it's Fujitsu or whether it's an NTD Data like China Mobile. And of course, you know we continue to have a solid momentum in financial services companies, for private cloud automation, as well as to provide them security software to find security in addition to the private cloud automation. And we had another breakthrough win in China Pacific Insurance Company. So, that continues, and of course it's great always to receive some good validation. So we've won award at MEF on the best SDN solution recently. We won the Right Stuff Award, Innovation Award at ONUG for software-defined security. And every leading analyst firm, Gartner, Forrester, IDC, IHS Markit, ACG, and recently Global Data, they've all put us in the top two as the inventors for doing automation of networking end-to-end. >> Right, because automation in networking was the last piece of kind of the virtualization stack, right, in the automation. So, what is it that you think that you guys are doing special that's allowing you to win? >> Right, so if you remember when we talked, when we started Nuage, we started Nuage to automate networking end-to-end with a software-based approach at the heart of which is a declarative policy and analytics engine. And what that means is we were doing intent-based networking before it was even a thing. >> Jeff: Right. >> And we were doing software-defined networking but in a way that allowed us to do software-defined networking not only in the data center, between the data centers to the public cloud across the wide area and to the enterprise branches. What that means is you're not providing a siloed automation, but we are doing automation end-to-end because ultimately it's about connecting users to the applications. >> Right, right, you had a great quote. I picked it up in doing some research. You know, the metaproblem is you said, "Connect users everywhere to applications everywhere," a really simple kind of statement of purpose but not very simple to execute. >> Sunil: You got it. >> A lot of complexity behind that statement. >> That's right, that's right, incredible amount of complexity, but it's important to construct the metaproblem, look at what it is that enterprises have pain with. They have, let's look at it, right? They have users everywhere, and they want to connect to applications anywhere whether it's private or public cloud. How do they want to do it? Quickly, securely, in a self-service manner, but they want this agility without sacrificing safety and security. >> Jeff: Right, right. >> So what you have is you've got to solve this network automation problem for brownfield or greenfield, because there is nothing like just greenfields. >> Right. >> And we are to do it in their private data centers. You've got to help them burst into the public cloud securely. And you've got to connect all their branch sites together. And what we've seen in the industry and our competitors, they are taking a very narrow view of the problem. So what they have is an automation for only the data centers and automation for just the wide area. And that's only solving half the problem. >> Right, right, and then you've got these pesky things that have just reestablished the expected behavior, the expected access, and oh, by the way, added significantly more attack surfaces and really changed the game in terms of what people want from their applications, what they expect from their applications. And it's tough for businesses to deliver to this level of promise. >> Indeed, and you know, the wall is about instant gratification. You want access to your data quickly, instantly wherever you are. >> Right. >> And what that means is, as consumers, we have everything at our fingertips. But as soon as you step into the business environment, that's completely not true. And so, it's all about consumerization of IT on how do you make IT that agile, how do you actually modernize IT. Because enterprises, their high-order problem is what? To innovate faster by having massive automation across all aspects of their business. What underpins that is a modern IT and cloud architecture. And what underpins modern IT and cloud architecture is three clear things that we are seeing in the industry: software-defined data centers, software-defined wide area network, and software-defined security. So, we like and our customers love that we've thought the problem end-to-end and provide all these three, which is absolutely unique in the industry. No one does this. >> So, I'm curious to get your perspective cause you've been doing this for awhile. >> Sunil: Yes. >> As the security landscape has changed. >> Sunil: That's right. >> Everyone is getting, we get reports every day, we're numb to it now. You know, basically everyone at Yahoo got hacked. >> Sunil: That's right. >> And Equifax got hacked, so everyone's getting hacked. So it's really not about the big wall anymore. There's no such thing as the big wall. >> Sunil: That's right. >> The wall's about crumbled. So it's evolving. We've also seen an increase in state-sponsored attacks as opposed to just kids having fun in the basement. >> Sunil: Yeah. >> How have you seen the evolution of the attacks change and how have you responded within your solutions over this period of time to kind of evolve to the modern security stance that you have to have? >> Look every CXO I meet, the absolute thing that's top of mind is how do you make us go from where we are, a traditional environment, to a higher edge automated environment but make it more secure than what we have. >> Jeff: Right, right. >> And as you noted, the attack surface has increased thanks to the mobility. And you have a lot more surface area because you have applications in public cloud, you have applications in private cloud, you have more mobile users. So, the industry term that often gets used is microsegmentation. Now, what that means is, and that's in response to the fact that, as you noted again, that perimeter security just doesn't cut it anymore. And not only that, but it's also very complex and very manual. So what you've got to do is, while you're automating the data centers, while you're automating the wide area, you've got to bring the security along. You've got to make it as agile. And again, what we have done is we do microsegmentation from the branch all the way to where the application is for that particular user. So in other words, finance users can only access finance applications. And that's a microsegment end-to-end. No one in the industry does that today. What they do is they do microsegmentation only for the applications within the data center or they prevent just the users to communicate between each other but not users to the applications. So, that is very important for our customers to know that we have that capability. But then it's all about also understanding what's going on in the network. >> Jeff: Right. >> And that's where the rich analytics that we have just really help them understand who's talking to who at application level, and being able to then have that domain-wide view and be able to very quickly respond to CERT alerts. So, because today, when a CERT alert comes in, they don't know what to do. They take a brute force approach because they simply don't know where and how to react. But now, because you have this centralized intelligence and you have domain-wide view, and you're able to do microsegmentation end-to-end, you are able to push a button and be as course or as granular but be very surgical and take action very quickly. >> Alright, so, hard to believe that we're almost to the end of 2017 which I can't believe. So as we turn the calendar, what are some of your priorities for 2018? You've been doing this for awhile. What are you working on? What's kind of top of mind as we enter this new calendar year? >> Right, and what we are noticing is we're going from beachheads to mainstream. So, we are getting deployed. The solid deployments is not only as I noted in data centers, in public cloud, private cloud, but also in the wide area. We are collaborating with our customers to really make this mainstream because it is super-important in terms of not only providing that automation and agility but also the security. So that's what we are focused on. We continue to do that, not only for what we call the virtualized security services solution that we have and not only the telco clouds, but also the virtualized services, cloud services. We're going to cover the gamut and that's what we're after. We are really excited to be leading the charge here. >> Alright, well, Sunil, thanks for taking a few minutes. Hopefully it won't be 18 months before we sit down again. And we look forward to watching the progress. >> Great, thank you. Thank you for having me. >> It's a pleasure. He's Sunil. I'm Jeff. You're watching theCUBE. We're in our Palo Alto Studios for CUBE Conversations. Thanks for watching. We'll see you next time. (upbeat music)

>> Announcer: Live from Los Angeles it's The Cube covering Open Source Summit North America 2017. Brought to you by the Linux Foundation and Red Hat. >> Hey, welcome back everyone. We're here live in L.A. for the Linux Foundation Open Source Summit North America. I'm John Furrier, your host, with Stu Miniman, my co-host. Our next guest Jim Zemlin, Executive Director of the Linux Foundation, runs the whole show. Welcome back to The Cube, great to see you. >> Thank you, thank you. Runs the whole show is a little bit of an overstatement. >> Well, certainly great keynote up there, I mean, a lot of things coming together. Just some structural things. Let's get the update on what's going on structurally with the Linux Foundation, one, and then two, the keynote today, this morning, really kind of laid out the state of the union, if you will, and all cylinders are pumping, no doubt, on open source. So give the quick update on kind of what's going on with the Linux Foundation and then let's get in some of the trends inside the open source movement. >> Yeah, I mean, our organization has grown quite a bit in the last few years as evident by all the people who are here at this event. But our focus is really on the projects that are important to, you know, the stability, security, and growth of the global internet and of large-scale systems. And when you look at Linux or Node.js or things like our networking projects which are powering the production networks for 3 1/2 billion people, what we're really focused on is making sure those projects are healthy, making sure that they have great developers who write incredible code, that it's used to power things like China Mobile's network or AT&T's production network. And then, those firms are employing the developers who then write more code, you get more solutions, products, services based on Linux or whatever. More reinvestment, lather, rinse, repeat. It's that cycle we're trying to promote. >> So before we get into some of the stats, structurally, I know this show, we've Cube comments out there, clarify the structure. How the shows are rolling out, how are you guys putting together the big-tent events, and how developers can get involved in the specific events across, but now there's a ton of projects. But just at a high level, what's the structure? >> Yeah, so, you know, and I'll throw out a few stats. We have about 25,000 developers that attend all of our events which are all over the world. But we have our Open Source Summit which is really sort of a summit to come together and talk about these big-picture issues around sustainability to allow for cross-project collaboration. We have project-specific events so the CloudNativeCon, KubeCon event which is coming up in Austin which is going to be blow-out, you know, I'm expecting thousands of people. I think probably three, 4,000 people. >> And even more platinum sponsors than I've ever seen on any project before so huge demand. >> It's crazy, yeah. Yeah, you know, get it while it's good, right? All these things kind of go up and down but they're on the upswing. So we have project-specific and then in the networking sector, we have have the Open Networking Summit which is sort of similar to the Open Source Summit but much more focused on networking technology, SDN, and NFD, and that is going to be in L.A. next year and we'll have a U.S. event and then a European and an Asian. >> And this show's purpose is what? How would you position the Open Source Summit? >> The Open Source Summit is where all the projects come together and do cross-pollination. I mean, the idea here is that if you're just always in your silo, you can't actually appreciate what someone else is doing that may improve your project. >> And Jim, there's a couple of events that came together to make this 'cause it was LinuxCon, ContainerCon, and MesosCon is also co-resident so. >> Exactly, so we just decided after a while that all these events could come together and again, this cross-pollination of ideas. >> And they kind of did, they're just different hotels in Seattle last time. >> Yeah, exactly. That's enough, it's just going to be Open Source-- >> It's a big-tent event. >> It's a big-tent event and it really reflects how open source has gone mainstream in a way that I don't think any of us would've predicted even maybe five, six years ago. >> It's pretty massive. Just to quote some stats. 23 million plus open source developers, what you shared onstage there, want to get to your keynote. 41 billion lines of code. 1,000 plus new projects a day. 10,000 new versions pushed per day. 64 million repos on GitHub. Just amazing growth so this kind of points to obviously the rising tide is floating all boats. I made a comment, I tweeted, in the spirit of the joke of standing on the shoulders of giants before you, it's like, what shoulders are we standing on now? Because there's so many projects. Is there going to be like a legacy like the dual-star, badge values, been around for a while? You mentioned old news and you bring up Linus onstage. I mean, some projects are older, more mature, Bruce Wayne, Tier One, meat and potatoes, some got a little bit more flair and fashion to it, if you will. So you got new dynamics going on. Share your thoughts on this. >> Yeah, I mean, it's like the shoulders you're standing on are almost like stage-diving, right? Where it's just lots of people's shoulders that you're really bouncing around on. But the idea here, and what we really focus on, is what are the most important projects in the world and how do we make sure we sustain those projects. So those are the ones that you're going to generally see focused on here. Like, you know, if you've got two people contributing to one small repo for a very small project, that's probably not something that's going to be super high-profile here. But what we're trying to do is bring together sort of the big projects and also the key contributors. You know, if you look at the distribution of contribution, and this is the thing, I think, if you're a developer listening to something like this, someone who gives just one commit to a project to solve some kind of problem they might have, that's the vast majority of people. Somebody who does maybe five to 10 commits, you know, a little bit less, quite a bit less. The vast majority of code, people who give 25 or more commits to a project, small group of folks, they're here. >> I know Stu wants to ask a question, one final question on the growth 'cause this kind of reminds me of sports as we're like the ESPN of tech here for the community. If you look at the growth, you put a slide in there by SourceClear that show the projection, by 2026, at 400 million libraries, putting it today around, I think, 64 million. This is going to be like an owners meeting. It's kind of like they get together, this event because you are going to have so many projects 'cause this is kind of the vibe you got going on in here. The scale is massive, this is going to be almost like the owners meeting, the teams. Expansion's going to be coming, you have to deal with that, that's challenging. >> We're ready to grow, I mean, we've been working on systems and staffing and processes to help scale with that. You know, we take seriously that that code runs modern society. It keeps us private or doesn't as we saw with the Equifax hack which was a CVE in an open source project and we want to be ready to up our game. Let's say we could have secure coding class at this very event for the greatest developers who are working on our most important projects in the world. Would that make all of our lives better? Yes, absolutely. >> Yes, absolutely would. Yeah and you want to enable that, that's where you're going. >> That's exactly where we're going. >> Jim, the quote that jumped out at me that you gave in the keynote was, projects with sustainable ecosystems are the ones that matter. How do we balance all this? I heard in, you know, Linus's Q and A it was, look, individual's important but companies are important. You put up a slide and said, there's thousands and thousands of projects, sometimes we're going to get some really awesome stuff from three people contributing code versus the massive ecosystem with all the platinum providers so, it's always in technology, it's an and and it's very nuanced but how do we get our arms around this? How do we know where to focus? >> It's worth going back in time to understand where the future is going and study innovation theory, you know, Eric von Hippel at MIT, or Karim Lakhani at Harvard Business School. And you look at the framework, which is, you have corporations who underwrite a lot of development by hiring developers who have an equal importance in this and then users of that software. So those are your main constituents and sometimes they're the same people, right, or the same things. They're not mutually exclusive, they're actually self-reinforcing if you get the formula right and you make sure that the project is in good shape so that it gives confidence to industry or society that, hey, we can count on that. I think Heartbleed and OpenSSL maybe rattled people's cages like, hey, can we count on, not just this project, but can we count on open source period? So we spent a ton of time working with that project to provide them millions in resources, audited their code, expanded their testing, and we learned a hell of a lot about how to support these communities in the most important developer projects in the world and create that positive feedback loop, that's what we're doing. >> Yeah and Jim, it's, as an analyst, one of the things we're always asked is, right, how do I choose the right technology? Whereas companies now are contributing here so it's not just I'm putting dollars in, I'm putting manpower into this. And the foundations sometimes get a lot of lung from people, saying it's like, oh well, people throw money and what do they get out of it? I liked what I heard today, you talking about this cycle, and maybe talk to our audience a little bit about CHAOSS which I though was a nice, tongue-in-cheek acronym to say how you're actually going to bring order to the chaos that we see in the open source world. >> I'm going to come to this but I want to answer one quick question about the roles of organizations like ours. We are the roadies, the supporting cast, and the plumbers and the janitors of the system that keep things going but the real rock stars are the developers. If you think about it, Linux is worth $10 billion. An average kernel developer makes probably, let's say $150,000 a year, by the way, they make more than your average developer because they're in such high demand. The role of organizations like ours is such a tiny fraction financially of what is really fueling this model but it's an important one. What we ask ourselves all the time is, why do you need us? Who cares, right? Like, throw your code up on GitHub, you don't need the Linux Foundation, right? Why do we even exist? And the answer is to do things like this Community Health Analytics for Open Source Software, to provide the infrastructure for sustainability. Sustainability is something that we need to measure, right? How many developers are contributing to a project? Are they from a diverse community so that if one group goes away, there'll be somebody else there to do that work? How much test coverage do they have? Are there code quality metrics that we could look at? Do they have security practices like a responsible disclosure policy, a security mailing list? Have they recently fuzzed their code? Are they a community that's welcoming for people of different backgrounds? And so on and so forth. If you don't have a healthy project, you kind of don't want to bet your company on this project by using it in a production system, right? But here's the interesting thing, how many people are using that code in production also is a metric for health, right? Because that's where the reinvestment is going to come in the form of developers who are working on it. >> There's a difference between being proactive and jamming something down someone's throat. So you're taking an approach, if I get this right, to be kind of the same open source ethos, use some KPIs, key performance indicators, to give them a sense of success. But it's not an edict saying-- >> No, no, it can't be an edict. What you want to do is preserve the organic innovation that goes on in open source and get projects to go, and you'll notice that curve of sort of value to volume goes up and to the left, we could've written it to the right but, you know, the whole copyleft thing we love. How do you get that organic innovation to kind of go from this small project up and to the left? How do you capture that? Well, give tools to everyone so that they can better self-analyze. >> John: You get exponential growth with that. >> Exactly. >> If you try to control, it's linear but you bring it to the community, you get exponential growth. >> Exactly, so we studied a ton of innovation theory, we looked at how we could build frameworks to facilitate this kind of form of mass innovation and so that's where tools like CHAOSS which is being worked on by Red Hat and a lot of companies who want to figure out which project should I work on? How can I spot that one earlier? And we're excited about it. >> You know, I always joke, being the old guy that I am, in the late '80s, early '90s, '80s particularly when I was coding. We did everything, we wrote all the code. You bring up an interesting stat and you put the finger on, at least for me, and I think this is where a lot of us old timers who had to do all the libraries from scratch. You mentioned the code sandwich, the code club, the club sandwich, how code's being made and the interesting thing, as you point out, 90% of most great software is done with open source where the 10% innovation is done with original code or original content, if you will, and that that is the norm. So open source is now called the code sandwich because you can put your differentiation and that's a good use of time. >> That's the meat, right. >> That's the meat, it's not a wish sandwich to use the old Blues Brothers example but I mean look, the thing is is that that's dynamic is real, the code is leverageable, and that this is the dynamic so where'd the number come from? Because that seems really high to me but I love it. >> So that number came from a combination of Sonatype, SourceClear, and other organizations that monitor commercial reuse of software on a global basis. So these are the folks who are actually working with commercial industry to look at the makeup of their code, basically. You don't have to go far to look at a Node.js developer, they're using Node.js, they're taking packages out of NPM, and they're writing, they're cut and paste masters, but they write this critical component that's the meat of their application, it's what they do. >> But that's the innovation fabric that's happening. >> It also is a requirement because let's look at a modern, luxury vehicle today. It has 100 million lines of code in it. That's more than an F-35, like, fighter jet. That's an unbelievable amount of code. Toyota, who we work with, and you know, our AGL, our Automotive Grade Linux, is in their Camry. They couldn't write that code on their own. It's just too much. And this is how we get to autonomous vehicle control and things like that. >> I know you got a tight schedule, I want to make one more comment, get your reaction to it. I made a tweet and said, it's open bar in open source and with a reference to all the goodness being donated by companies, Google TensorFlow, there's a lot of other things coming in, these libraries. A lot of people are bringing really, really big IP to the table, IoT, and I kind of made an open remark 'cause a lot of the young kids, they think this is normal, like, well it's going to get better. Keep on drinking that open source. Is this normal? Is it going to be more like this in the future? Because you have essentially real intellectual property, like say from Google, being given to the open source communities as a gift for innovation. I mean, that is just unprecedented greatness. >> The reason for that is they're not doing it necessarily altruistically although I think you can take it that way, they're doing it in a way that betters themselves and others at the same time. I mean, it is a form of collective capitalism where they've realized, my value's over here, it is better for me to collaborate on underlying infrastructure software that my customers don't care about that's not critical to my system but I absolutely have to have and I'm going to focus on data or I'm going to focus on much higher-level innovation. And what that's doing is creating this hockey stick of innovation where, as we share more and more and more infrastructure software, and as that keeps moving up and up the stack, we all benefit. >> So in the theory of the management, bring up management theory, their theory, I'd love to get your thoughts on, is that they're betting on scale rather than trying to go for profits in the short-term, they'd much rather share intellectual property on the back-end value of scale and scale's the new competitive advantage. >> Exactly, take Kubernetes as an example. The fact that, today, and just even a couple years ago this wasn't known, we didn't quite know where this was going to be, but today you can take Node.js, build a container, you know, take an application, throw it into a container, and use Kubernetes to run it on Azure, Amazon, Google, or in a private cloud. That definition, the ability to do that, unlocks this massive developer productivity which creates more value which is more business opportunity for all these guys. You know, they're not doing it 'cause they're nice people, they're doing it 'cause they're unlocking market potential. >> And they're the real rock stars. Jim you're doing a great job. Congratulations on your success. You got a lot of growth in front of you, a lot of challenges and opportunities certainly with that and of course, the tech athletes out there doing the coding, they're the real rock stars, they're the real athletes. Of course, we get more on The Cube, thanks for your support with The Cube as well, appreciate that. >> Jim: Thank you, thanks for everything. >> Alright, this is live coverage from Open Source Summit North America in Los Angeles, California. I'm John Furrier, Stu Miniman, we'll be back with more live coverage after this short break.

(cheerful music) >> Voiceover: Live, from Los Angeles, it's theCUBE covering Open Source Summit North America 2017, brought to you by the Linux Foundation and Red Hat. >> Okay, welcome back here when we're here live with theCUBE coverage of Linux Foundation Open Source Summit North America in Los Angeles, I'm John Furrier, Stu Miniman, our next guest is Arpit Joshipura, General Manager of Networking the Linux Foundation. Welcome back to theCUBE, great to see you. >> Thank you, nice to be here again. >> Always good to talk networking, as Stu and I always say networking is probably the most active audience in our community, because at the end of the day, everything rolls downhill to networking when the people complain. It's like "where the hell's my WiFi, "where's the patent latency," networking SDN was supposed to solve all that. Stu, we're still talking about networking. When are we going to fix the network? It's always in the network, but important. In all seriousness, a lot of action continues and innovation to networking. >> Absolutely. >> What's the update? >> Update is very exciting. So first of all, I can confidently say that open source networking, not just networking, but open source networking is now mainstream. And it's mainstream in the telcos, in the carriers, service providers, it's getting there in the enterprise. And Linux Foundation is really proud to host eight of the top 10 projects that are in open source networking. ONAP, ODL, OPNFV, Fido, you know, the list goes on. And we're really excited about each of these projects, so good momentum. >> We've been seeing and talking about it too, we all, joking aside, the intro there, but in all seriousness we've been saying, we get better the network, it's finally happening. Has it been a maturization of the network itself, has it been industry force and what have been the forces of innovations been? OpenStack has done some great work, they're not getting a lot of love these days with some people, but still we've seen a lot of production workflows at OpenStack, OpenStack's still there, rocking and rolling. New projects are onboarding, you see the telcos getting business models around digital. What's the drivers? Why is network mainstream now? >> I think it's a very simple answer to that, and that is before 5G and IoT hit the market, network better be automated. It's a very simple requirement. And the reason is very self-explanatory, right? You can't have an IoT device on the call on hold while you get your service up (laughs). So, it's IoT, right? And it is the same thing on 5G, a lot of new use cases around cars or around low latency apps. You need automation, and in order to have automation, a carrier or a solution provider goes through a simple journey. Am I virtualized? Yes or no? Am I using the building blocks of SDN and NFV? Yes or no? And the third, which is now reality, which is, am I using open source to do it? Yes, and I'm going to do it. And that's the driver right? I mean it's all- >> Automation, when you started throwing out a lot of TLAs, you talk about SDN and NFV, we've got a four-letter acronym that we need to talk about. The Open Network Automation Platform. Why don't you bring your audience up to speed, what that is, the news that you have this week. >> Absolutely, so ONAP was launched earlier in 2017. It's a combination of two open source projects, ECOMP and Open-O, and we wanted to bring the community together versus sort of fragmented, and because our end users are asking for a harmonized solution. So we brought it together. It was launched earlier this year as we talked about, but the most significant thing is it has received tremendous support from the member community. So at OSS today, we just announced that Vodafone has joined as a platinum member. They will be on our board, and as you know Vodafone is one of the top providers. So if you add up all the subscribers that are being influenced by ONAP, they come to 55%. So out of the 4.5 billion subscribers that exist, more than 55% will be influenced by ONAP and the work that happens. That includes China Mobile, China Telecom, China Unicom, all of the China, Bell Canada, AT&T obviously who sort of was the founding member, Orange, Reliance Jio from India. So we've got, Comcast joined earlier in the quarter, so we've got cable companies, carriers, all joining. And to be very honest, I'll probably just give you the list of all the networking vendors that are participating here, and I've list Amdocs, Cisco, Ericsson, GigaSpaces, Hua Wei, IBM, Intel, Nokia, Tech Mahindra, VMware, ZTE, Juniper, you know, you name it. >> Arpit, I mean the long story short is-- >> Just cause they're involved does that mean they're actually working-- >> They're active. Active. >> we're not going to be critical on this. >> But come on, even Cisco's involved in the open source stuff, right? >> They've very active. >> We've had lots of guests on from Cisco, Lulu Tucker's been on many many times. We know the open source there, but it used to be, networking was very proprietary. Now, it wasn't SDNs going to totally change everything, it's lots of different pieces, lots of different projects. It kind of felt like the river slowly wearing down the mountain as to this transition from proprietary to open source. >> I think what happened is if you just look at four years back, it was proprietary. Not because people liked it, that was the only game in town. When the open source industry, especially in the networking, and this is a hundred year old industry, telecom right? When it came in in the desegregated manner, hardware and software separated, control plane separated from data plane, all of that happened, and what happened suddenly was each components started becoming mature. So they're production-ready components, and what ONAP and what Linux Foundation is intending to do this year is trying to bring all the components into a system solution. So that it's easy to deploy, and all you have to do is point, click a service, everything below it will all be automated and integrated. >> Well the telcos are under a lot of pressure. I mean this has been a decade run, over-the-top they've been struggling with that from years ago, decade ago or more. But now they're getting their act together. We're seeing some signs, even VMworld. Stu, Pat Gelsinger said 5G's the next big kahuna in networking the next 20 years, you can validate it. This is going to be a 20 year changeover, so as the Linux Foundation, which essentially is the organic growth engine for this community, what do you guys see in that 20 years? Cause I see 5G's going to create all these connection points. IoT is going to be massive. That's going to increase the surface area for potential attacks. We're seeing a networking paradigm that's moving from old guards Cisco, Juniper, and some of the names you mentioned. They got to make some changes. How are they adjusting? What's going on so the next 20 years we don't have more conflict and more identity politics. >> I'll tell you one thing, I come from a vendor community, right? So I really appreciate the work they're doing. Part of the reason you would have seen in the past a vendor dragging their feet is because of fragmentation in the community. You as a vendor do not know where to put your resources, people, and where you put your money. What we're doing at the Linux Foundation is starting to harmonize all that. And once you do that and you have enough of a scale and enough of a community, there is no shortage of people and developers that the vendors are contributing to. >> John: What's some of the proof points that you can share? >> Okay, so ONAP, from start to now, about 1100 Wiki members already. That means 1100 unique developers are joining the project. Over 50 members. We ran out of VMs, I mean it's like that has not happened in any project for over five years. We had to fire up people more. So you can see that... And this is not just, these are competitors, but if you step back and look at it, they're competitors from an end user perspective, but they're solving the common problem in which they don't get any money. They don't make any money. These are things that absolutely need to happen. The plumbing, the infrastructure, the orchestration, the control layer, the data plane layer, all of that need to just happen, it should just work. And let them differentiate on top. We are actively seeing almost everybody participating significantly. >> Stu, let's hear your thoughts on this. You guys are both, I view you guys both as experts and influencers in this networking ecosystem, so I got to ask you both a question. CNCF has gotten a lot of traction with funding, sponsorships are off the charts, you're seeing massive tractions, Stu, where you also see that KubeCon Cloud Native, but you have native clouds, I call them native clouds, in Amazon and then soon-to-be enterprises that want to run software-defined networking. So the question is do you see the same kind of support going for your group as CNCF's getting? Is it just fashionable at this point, CNCF? Why isn't the networking getting as much love at least from a sponsorship standpoint. >> Let's define love. So if you define love as the 2017 ONS, which is our largest networking summit, we grew that 10%, everything was off the charts. The feedback, the content-- >> John: The attendance growth or sponsorships? >> Attendance, sponsorships, CFPs were 5x oversubscribed. Call for papers, for submissions, 5x oversubscribed. So we had a hard time picking the best of the best. ONS 2018 is going to be here in LA, we've already started getting requests on, you know, so we're the same boat. >> So you feel good. >> We feel good. >> Not about this, like you're winning. >> No, but I tell you-- >> There'll be positive numbers we know from the hype scale horses, Stu, answer your question and then maybe you guys can comment. So is it a matter of that there's more buzz in positioning involved in the hype side of CNCF now, and there's just meat and potatoes being done in the networking world, Stu? Cause you and I both know, if no one has nothing to say, they've got to kind of market themselves. >> So John, think back to five years ago, how much hype and buzz there was around SDN. John, you and I interviewed like Martin Casado, he just bought for $1.4 billion, all these startups, lots of VC investment, so I think we're further down the maturity curve. Now networking's always-- >> John: People going to work, they're doing their job. >> It's real, it's in production-- >> It's funny-- >> It's not parb, I always say when you move from PowerPoint to production, real things happen. >> I always say, if there's going to be sizzle, I better see some steak on the grill, so what's happening is steak is cooking right now. >> And John, so one of the things we say, networking, no offense to all my friends in networking, networking is never sexy. >> Oh, come on Stu, networking is totally sexy. >> I always say it's cool again. >> Networking has never lost its edge. >> It absolutely is majorly important, but Arpit, take us in, you know, Kubernetes is hot, containers get a lot of buzz and everything. Networking, critical piece of making sure that this works, feels like, I think back to the virtualization days, it took us 10 years to kind of solve those things that that abstraction layer broke. It feels like networking is further ahead than it was, it's moving faster, we understand it's not something that's just kind of oh we'll let the networking guys get to it eventually. Networking and security, which often has that networking tie are front and center now. >> Very good point, and I think what you have to also sort of step back and look at is what are the problems that need to be solved from an end user perspective? So the hardest networking problems at the data plane control layers, check. Next big problem that remain to be solved was orchestration, data analytics, and things like that. Check, solve, with ONAP. Now the next problems that need to be solved are containerization of enterprise app, which is where Kubernetes and... and then how does containerization work with networking? That's all the C&I, the interfaces. I would say next year, you will start to see the interworking and the blend of these "hot projects" where they can all come together. >> Stu, you were there in 2010, I looked right in the camera and said to Dave Vellante, storage is not as sexy. And Dave called it snoreage, cause snoreage is boring. (Stu laughs) >> And at that time, the storage industry went on a run. And we well-documented that. Sexy is, networking is sexy. And I think that we-- >> I call it cool. >> And I just tweeted, 25g is a good indicator of a 20 year run, and networking is the big kahuna as Pat Gelsinger said in IoT, so I think, Stu, I think it's going to be very apparent, sexy. I just don't see a lot of amplifications, so you don't see a lot of people marketing the sizzle. I think, being done I would agree, but Stu, there's more buzz and hype on the CNCF side than networking. >> That's fair. I think it is always as you said, it's the initial phase of any project that gets a lot of clicks and a lot of interest, and people want to know about it. A lot of the buzz is around, just awareness. The classic marketing cycle, and I think we're past that. It was therefore ONAP in January, we're past that. >> Alright, so here's the question, final question. So the steak is coming off the grill in our metaphor here, what are people-- what is that product, what's happening, what is the big deliverable right now from a networking standpoint that people can bet on and know that they can cross the bridge into the future with it. >> You will see a visible difference, you as in an end user, an enterprise, or a residential consumer. You will see a significant difference in terms of how you get services. It's as simple as that. Why? Because it's all automated. Network on-demand, disaster recovery, video conference services. Why did over-the-top players, why were they so successful? If you need a Gmail ID, you go in, you get one. It's right there. Try getting a T1 line five years ago. That would be six weeks, six months. So with the automation in place, the models are converging. >> So provisionings are automatically happening-- >> Provisionings, service, and then the thing that you will not see but you will see in the services impact, is the closed loop automation that has all the analytics built in. Huge, huge. I mean, network is the richest source, and by the way, I'll come back next year and I'll tell you why we are cool again. Because all of a sudden, it's like oh my god look at that data and the analytics that the network is giving me. What can I do with it? You can do AI, you can do machine learning, you can do all these things. >> Well, we're looking forward to it, the eye of the storm is kind of happening now I think in networking, Stu and I always have debates about this, cause we see a lot of great action. Question is, let's see the proof points, you guys are doing some good work. Thanks for sharing, Arpit, really appreciate, General Manager of Networking at Linux Foundation. It's theCUBE, more live coverage from Los Angeles, the Open Source Summit North America. I'm John Furrier, Stu Miniman, be back with more live coverage after this short break. (techno music)

(upbeat music) >> Narrator: Live from Boston Massachusetts, it's The CUBE covering OpenStack Summit 2017, brought to you by the OpenStack Foundation, Red Hat and additional ecosystem support. >> Welcome back, I'm Stu Miniman joined by my co-host John Troyer. You're watching The CUBE, the worldwide leader in live tech coverage. Happy to welcome to the program Darrell Jordan-Smith who's the Vice President of Telecommunications at Red Hat. Thanks so much for joining us. >> It's great to be here thank you >> All right so Darrell last year at the show you know the telcos were like all in force. I got to interview Verizon. We're going to have Beth who was on the keynote stage on Monday on our coverage tomorrow. I know they're a Red Hat customer. When I hear at Red Hat summit, there were some really big telcos that are red hat customers. So to tell us why telco and OpenStack you know go so well together these days? >> Well telcos are looking for a open source for innovation. They need to change the way that they deliver services today and modernize their network infrastructure to become more agile, and a lot of them are doing that because of 5G, the next generation of services that they will be deploying over their network infrastructure. They can't do that unless they have an agile infrastructure fabric and an agile software capability to deliver those applications over those networks. >> All right well there's a lot to dig into yet. Let's start with NFV was the use case last year. Well 5G IOT definitely want to get into though but my understanding, I simplified it. NFV is just how the telcos can help deliver via software services they have. I mean think about how your set-top box, I can get channels and I can get certain programming. Is that kind of what you see, and how do they do their business model? >> Yeah traditionally, they bought appliances, hardware specific appliances. They put them in network operation centers and many thousands of those around the world. In the US there's tens of thousands of them. They're really moving more to a software based model where they don't necessarily need to buy a fixed appliance with its own silicone. They're going with commercial off-the-shelf x86 based technology and they're actually deploying that in what I call next generation data centers around Open Compute platform being an architecture, where you're looking at storage, compute, networking in a scalable fashion using open source technologies to deploy that in at massive scale. >> Very different from you think about like cloud might be a place where you have services run but the telcos are pushing services with their software out to their consumers. >> Yeah they're changing the core network infrastructure to support that and at the mobile edge in these network operation centers at the edge, they're making those more agile as well in order to push as many services out closely to the customer but also to aggregate content and data that their customers would acquire. So for example, you take a video clip on your phone, there's no point in storing that in the core of the network. You want to maybe store that at the edge, where maybe some of your friends would share it at that point in time, more efficient ways of drive that. >> I wonder if you can expand a little bit. That that term edge because we hear is that the edge of the network? Is that a mobile device? Is that a sensor for IOT in the telecom world? Is it all of the above? >> Well a lot of people use it is all the above but in the context I'm using it, it's at the edge of the network. It's not the device. That is a whole separate set of conversations, and things reach a very IOT-centric. At the moment, the telecommunications companies want to make the edge more efficient. They want to build clouds around the edge. They want to aggregate all those different clouds, and they want to build agile based infrastructure. So similarly to the way that Facebook, Amazon, Netflix, Google deliver their services today, they need to get into that space in order to be agile enough to develop and deploy their next generation of applications and services. >> So at this point OpenStack in its evolution with this customer vertical, it seems like we're not only talking about a cloud but maybe a cloud of clouds. >> Yes absolutely, I mean telcos again, they typically have one of everything. They are looking at decoupled solutions in terms of their network-based infrastructure. They want to be able to manage every layer of that infrastructure independently of the other layers in order to drive maximum flexibility and agility into their infrastructure but also so they don't get locked in to any one particular vendor. That's a big, big theme in the telco space. >> So you use the words agility and flexibility. So I in a previous lifetime, I did work with some telecom providers and they were not known for those words of agility and flexibility. We're in a world now with open source, with CICD, we talked about upgradability, a lot of the talk here at OpenStack is about manageability and flexibility and building, putting containers on top. Maybe we can go there next but do you, as you work with your customers and partners in the telecom space. It seems like they've had to have a cultural shift. I see a lot of people from the carriers here, right. They're as long haired and shaggy, and barefoot as any other engineer here at OpenStack summit. Has there been a real cultural shift inside telecom to accomplish this? >> Yeah, there's a real cultural shift that's ongoing. It's got a ways to go. The telcos themselves are engineeringly orientated. So they traditionally have come from an environment where we'll build it and customers will come. Now they're looking at we need to build it quicker and faster in order to attract customers, get them to come and view our services, get them addicted to a certain degree. Maybe the wrong word but to our content. So building sticky services, trying to reduce the churn they have in their business, driving innovation through open source because I think they've realized that innovation isn't necessarily within their own company. It sits elsewhere so which is the new Uber as it were? Which is new Airbnb? What is the new WhatsApp-based application? They want to create a network infrastructure that's flexible enough with all of those attributes through API so those companies can develop innovative next-generation content and services over their network infrastructure, in order to attract and make services sticky for their customers. >> Darrell, I wonder if you can speak to the complexity of the solutions in the telco space? Last year we spoke to Verizon, and they love what they have but they had to choose some glass, walk over some hot coals to be able to get the solution together. These are big complicated solutions. We've talked in general about OpenStack, and trying to simplify some of the complexity but can you speak to some of the how long it takes to roll these out and some of the effort involved for the telcos? >> Well it's it's sort of a walk, a cruel walk run process to a lot of that because A working with open source is very different than what they traditionally have done, and as you mentioned earlier, traditionally they'll buy an application through our appliance. They'll take nine months to deploy in all their centers. Then another three to six months later, they might switch it off. In the software agile world, they've got to condense that sort of 12 to 18 month period down to maybe three or four weeks. They may stand up a service for an event like the Olympics and then take it down after the Olympics. So there's a lot of complexity and change in the way that they need to deliver those services, and that complexity isn't trivial. So it involves delivering quality of service through the deployment of next generation network infrastructure because they are regulated companies. So they've got to maintain that quality of service in order to be able to bill, and meet the regulations that they they have to adhere to in the markets that they operate their network infrastructure. Very different from the Googles, the Facebooks of the world. They don't have that sort of regulation over their head. The telcos do so they have a level of discipline that they need to achieve in terms of availability of their network infrastructure, the availability of their services, the availability of their applications, and that links into a whole quality of service experience for their customers, and linked into their operation systems support, into their billing system and the list goes on, and on and on. So what we found at Red Hat is that, that is not trivial, that is hard, and a lot of the telcos are very engineeringly oriented. It's great working with them because they really understand the difficulties, and the fact that this is particularly hard. They also know that they want to build it and own it, and understand it themselves, because it's their business model. To them, the network is an asset. It's not something that they can just outsource to someone else, that doesn't necessarily understand that same degree of that asset. So they want to get their heads around that. >> So they need that reliability. From the eyes of a service provider how mature is OpenStack right now? Is it in production? Can they trust it? We're a few more than a few years into the OpenStack evolution so where are we in deployment? >> That, number of operators are in deployment. You mentioned one on a few months ago like Verizon. >> Stu: Yeah, AT&T is on stage. >> Absolutely, AT&T-- >> Deutsche Telekom, the headlines sponsored the event. >> Exactly, I mean, and what they're doing is they're starting very pragmatically. They're looking at specific services, and they're building slowly a service upon service upon service so they go from a crawl to walking, then to a run. I think, what we're seeing in OpenStack is not if but when these guys will deploy at mass scale. We're beginning now to see a general acceptance that this is a methodology and or a technology that they can deploy and will deploy in the NFE context. The other thing that's occurring in the space is they're looking at traditional IT workloads. So a telco-based cloud if you want to use that terminology is just as capable of running IT-based workloads and services as well. So a number of them are looking at their own enterprise and running those environments. Some of them are partnering with some of our partners to build OpenStack public cloud instances. So they want to try and attract services to that environment as well. >> It's interesting you point that out. There's been that ebbing flow of can the telco players be cloud as John pointed out. I worked in telecommunications back in the '90s. Agile and fast was not the thing of the day. One of the big companies who had bought a cloud company just sold off lots of their data centers. Do they feel that they're going to compete against the Amazon, Microsoft, Googles of the world? Do they think they'll be service providers? Where do they see is their natural fit in the cloud ecosystem? >> So my role is on a global basis. In North America, they don't want to, I don't think they feel they can compete in the way that you were intimating in that regard. However, where they do think they can compete and since we're going to probably talk about 5G and IOT, that is the area where they see public cloud applications and services being developed. So they're looking at the insurance industry, the automotive industry, the manufacturing industry, and creating an environment where those applications can be built to many many thousands of millions of devices connected to them. So I think the definition of in North America, of a public cloud infrastructure is going to evolve in that direction. In other markets such as Latin America and in Europe, some of the telecommunications companies believe that they can be competitive in that space. So more recently, Orange announced that they're working with OpenStack to deploy public cloud. Telefonica, Deutsche Telekom, China Mobile, America Movil, they're all using OpenStack to try and enter that specific market space. >> Okay, please talk to us about the 5G angles here. Obviously like Mobile World Congress, it was like be number one conversation. When we went to the Open Networking Summit, it was there. You're the first person to talk about it that I heard I didn't, maybe I missed it in one of the keynotes but you know none of our interviews has come out yet. So how does that fit into the OpenStack picture? >> So 5G is the reason why telcos are building NFEI, that they were NFE because they realize that to connect all of those devices to their network-based infrastructure, they need to do it intelligently, they need to do it at the edge, and they need to have a high degree of flexibility and agility to their network-based infrastructure to create an innovation environment for application developers to connect all those devices. So we talked about smart cars as a good example around 5G. You need low latency, you need the high availability, you need to be reliable, you need to provide all of that network infrastructure as an example plus you need a portfolio of developers that are going to create all sorts of different applications for those vehicles that we driving around on the street. So that without 5G, that does not happen. You're not, you know some metropolitan areas, the amount of connectivity that you have access to in terms of the traditional cloud-based access networking infrastructure doesn't facilitate the amount of density that 5G will actually facilitate. So you need to be able to change the basis in which you're building that infrastructure to lower the cost of the network in terms of being able to drive that. >> All right and I'm curious I think about the global reach we were just talking about. Usually, the global reach of a new technology like 5G lags a little bit in the rest of the world compared to Western Europe and North America. >> Well, I think in Asia, 5G is, if I look at what they're trying to do, the leading vendors ZTE, Samsung, Huawei, they're heavily invested in 5G-based infrastructure, and they don't have, their operators in those part of the world don't have an awful lot of legacy-based infrastructure to be able to have to replace. They can get there a lot faster. The other thing is with 5G, for them, the applications and services in the way that people experience network-based access or Internet if for want of another word is very different than way that maybe we experience it here in the US or in Europe. So I think you're going to see different applications and different business models evolve in different markets in Asia than you would say here in North America. In North America, I think that it's going to take a lot of the operators different business models to look at maybe some of the higher order of applications and services that drive stickiness for their own infrastructure and network services but also some of the more advanced applications like I mentioned smart cars or smart homes, or smart cities or energy or better ways of delivering products in terms of distribution to your home, those those types of applications and services we won't necessarily in some of those other markets be there and similarly for Europe. >> All right Darrell Jordan-Smith, really appreciate you joining us, giving us all the updates on telco, how it fits with OpenStack. Jon Troyer and I will be back with lots more coverage here from the OpenStack summit 2017 in Boston. You're watching The CUBE (upbeat music)

>> Announcer: Live from Santa Clara, California, it's The Cube. Covering open networking summit 2017. Brought to you by the Linux foundation. >> Welcome back. We are live in Santa Clara at the open networking summit 2017. Been coming here for a couple years, it's a lot of open source going on in storage, for a long time, a lot of open source going on in compute for a long time, and you know, networking was kind of the last one, but we had Martin Casado on on earlier today. He says it's 10 years since he started Nicira. And now, it's a billion dollar revenue run raid inside vmware, so I think the software defined networking is pretty real. We're excited for this next segment, Scott Raynovich, been cohosting all day, good to see you again, Scott. But we're kind of shifting, we're going to add to open networking, we're going to add to open, not compute, but OpenStack, I get them all mixed up, we were just-- >> It's all infrastructure, it's all in the family. >> All right, so our next guest here, representing the OpenStack foundation, is Ildiko Vancsa, get that right? She is the ecosystem technical lead for OpenStack, welcome. And Lisa-Marie Namphy, she's now officially the OpenStack ambassador, which if you follow her on Twitter, you would have known that a long time ago. >> For the U.S. There's several others globally, but for the U.S., yeah. >> So first off, welcome. >> Thank you. >> And what is the OpenStack team doing here at open networking summit? >> So OpenStack itself is a multipurpose generated cloud platform, so we are not just looking into enterprise, IT use cases, but also trying to address the telecom and NFV space. And this is the conference where we are finding many of our ecosystem member companies represented, and we are also learning what's new in the networking space, what are the challenges of tomorrow and how we can start to address them today. >> Right, 'cause the telco is a very active space for OpenStack as well, correct, there's been a good market segment for you. >> Yes, it is an emerging area. I would say we have more and more telecommunications company around and they are also more and more involved in open source. Because I think it's kind of clear that they are also using open source for a while now, but using open source and participating in open source, those are two different things. So this kind of mindset change and transition towards participating In these communities and going out to the public field and do software development there and collaborate with each other and the enterprise IT segment as well, this is what is happening today and it is really great to see it. >> Host: Great, great. >> And you've seen more and more telco's participating in the OpenStack summits, there was an NFV day, I think, even going all the way back to the Atlanta summit. And certainly, in Barcelona, Ildiko was actually doing one of the main stage key notes, which was very focused on telco. And some of the main sponsors of this upcoming summit are telco's. So there's definitely a nice energy between telco and OpenStack. >> Now, why do you think the telco is just the one that's kind of getting ahead of the curve in terms of the adoption? >> Scalable low class clouds. (all laugh) >> Right, and we had John Donovan from AT&T said today that they're either rapidly approaching or going to hit, very soon, more than 50% of software defined networking within the AT&T network. So if there's any questions as to whether it's real or still in POC's, I think that pretty much says it's in production and running. >> I'm doing a lot more of that, so I also run the OpenStack user group for the San Francisco bay area and have been for the last three years, and if we're not talking about Kupernetes, or Docker and OpenStack, we're talking about networking. And tonight, actually, we're going to, the open contrail team is talking about some of the stuff they're doing with open contrail and containers and sort of just to piggyback off of this conference. And next week, as well, we're talking about the network functionality in Kupernetes at OpenStack, if you want to run in down to the OpenStack cloud. So it's a huge focus and the user group can't get enough of it. >> and your guys' show is coming up very, very soon. >> The OpenStack summit? >> Yes. >> Oh, absolutely, May 8th through 11th in Boston, Massachusetts. >> Host: Like right around the corner. >> Yeah. >> The incredible moving show, right? It keeps going and going and going. >> Yeah, yeah, there's going to be 6,000 plus people there. There was just some recent press releases about some of the keynotes that are happening there. There's a huge focus on, you know, I keep calling this the year of the user, the year of OpenStack adoption. And we're really, throughout the meetups, we're really doing a lot to try to showcase those use cases. So Google will be one that's onstage talking about some really cool stuff they're doing with OpenStack, some machine learning, just really intelligent stuff they're working on, and that's going to be a great keynote that we're looking forward to. Harvard will be up on there, you know, not just big name foundation members, but a lot of use cases that you'll see presented. >> So why do you think this is the year, what's kind of the breakthrough that it is the year of the user, would you say? >> Well, I think that just the reliability of OpenStack. I think enterprises are getting more comfortable. There are very large clouds running on OpenStack, more in Asia and in Europe and Ildiko can probably talk about it, particularly some of the telco related ones. But you know, the adoption is there and you see more stability around there, more integration with other, I don't know what to call it, emerging technologies like containers, like AI, like IOT. So there's a big push there, but I think enterprises have just, they have adopted it. And there's more expertise out there. We've focused a lot on the administrators. There's the COA, the certified administrator of, you know, OpenStack administrator exam you can take. So the operators have come a long way and they're really helping the customers out there get OpenStack clouds up and running. So I just think, you know, it's seven years now, into it, right, so we got to turn the corner. >> So there have been some growing pains with OpenStack, so what can you tell us about the metrics today versus, say, three or four years ago in terms of total installations, maybe breakdown of telecom versus enterprise, what kind of metrics do you have you there? >> I'll let you take that one. >> We are running, continuously running a user survey and we are seeing growing numbers in the telecom area. I'm not prepared with the numbers from the top of my head, but we are definitely seeing more and more adoption in the telecom space like how you mentioned AT&T, they are one of the largest telecom operators onboard in the community, and they are also very active, showing a pretty great example of how to adopt the software and how to participate in the community to make the software more and more NFV ready and ready for the telecom use cases. We also have, as Lisa-Marie just mentioned, the China area and Asia are coming up as well, like we have China Mobile and China Telecom onboard as well. Or Huawei, so we have telecom operators and telecom vendors as well, around the community. And we are also collaborating with other communities, so like who you see around OPNFV, OpenDaylight, and so forth. We are collaborating with them to see how we can integrate OpenStack into a larger environment as part of the full NFV stack. If you look into the ETSI NFV architectural framework, OpenStack is on the infrastructure layer. The NFV infrastructure and virtual infrastructure manager components are covered with OpenStack services mostly. So you also need to look into, then, how you can run on top of the hardware that the telecom industry is expecting in a data center and how to onboard the virtual network functions on top of that, how to put D management and orchestration components on top of OpenStack, and how the integration works out. So we are collaborating with these communities and what is really exciting about the Upcoming summit is that we are transforming the event a little bit. So this time, it will not be purely OpenStack focused, but it will be more like an open infrastructure, even. We are running open source days, so we will have representation from the communities I mentioned and we will also have Kubernetes onboard, for example, to show how we are collaborating with the representatives of the container technologies. We will also have Cloud Foundry and a few more communities around, so it will be a pretty interesting event and we are just trying to show the big picture that how OpenStack and all these other components of this large ecosystem are operating together. And that is going to be a super cool part of the summit, so the summit is May 8th through 11th and on May 9th, the CNCF, the Linux foundation, actually, behind this, the CNCF day, they're calling it Kupernetes day. And the whole day will be dedicated, there will be a whole track dedicated to Kupernetes, basically. And so they did another call for papers and it's like a little mini conference inside the conference. So that's kind of what I was saying about the adoption of other technologies. I'm sure the OpenStack foundation is putting those numbers together that you asked about and probably Jonathan or Bryce will stand onstage on the first day and talk about them. But what I think is more interesting and what I would encourage people to go, there's a Superuser magazine. Superuser does a great job telling the stories of what's happening out there, and some of these use cases, and who's adopting this technology and what they're doing with it. And those stories are more interesting than just, you know, the numbers. Because you can do anything with numbers and statistics, but these actual user stories are really cool so I encourage readers to go out to Superuser magazine and check that out. >> It's like, Lego uses it. >> There you go. >> I had to check real fast. >> Lot of information on there. They do a good job of that. >> Lego alligators. >> So you talked about this day with the Linux foundation, is there increasing amounts of cooperation between OpenStack and Linux foundation? Given all the projects that seem to be blossoming. >> Yeah, I don't even know that it needed to increase, there's always been nice energy between the two. There is, you know, Eileen Evans, who we know very well, was on the board of both, the first woman on both boards. She was my colleague for many years at Hewlett-Packard. She's still on the Linux foundation board and there's been a lot of synergy between those foundations. They've always worked closely together, especially things like the Cloud Foundry foundation that came out of the Linux foundation has always worked very closely with OpenStack, the OpenStack foundation, and the board members, and it's all one big happy family. We're all open source, yeah. >> And you talked about the enterprises being, you know, they've been using open source for a long time, Linux has been around forever. They're really more adopting kind of an open source ethos in terms of their own contributions back and participating back in. So you see just increased adoption, really, of using the open source vehicle as a way to do better innovation, better product development, and to get involved, get back to their engineers to get involved in something beyond just their day job. >> It is definitely a tendency that is happening, so it's not just AT&T, like, I can mention, for example, NTT DoCoMo, who now has engineers working on OpenStack code. They are a large operator in Japan. And it is really not something, I think, that a few years back, they would've imagined that they will just participate in an open source community. I've been involved with OPNFV for, I think, two years now, or two and a half. I'm an OPNFV ambassador as well, I'm trying to focus on the cross-community collaboration. And OPNFV is an environment where you can find many telecom operators and vendors. And it was a really interesting journey to see them, how they get to know open source more and more and how they learned how this is working and how working in public is like and what the benefits are. And I remember when a few people from, for example, DoCoMo came to OPNFV and they were, like, a little bit more shy, just exploring what's happening. And then like a half year later when they started to do OpenStack contributions, they had code batches merged into OpenStack, they added new functionalities, they kind of became advocates of open source. And they were like telling everywhere that open source is the way to go and this is what everyone should be doing and why it is so great to collaborate with other operators out in the public so you can address the common pain points together, rather than everyone is working on it behind closed doors and trying to invent the same wheel at the same time, separately. >> Right. >> So that was a really, really Interesting journey. And I think more and more companies are following this example. And not just coming and giving feedback, but also more and more participating and doing coding documentation work in the community. >> And I think if I can understand, what I think, also, the question you might have been asking, there wasn't a ton of python developers in the beginning and everybody's like how do we get these OpenStack developers in the company, you know, it was this huge shortage. And Linux was the little hanging fruit, it's like well, why do we just hire some Linux developers and then teach them python, and that's how a lot of OpenStack knowledge came into companies. So that was the trend. And I think enough companies, enough enterprises do see the value of something like OpenStack or Linux or Kupernetes or whatever the project has, Docker, to actually dedicate enough full time employees to be doing just that for as long as it makes sense and then maybe it's another technology. But we saw that for years, right, with OpenStack, huge companies. And there still are. Not always the same companies, depending on what a company needs and where they are, they absolutely find value in contributing back to this community. >> Okay, and you said you got a meetup tonight? >> I do, yeah. >> Give a plug for the meetup. >> Juniper, it's open contrail talking about open contrailing and containers. And it's at Juniper here in Sunnyville, so if you go to meetup.com/openstack, that's our user group. We're the first ones, we got that one. So meetup.com/openstack is the Silicon Valley, San Francisco bay area user group. And then next week, we're talking about networking and Kupernetes. >> All right, it's always good to be above the fold, that's for sure. All right, Ildiko, Lisa-Marie, great to see you again and thanks for stopping by, and we'll see you in Boston, if not before. >> Absolutely, we'll both be quite busy, we have four, both four presentations each, it's going to be a nutty week. So I'm looking forward to seeing you guys in Boston, always a pleasure, thanks for inviting us. >> Absolutely, all right, thanks for stopping by. With Scott Raynovich, I'm Jeff Frick, you're watching The Cube from open networking summit 2017. We'll be back after this short break, thanks for watching.

(upbeat electronic music) >> Everyone, welcome to our special Mobile World Congress 2017 coverage. I'm John Furrier here in theCUBE for two days of wall-to-wall coverage. Monday and Tuesday, February 27th and 28th, and we have on the phone right now, Lynn Comp, who's the Senior Director of the Network Platforms Group within Intel, part of the team doing the whole network transformation. The big announcements that went out prior to Mobile World Congress and hitting the ground on Monday and Tuesday of all next week in Barcelona. Lynn, great to have you on the phone. Thanks for taking the time to walk through some of the big announcements. >> Lynn: Thanks, John, for having us. It's a really exciting Mobile World Congress. We're seeing more and more of the promise of the next generation networks starting to take solution form from ingredient form a couple years ago, so it's a great, great time to be in this business. >> So 5G is happening now. You're seeing it in the network and the cloud and at the client, that you guys use the word "client" but essentially, it's the people with their smartphones and devices, wearables, AIs, and now the client is now cars, and flying drones and potentially, whatever else is connected to the Internet as an Internet of things. This has been a really big moment and I think I want to take some time to kind of unpack with you some of the complexities and kind of what's going on under the hood because 4G to 5G is a huge step up in the announcement and capabilities, and it's not just another device. There's really unique intellectual property involved, there's more power, there's a market leadership in the ecosystem, and really is a new way for service providers to achieve profitability, and get those products that are trying to connect, that need more power, more bandwidth, more capabilities. Can you take a minute just to talk about the key announcements impacting Mobile World Congress from Intel's perspective this week in your area? >> Lynn: Yeah, so we had a group of announcements that came out. Everything from solutions labs where operators are invited in to work with Nokia and Intel starting out to start working through what does it mean to try and manage a network that includes unlicensed and licensed spectrum and all these different usage models, very different model for them, to Ericsson, an initiative with GE and Honeywell and Intel, that is in Innovator's Initiative, where companies are invited to come in in the ecosystem. An early start working through what does it mean to have this kind of network capability? If you think what happened, 2G, 3G, to 4G, you start looking at the iPhone, been around for 10 years, and you've seen how the uses have changed, and how application developers have come up with completely new ways of doing things, like, who would have thought about crowdsourcing traffic patterns for driving directions? We all wanted it years ago, but it was just recently that we were able to have that on a smartphone. They're trying to unleash that with pretty unique companies. I mean, GE and Honeywell, UC Berkeley, you wouldn't necessarily think of them as being first on innovating new usage models for a wireless network, but with something like 5G, with all of these diverse use cases, you end up with a completely different ecosystem, really wanting to come in early and take advantage of the potential that's there. >> Lynn, talk about this end-to-end store because one of the things that got hidden in all the news, and certainly SiliconANGLE covered it, as well as, there was a great article in Fortune about it, but kind of talk about more of the 5G versus Qualcomm, that was kind of the big story that, the battle of the chips, if you will, and the big 5G angle there, but there's more to it and one thing that caught my attention was this end-to-end architecture, and it wasn't just Intel. You guys are a big part of that as an ingredient, but it's not just Intel, and what does that mean, end-to-end, 'cause I can see the wireless pieces and overlaying connecting devices, but where's the end-to-end fit in? Can you give some color on that? >> Lynn: Absolutely. You know what's really fascinating is you've got Intel and we've been in the cloud and heard of the genesis of what would become the consumer and the enterprise cloud from the very start, and so what we've been doing in working in that end-to-end arena is taking things like virtualization, which has allowed these service providers and enterprises to slice up compute resources and instead of having something that's completely locked and dedicated on one workload, they can create slices of different applications that all sit on the same hardware and share it, and so if you look, years ago, many of the service providers, cloud and enterprise, they were looking at utilization rights as maybe 15% of the compute power of a server, and now, a lot of them are aiming for 75 to 85% utilization, and that's just a crazy amount of (mumbles) so bringing that to this market that in traditional, we had single purpose boxes, there's various detections for one thing, but that creates a business challenge if you need to do more than one thing, so really what we're showing, for example, at Mobile World Congress, it's something that we call FlexRAN, and it's an example of how to run a radio area network on a standard server on the technology, and it does implement that network slicing. Its's very similar to the virtualization and the compute slicing, but taking advantage of it to use different bandwidths and different rates for different scenarios, whether IoT or smartphones, or even connected cars. >> So I got to ask you about, the big question I get is, first of all, thanks for that, but the big question I get is, this isn't turning into an app show, we're Mobile World Congress, and apps are everything from cars to just phone apps to network apps, et cetera, and the question that everyone's asking is, we need more bandwidth, and certainly, 5G addresses that, but the service providers are saying, "Do we really need all that power? And "When is it coming?" "What's the timing of all this?" So, specific question to you is, Lynn, is what is Intel doing to accelerate the network transformation for the service providers to get 5G ready, 'cause that seems to be the main theme as the orientation of where the progress bar is relative to is it ready for primetime, is it here and now, is it out in the future, is this kind of a pre-announcement, so there's kind of some confusion. Clarify that up. Where's the progress bar and how is Intel accelerating network transformation for folks in the service provider vis-a-vis 5G-ready? >> Lynn: So there's a couple things. So let me start with the accelerating piece because it also relates to the end-to-end piece. When you look at the way that networks have been constructed all the way, end-to-end, it has traditionally been a very, very limited set of solution providers, and they tend to survive pretty granular, pretty high-granular functions, so the appliance, the full appliance, software, hardware, everything, and I would look at some of the smartphones up until you could put new applications on it, as appliances, it did voice, and so, we have this service provider begging us for many years, "Give us an ecosystem that looks like server and PC. "I want a building block ecosystem. "I want to be able to take advantage of fast and free wires "in software and hardware. "I need people to come innovate, "like they go innovate on Amazon," and so building an ecosystem, so Intel Network Builders is something that was started about three years ago, and we had, oh, half dozen to maybe 12 different vendors who were part of it, mostly software vendors. Since then, we have 250-plus number and they range from service providers like GT and Telefonica all the way to the hardware vendors like Cisco and Ericsson, and then the software vendors that you would expect. So that's one thing that we've been really working, for a few years now, on giving these operators building block approaches, supporting them in open source. We had a big announcement from AT&T, talking about how they're putting about seven millions lines of code into the Linux Foundation, and its code has been deployed in their network already, so pretty big departure from normal practice, and then today, we had an announcement that came out, where not only did AT&T and Bell Canada and Orange in that community. Now we've got China Mobile, China Telecom, and a project called Open-O, also joining forces. If you were to map out the topics for these operators, we've got almost all of the top ten. They are joining this project to completely change the way that they run their networks, and that translates into the kind of innovation, the kind of applications that consumers love, that they're already getting out of the cloud, now they can begin to get that piece of innovation and creativity in the network as well. So the building block approach seems to be your strategy for the ecosystem. What's the challenge to keep that rolling and cohesive? How are you guys going to foster that growth on the ecosystem? You guys going to be doing a lot of joint marketing, funding, projects, and (chuckles) how are you going to foster that continuing growth? >> Lynn: Well there's a couple, it's such an opportunity-rich environment right now. Even things that you would assume would be normal and kind of standard practice, like standardized benchmarking, because you want apples-to-apples performance comparison. Well that's something that this industry really hasn't had. We've done very conceptualized testing, so we're working with the operators in a project called OPNSG to make sure that the operators have a uniform way, even if it's synthetic benchmark, but they at least understand this synthetic benchmark has this kind of performance, so they start really being able to translate and have the vendors do comparisons on paper, and they can actually do better comparisons without having to do six months of testing, so that's a really big deal. The other thing that I do want to also say about 5G is we're in a pre-standards world right now. ITU and 3GPP will have standards dropped in 2018 and 2020 is when it will be final, but every time that you're looking at a new wireless standard, there's a lot of pretrials that are happening, and that's because you want to test before you state everything has to work a specific way, so there was a trial just announced in December, with Erisson, AT&T in Austin, Texas in the Intel offices, and so if you happen to be in that office, you're starting to be able to experiment with what you could possibly get out of 5G. You'll see more of that with the Olympics in 2018 and 2020, where you've got, Japan and Korea have said we're going to have 5G at those Olympics. >> So I got to ask you some of the questions that we are going to have some guests on here in theCUBE in the Palo Alto coverage around NFV, network function virtualization, plays right into the software-defined networking virtualization world, so why is NFV and SDN so vital to the network transformation? Why now and what's happening in those two areas, and what's the enabler? >> Lynn: The enabler really started about 10 years ago, the real inspiration for it, when we were all in a world of packet processing engines and network processors, and we had some people in our research labs that realized that a lot of the efficiency in doing packet processing quickly came from parallelism, and we knew there were about two or three years to wait, but that was when multi-core came out, and so this thing called data plane development kit was born. We've referred to it as DPDK. It's now an industry organization, not an Intel invention anymore. The industry's starting to foster it. Now is really when the operators realized, "I can run a network on a general purpose processor." (coughs) Excuse me, so they can use cores for running operating systems and applications, of course, they always do that for compute cores, but they can also use the compute cores for passing packets back and forth. The line rates that we're getting are astonishing. 160 gigabits per second, which at the time, we were getting six million packets per second. Very unimpressive 10 years ago, but now, for many of those applications, we're at line rate, so that allows you to then separate the hardware and the software, which is where virtualization comes in, and when you do that, you aren't actually embedding software and hardware together in creating an appliance that, if you needed to do a software update, you might as well update the hardware, too, 'cause there's absolutely no new software load that can happen unless you're in an environment with virtualization or something like containers. So that's why NFV, network function virtualization is important. Gives the operator the ability to use general purpose processors for more than one thing, and have the ability to have future proofing of workloads where a new application or a new use becomes really popular, you don't have to issue new hardware, they just need to spin up the new virtual machine and be able to put function in it. >> So that, I got-- >> Lynn: If you went back and, we were talking about 5G and all of this new way of managing the network, now management in orchestration, it's really important but SDN is also really critical, both for cloud and for comm, because it gives you one map of the connections on the network, so you know what is connected where, and it gives you the ability to remotely change how the servers or how the hardware is connected together. If you were going to ask the CIO, "What's your biggest problem today?" they would tell you that it's almost impossible for them to be able to spin up a fully functional, new application that meets all the security protocols because they don't have a network map of everything that's connected to everything. They don't really have an easy way to be able to issue a command and then have all of the reconfigurations happen. A lot of the information's embedded in router tables. >> Yeah. >> Lynn: So it makes it very, very hard to take advantage of a really complicated network connection map, and be agile. That's where SDN comes in. It just kind of like a command control center, whereas NFV gives them the ability to have agility and spin up new functions very quickly. >> Yeah, and certainly that's where the good security part of the action is. Lynn, I want to get your final thoughts on the final question is this Mobile World Congress, it really encapsulates years and years in the industry of kind of a tipping point, and this is kind of my observation, and I want to get your thoughts on this and reaction to it, is the telcos and the service providers are finally at a moment where there's been so much pressure on the business model. We heard this, you can go on back many, many years ago, "Oh, over the top, " and you're starting to see more and more pressure. This seems to be the year that people have a focus on seeing a straight and narrow set of solutions, building blocks and a ecosystem that poised to go to the next level, where there can be a business model that actually can scale, whether it's scaling the edge, or having the core of the network work well, and up and down the stack. Can you talk about the key challenges that these service providers have to do to address that key profitability equation that being a sustainable entity rather than being the pipes? >> Lynn: Well it comes down to being able to respond to the needs of the user. I will refer to a couple demos that we have in the data center section of our booth, and one of them is so impressive to China Telecom that have put together on complete commercial off-the-shelf hardware that a cloud vendor might use. A demo that shows 4K video running from a virtualized, fixed wireline connection, so one of the cable kind of usage. Now 4K video goes over a virtualized environment from a cable-like environment, to what we call virtual INF, and that's the way that you get different messages passed between different kinds of systems. So INF is wireless, so they've got 4K video from cable out to a wireless capability, running in a virtualized environment at performance in hardware that can be used in the cloud, it could be used in communication service providers 'cause it's general purpose. That kind of capability gives a company like China Telecom the flexibility they need, so with 5G, it's the usage model for 5G that's most important. Turns out to be fixed wireless, because it's so expensive for them to deploy in fiber, well, they have the ability to do it and they can spin it up, maybe not in real time, but certainly, it's not going to take a three-month rollout. >> Yes, and-- >> Lynn: So hopefully, that gives you one example. >> Well that's great enablement 'cause in a lot of execution, well, I thought it gave me one more idea for a question, so since I have my final, final question for you is, what are you most excited about 'cause you sounded super excited with that demo. What other exciting things are happening in the Intel demo area from Intel that's exciting for you, that you could share with the folks listening and watching? >> Lynn: So, I used to never be a believer in augmented reality. (John chuckling) I thought, who's going to walk around with goggles, it's just silly, (coughs) it seemed to me like a toy and maybe I shouldn't admit that on a radio show but I became a believer, and I started to really understand how powerful it could be when Pokemon Go took over all the world in over the summer, to this, an immersive experience, and it's sort of reality, but you're interacting with a brand, or in the booth, we have a really cool virtual reality demo and it was with Nokia next and it's showing 5G network transformation. The thing about virtual reality, we have to really have low latency for it to feel real, quote-unquote, and so, it harnesses the power that we can see just emerging with 5G, and then we get this really great immersive experience, so that, I think, is one that innovate how popular brands like Disney or Disney World or Disneyland, that immersive experience, so I think we're just starting to scratch the surface on the opportunities there. >> Lynn, thanks so much for spending the time. Know you got to go and run. Thanks so much for the commentary. We are low latency here inside theCUBE, bringing you all the action. It's a good title for a show, low latency. Really fast, bringing all the action. Lynn, thanks so much for sharing the color and congratulations on your success at Mobile World Congress and looking forward to getting more post-show, post-mortem after the event's over. Thanks for taking the time. We'll be back with more coverage of Mobile World Congress for a special CUBE live in studio in Palo Alto, covering all the action in Barcelona on Monday and Tuesday, 27th and 28th. I'm John Furrier. Wrap it with more after this short break, thanks for watching. (upbeat electronic music) (bright electronic music)