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

>>Okay, welcome back to the cubes coverage of Del tech world. I'm john for your host of the cube we're here for virtual coverage were not yet face to face as we start to come out of covert, we're still doing the remote but we got the cube virtual. We're here with Dennis Hoffman, senior Vice President, General Manager for the telecom Systems business group within Dell Technologies dead. It's great to see you. Thanks for coming in CUba alumni. Thanks for coming on. >>My pleasure, john great to see you and look forward to the days when we can stop doing this virtually. >>Well, you guys have been certainly pumping out a lot of content and right now telco cloud telco disruption is big. We heard Michael Dell last event and even when we were in person in real life, we he was really laying down the five G leadership now with hybrid cloud, um, standardized, pretty much I mean, consensus is no, no debate really. It's hybrid multi cloud on the horizon. That's still just a subsystem of basically distributed computing A. K. A hybrid cloud makes the edge a huge part of the story this year. And the innovations all around telecom, Edge in five G have been around and they're changing really fast. What's how are these Edge in five G technologies impacting the market today? >>Yeah, it's uh is fascinating times, I'll tell you they are providing really the ultimate carrots, you know, the catalyst for um innovation in the market and really driving the world's network operators To uh want to take advantage of all the opportunity that the edge presents and that 5G enables. And it's, you know, at the end of the day, it's really forcing folks to think hard about if they have the right network architectures to enable that to capture that opportunity to have the right kind of capabilities. And so we're seeing an awful lot of interest in network desegregation, network modernization, various forms of adopting the technology is you and I are familiar with from years of what's going on in data center evolution are really starting to hit the telco network now at a really, really interesting time >>while we're on the landscape. Do you want to get your opinion on something? I've been hearing a lot, certainly in interviewing other folks here at Dell tech world and in the industry about how the edge and the data compute equation and the connectivity has changed how they're going to lay out essentially their factory, their plants, their operations and certainly covid pushing everyone at home has changed the game on how data is being computed on and how apps are being built. This is a huge five G opportunity certainly when you start to get into the business impact, autonomous vehicles, I've been doing stories about autonomous boats and everything we could have an autonomous cube soon. So, you know, everything is autonomous which drives to this whole edge piece, What's your take on that? >>Yeah, you know, it's, it's funny for years we've been talking about on prem and off prem, like there's two problems there turns out there's a third Prem, right? There is the other premises and that is not the private data center and not the public cloud. And when you stop and think about it, it it makes sense because at the end of the day, wherever we can get data, we can create digital advantage and it's always been cheaper and more effective and faster to move compute to data than to move data to compute. So technology is like 5G are beginning to make it possible to run very interesting applications in very different places and capture what is predicted to be some 3/4 of the data created over the next decade is going to get created somewhere other than a private data center or a public cloud. And that's the edge, you know, in telcos, look at that third premises as their opportunity to get another bite of the apple on services. Four G was kind of a story of the over the top. Players really took the profit pool and made a lot of money from the over to the netflix is to the itunes and so on and so forth. But when you come back to Five G and think of it kind of as the Enterprise G, it's a chance now for the world's network operators to really get a chunk of that profit pool that comes from the emergence of this third premises called the edge >>Enterprise G. I love that, I'm gonna steal that from you. It's a great, great uh >>somebody else >>uh Yeah, the new trend, but it's a business, it's a business opportunity again, totally cool. And consumers to um okay, so you got your out on the road a lot. I know that we've talked in the past on the cube. There's a lot of discussions in the industry, as well as customers that you're having. What are you hearing? What are the some of the pain points are, see Covid has unveiled unveiled new use cases, people had had adapted to it. There's adaptations that are out there that are new and then things that might not happen again. What are you hearing from customers? >>Yeah, I would say in summary, we're hearing a mix of optimism and uncertainty, optimism around all the stuff we just talked about and that you mentioned, you know, it's it's a blank from anywhere. World right work from anywhere, learn from anywhere. Medicine from anywhere. And you know, if the pandemic has taught us anything, it's about the absolute necessity of communications technology to the world we live in today. The uncertainty comes from this question of, okay, so I know that there's this big opportunity and I know that I need to modernize my network architecture and kind of change the way I operate to capture it all. But the architecture is I run on today, make that really hard. And the architecture is that that the modern data center is built on, We know they work. But how do I get them in a way that allows me to build a resilient, high performance agile communications network. Um, you know, today we uh we face a world in which we see, we have a world in which solutions are delivered very fairly monolithically in the network uh for network operators but going forward, the power to potentially decompose all of that is wonderful provided it can be recomposed in a way they can consume. And I think that's where the uncertainty lies. There's a lot of testing and trialing of pieces of applications of underlying hardware, infrastructure, servers, accelerators, um certainly different types of virtualization and container ization technologies. But in the end these networks need to run it many many many nines um and they need to be extremely robust and pulling together a lot of different components from the open ecosystem is a daunting challenge for most of the network operators. >>You know, I hear you saying about the opportunity recognition and the re factoring how we called re composing this opportunity here and again. I like this enterprise G angle because what it means is that it's not the consumer the only it's it's everything. It's a complete consumer ization of I. T. So it's a whole another edge landscape. Prem third, the third premise is the edge. All good. I've always so set on the cube and certainly Dave and I have David and I have riffed on this is that you know, everything is now cloud operations and the data center is a big edge and then you've got other pieces that are just edges. A distributed system kind of sounds like a computer in the cloud. So this is kind of operating model. So I have to ask the question which is in telco, if it's gonna be distributed like that and it's going to be operated at scale, how is Dell responding to capture the mind share and customers using Dell in this new telco disruption? Because it's kind of you got to keep the lights on and you gotta also get them in a position to take advantage of the new opportunity. How are you responding? >>Yeah, Well, we're trying to we're literally trying to fill that gap, you know, the talking to the world's uh modern or say the world's telecom network operations leaders. We've uh we've had a lot of conversations with folks about what they need to do and what's holding them back from really in many ways taking advantage of the digital transformation that that's kind of rippling through the economy. And as they kind of laid that out to us, we decided that it was an enormous opportunity for Dell that this this uh you know, this new network will be fundamentally built on computer technology uh and it will be open industry standard computer technology. And on top of that we will use virtualization. And if this begins to sound like the way data centers are being built, because that's exactly what's happening. But more than that, I think there's a need for an at scale substantial provider that the world's biggest carriers can bet on and feel they can trust as a strategic partner to not only pull the ecosystem together, validated, certified, curated a little bit uh, and deliver it as an outcome, but then stand behind it running and importantly, do all of that in a way that doesn't constrain the continuous innovation. That's really the hallmark of some of these modern architecture. So for us, we see, you know, an opportunity that is literally perfectly built for a company like dealt and that's why we decided to invest in it. That's why you hear Michael talking about it a lot. Uh it's um, you know, it's it's really super well aligned with our strategy, we think it's actually key to winning the edge. Uh and and it's also really well aligned with our purpose, you know what this company exists to accelerate human progress through technology. And this little slice of it is all about accelerating communications and the transformation of modern networks to do exactly that right, To help close the digital divide, to bring fair and equitable medicine and learning to all, um and to allow us all to work from wherever we're working. So it's uh it's something that we're excited about on multiple levels and we think the company is really built for the distributed computing environment that a modern telco network represents. >>Yeah, what's interesting is that the value that you guys can enable at the edge, his real impact, It's not just data center and compute and have applications. Remember the old days I got my crm in my E. R. P and I got my apps on my systems and it's all good now. Business is completely software enables, it's the entire business and the business is software naval, which means that you have to have that edge. So I totally love of the positioning and strategy. I have to ask you if you don't mind, where is the residents with customers when you look at the telco enablement there that you're enabling them to do what's resonating the most, what's jumping out from the telescopes in terms of what Dell's doing for them And the customers, you mentioned tele medicine, which by the way, is an amazing impact to the world. Just one example. But where's the residence? >>Yeah. You know, first we we are what we are. Right. So it's, I think with a lot of conversations, it begins with, um, the telecommunications network needs server technology, but it needs very specific kinds of server technology built in very specific ways. Um, the, you know, the needs of compute at the base of a cell tower on a hill in Montana in the middle of winter are different than we've been building for data centers for years. So I think the first thing that resonates it, I need it, I need a very specific kind of open compute, uh, infrastructure hardware foundation that is industry standard. And, and we turn to somebody like Delta do do exactly that. But what we've learned is there's so much more than that because really we need to begin to deliver outcomes on top of that foundation. Uh, First outcome, we need to deliver his modern operations and maintenance of a distributed network. Zero touch provisioning, zero touch upgrading. How can we impact the total cost of maintenance and ownership in a meaningful way, um, for a network that is in fact constructed out of a fabric of server. On top of that there's the actual network core network services, Edge, the radio access network. And how do we successively open up each section of the network, driving computing storage all the way to the edge? Because for many organizations in the world, many enterprises, their edge will actually be on the telco premises. Right. The telco edge will be their edge. Some of the bigger companies certainly can build their own. But as you get in the world of medium and small business, the person they buy their circuits from and their communications from. If they have the ability to deliver them private slices of networks and virtual compute and storage, that's going to be how they get after it. So you know for us that next piece that resonates is the ability to pull together solutions like we've been doing for years with the ex rail hyper converged the stuff we did with the C. E. Back in the day and then last >>I'm just saying that you know you're bringing up things that kind of sound. It's super complex physical plant and equipment. You're talking about real hard and purpose built devices in the past very operational technology oriented stuff and then that has to have I. T. Agility right? And then have scalability behind it and complete you know integration this is not obvious and easy. It's hard. >>Yeah. No I mean software doesn't run on software right? Software runs on hardware and so as much as a lot of the power and the interest comes from what the application can do underlying it all is a capability to distribute, compute and storage to where the application or the software wants to run or runs best. That's what's really cool about five G is its ability to do the stuff you mentioned earlier on, you know, the, the G Wiz stuff, drones and autonomous and a AR and VR and all the things that ultra reliable, low latency communication would make possible on a grand scale that really bring the machines into the picture, not just humans on the edge. It's the stuff, right? That that's on the edge and we've been talking about it for a long time, but none of it's gonna matter if we don't put this infrastructure foundation in place. Then we got to lay an open marketplace of containerized network functions. Virtualized network functions on top of that all to enable our network operators to deliver interesting services to end users. It's >>super exciting. I got to say that it's a super exciting because you know, it's coming it's like the energies there, it's like the, you know, the storm's coming of disruption in the innovation because you think about what containers and cloud native kubernetes the cloud native technologies can do for legacy because its shelf life and more headroom, right? So you can you can win these telcos can actually not only pivot but line extension into new capabilities. So they tend to be very strong technically is an operator, operator networks, the hard tech stuff, physical stuff and software but not known for it. I mean but now there's a huge opportunity that's gonna come around the corner. I'm bullish on Iot and edge where you have the O. T. And I. T. Coming together. It's really compelling And it's going to be radically different I think in the next 5 to 10 years what's your take on that in terms of outlook? >>Couldn't agree more. Yeah I mean it's you know it's for those of us are in the industry always the knowledge of what's coming or the belief in what's coming. The hype precedes the actual development. But you know just as I don't know 15 20 years ago the idea that you can completely disrupt the taxi industry with an app and a four G smartphone service was in nobody's mind except maybe a couple of people. You >>know it >>makes you wonder what is the what is the uber equivalent of a business service that will be fundamentally enabled by the architecture we just described that we're not thinking about right now and that's why every time we move from a centralized computing model to a decentralized computing models that decentralized computing models dramatically larger than a centralized, >>way >>bigger than mainframe. Edge, way bigger than client server, which is already way bigger than cloud, Public. Cloud. And so I think it's, you know, there's a, there's a lot of promise, a lot of excitement. Still a long way to go though. A lot of the stuff we're talking about still is not actually rolled out into the network. Um and that's kind of the opportunity for somebody like them. >>Yeah. And decentralized and open winds. It's funny you mentioned high, we were talking David was just talking with Michael Dell and Pat Gelsinger in 2013. We're talking hybrid cloud, that's 78 years ago. Okay, so good stuff. Let's get into the news real quick. Um Deltek World, you've got some news coming. Uh Let's dig into it. Please share some of the outlook of the news. You're gonna be you're you're announcing here? >>Yeah, thanks. Sure, john, I mean, we're gonna be announcing two things relative to the telecom portfolio. Uh and they're both reference architectures with VM ware. One is the second edition of the telco cloud platform for five G. Um, so that's a Delvian where reference architecture, that is exactly what we just talked about. It's this open software defined on industry standard hardware platform, um for running 5G applications. And then the other one is the first version of the telco cloud platform for the radio access network, TCP ran as we would call it. Um and as we start to push this technology from the core out towards the edge of the telecom network. So to really interesting developments in in deep partnership with VM ware and stuff, we've been working on for a while stuff, we are in fact working on with customers and delivering today and we'll be making formal announcements about those at the D T W show. >>Awesome. Dennis, thanks for coming on the Cuban, sharing the update and thanks for the industry insight. Uh, I love the telco shift that's going on. It's an extension of existing, I think cloud native saves the day here with telco and allows the completely different landscape to evolve. So you guys were on top of it. Thanks for sharing S VP and general manager, the telecom systems business with Dell Dennis. Hoffman. Thanks for coming on. >>Thanks john Okay >>cube coverage here. Del Tech world. I'm john for a year. Thanks for watching. Yeah.

>> Announcer: From around the globe, it's theCUBE with digital coverage of Dell Technologies World Digital Experience, brought to you by Dell Technologies. >> Hello everyone and welcome back to theCUBE's continuing coverage of Dell Tech World 2020. This is Dave Volante and with me is Dennis Hoffman. He's a senior vice president and general manager for telecom systems business at Dell Technologies. Good to see you Dennis. Welcome. >> Thanks Dave. Great to be here. >> So let's talk a little bit about corporate strategy, which is your wheelhouse. I'm curious, has the pandemic at all altered your thinking on Dell strategy? >> Interestingly enough it hasn't. I suppose it would be standard for me to say that, but if anything, it's just given us both a sense of the challenge of what we had to do as a company to keep doing business. But also it's been really illuminating because it's given us a glimpse of the future. And fortunately, I think we've been pretty well prepared for what's happening. >> Well, I think in a way there's a bias inside of Dell because you guys were probably more work from home than the average company and you, in a way, might've been more prepared for this and maybe your thinking was already headed in that direction. What do you think about that? >> No, I think it's a reasonable thesis. The company is very much a work-from-home oriented or mobile in terms of where we work, an overall, I guess, hypothesis that work's something you do, it's not a place. But we also had a portfolio that benefited from the pandemic and an overarching strategy that was really to help our customers transform digitally. And if anything, the pandemic's accelerated all of that. So again, not without its challenges. And I certainly feel for the folks who get an awful lot of their energy from working with people every day because that's what's missing for an awful lot of folks who are doing an awful lot of what you and I are doing here. But otherwise I think we were biased toward it and it worked out pretty well so far. >> Okay. So it hasn't changed your strategy, but I would imagine some of your assumptions have changed. I mean, obviously more people are going to be working from home now, probably at least double. If it was 15 to 20% pre-COVID, it's going to be, let's call it 30, 35, maybe even 40% post-COVID. Maybe it's going to take a while, six, nine months to get there. But I would imagine some of your assumptions have changed. Is that a fair statement? >> Yeah, I think ours and the industries at large. Most companies' business continuity plans really centered around natural disasters. In most of those plans, 30% of the population working remotely was the high watermark. Right now, we're seeing whole industries redoing their business continuity plans, factoring in 60, 70% bogeys for how many people or what percentage of their population would work from home. As we surveyed our employees, 90% of people said we be either some form of hybrid work experience or completely remote. So, again, if we're for a bit of a leading edge on this, we're probably going to be tilted even more toward it, but there's been a big change in assumption about what remote work looks like and what you've got to do to make it productive. >> So we're a decade and a half into the cloud or at least the modern cloud era. What's your take on where the industry is today and how it affects your business and your cloud strategy broadly? >> Yeah, it's a fascinating. We're in the midst of an ever accelerating set of cycles or pendulum swings from centralized computing to decentralized computing back to centralized. We went from the mainframe era to the client server era and then even quicker to the cloud era. And now we're seeing the emergence of the edge. The one thing that's constant through all of this is workloads are like water. They seek their ground. Workloads have characteristics. They need performance, economics, security, data gravity. And so we've been firm believers through this whole time that a certain amount of workload's going to end up in a very centralized model. Some is going to end up very decentralized and our job is just to enable our customers to put the workloads where they need to run best. So as you point out, we're quite a ways into the cloud era now. It looks like the edge era is emerging. I like to think of it as really three legs of a stool. You've got work can run in a private data center, it can run in a public data center or it can run everywhere else. And increasingly, everywhere else is being called the Edge, all of it by the way, in a cloud operating model. So big distinction between cloud, the model and cloud, the place. And so in many ways, we talked specifically to certain vertical markets, the cloud era is already beginning to give way to the beginning of the Edge era. >> Well, and at the same time too, you're seeing the hyperscalers recognizing the need for whatever it is, for economics, for legal reasons, for preference or latency moving on-prem. >> Right. >> And so I was having an interesting discussion with the CIO the other day and I asked them, "Well, what what do you look at as cloud? "Cloud is everywhere. "I got my cloud on-prem. "I got my multiple clouds, which is clear. "Everybody's going multicloud." And then he happened to have 17,000 stores that he was looking after. He goes, that's Edge to me. That's all part of my cloud. And now of course, part of your role is telco. So let's talk about that space. You've got the over-the-top providers. They're sucking off the infrastructure that have been built out by the telcos. Cost per bid is coming down. Data uses is exploding. And the telco industry really has to transform its infrastructure. They're not agile enough and they can't wait to get to this new era of 5G. So I'm interested in your thoughts on that, how you see Dell helping. >> Well, as I'll tell you, you characterize it right on. I've in the last several months, spend a lot of time with telecom executives all over the world because of how easy it is to do this sort of thing. And they need to transform. The digital transformation sweeping the rest of the world has caught up with telecom and for a whole bunch of reasons. And some of those you pointed out, right, agility, cost, economics. They're in a funny place. Never has the demand for communication services been greater. And yet never have their financial positions been more challenged. Because they're stuck between an old, fairly proprietary, closed architecture and a handful of vendors and on the other hand, embracing this cloud computing data era where there's thousands of vendors. And they somehow all need to be cobbled together into an open software-defined system that runs on industry standard hardware. And yet most telecoms aren't prepared to do that integration themselves. So for us, we see immense opportunity. It's literally as if a massive 100 billion dollar plus addressable market has effectively decided they need to start buying the kinds of things we've been making for years. And moreover, they are by definition, fundamentally a distributed model. The big difference, I think, between Dell Technologies and a hyperscaler is we as a company we're built in and for a distributed computing world. We deal with very mundane topics like how do you get a person onsite within an hour? And how many spares depots do you have? And all of those sorts of things. Whereas hyperscalers were built for the exact opposite. A world in which they said, "Hey, give me your data, "give me your workloads. "I'll think hard about it. "And I'll give you a very flexible economic model." The Edge puts all of that up in the air and telcos's the leading part of this Edge, right? They're the ones that own a great deal of the Edge. And as you pointed out, 5G is really the thing that's got everybody excited. >> Well, you bring up a good point about the hyperscalers. I mean, their challenge now is they go on-premise. Okay. How do you service and support those customers at scale 'cause everything they do is at scale, it's all highly automated. So that's interesting. At the same time, I wonder you're a strategy guy. You look at what Amazon retail does. They're putting up warehouses everywhere. They're putting points of presence. I wonder if there are analogs to the technology business. It's probably more complicated, right, 'cause you're not servicing, you're just delivering. >> But I think you're right on. There's analogs. Look, we all are what we are as vendors. We all have our business models. Ours is to sell equipment and software and services to somebody. Amazon, since its founding, has really been about how do I insert myself in a transaction and ease that transaction and take a slice? Google's been about democratizing and monetizing the world's data. So Amazon needs access to transactions. Google needs access to the world's data, all the hyperscalers want into telco because they want onto the Edge. The same point you made about on-premises, right, like Outpost or Azure Stack. It's fundamentally admission by a hyperscaler that, "Yeah, I guess all workload doesn't belong "in the public cloud. "It's not all going to end up here." And I think they've got the same challenge when it comes to the Edge. And so people are trying to build their way out 'cause they need connectivity to the Edge. For us, we know that telecoms have to become multi clouds. You've referenced earlier the over-the-top profit problem. Well, they lost the profits from the consumer. B2C, they built the networks, they ran the networks and everybody else took the profit. So now here comes 5G with the promise of business services, real B2B revenue opportunities for telecom. And once again, they're faced with a choice. Either they become the cloud operator and allow the hyperscalers in as part of their multi-cloud or they give up the cloud to the hyperscalers and there go the over-the-top profits again. So it really, I found, a fascinating set of dynamics and an industry that can really use the help of somebody like Dell Technologies. >> Well, that's interesting 'cause as is many markets, consumer leads and then B2B markets open up. Well, how do you think this plays out? I mean, the telcos have very specialized hardware. They got this hardened and fossilized infrastructure. So where do you guys fit in that transformation and how do you see it evolving? >> Well, it's already started in a way, it's from the inside out. So telecommunications companies, as I look at them, as we look at them, they're almost like three companies in one. They have conventional IT organizations that in many ways look no different than a bank. They have their businesses, of course, the network where they spend the vast majority of their money, but it's not homogenous. There's a network core, there's a network Edge and then there's an access network. And then most of them, of course, sell services, business services. So they have lines of business. So we look at them as an IT organization, through the CIO, as a massive network operator through the CTO and then as a business partner, some of whom are even in our channel program and their cloud, their cloud services partners. And that's all through their line of business. So they're starting to open up from the inside out. Data center's going through transformation. It's begun in the network core. Now, the Edge is the next thing. And the RAN, in case of mobile operator, the radio access network, will ultimately come. And so you're right. There's a fossilized infrastructure in some places, but we've already seen the core start to desegregate and it will now ripple all the way out to their Edge and I think frankly through it and right onto the enterprise premise with private mobility. >> And so do you see them taking that infrastructure model all the way out to the Edge and trying to replicate essentially their what would've been monopolies for years or do you see them... It sounds like it's going to be a mix. Some of them are actually maybe going to lean on the hyperscalers and try to become more over-the-top content providers. >> Well, I think two challenges in business right? I guess they say there's three great motivators in business in life, make money, save money, stay out of jail, like revenue, cost and risk. They got a cost problem. They've got to get off the monolithic closed infrastructure architectures. They've got a revenue problem that a lot of the additional revenues and services went to somebody else, the OTT, the over-the-top folks. And so I think you will absolutely see a mix, but nobody can afford. No telecom communications company can afford to simply hand their network over. Unless they've reconciled, I'm just going to be a dumb pipe again, right? And none of them want that. >> Right. = But I think in many ways, they're waiting for somebody to walk in and say, "But here's the answer." And I can tell you that at Dell Technologies, and by that, I mean both within Dell and certainly within VMware, we're very strong proponents of the notion of an open software-defined network architecture built on industry standard hardware. And we're pretty well positioned, I think, to provide it or certainly that's the hope and the thesis behind our business. >> Yeah. So that then allows them to compete much more effectively, to provide, like you say, new B2B services, but it really is their infrastructure has been the big blocker up until recently. And you're right. I mean, network function virtualization has started to see through. We've seen some of the benefits of that and then now they've got to take it to the next level, your point about the Edge. >> Well in the 5G standard or 5G, the next cellular technology generation is actually defined by the three GPP standards. Release 15 was the first one that came out and it specified both standalone 5G networks where you can get all of these benefits and non-standalone where you basically have to mix 5G into the core, rely on the 4G Edge. And that's the only thing that's been deployed so far. So as in many things, the hype leads the reality by a little bit. So we've been talking 5G for a while, but the release 16 that would get you some of the really hyped up features of 5G just released this year. So it's coming and there's a lot of talk about it right now. There's a race to have the largest 5G network in America and the largest 5G network in the UK and so on and so forth. But this isn't really the true power of 5G. That window is still open and it's coming. >> You do a lot of strategy work. You obviously see the opportunity Edge, the term is just enormous. So you got to be wetting your chops at that. At the same time, the requirements are totally different. So I'm curious as to how you, as a strategy expert, dovetail into the architectural decisions that have to be made and the connective tissue between strategy and architecture and actually the whole go-to market, that whole value chain that you think about, how are you thinking about that in the world of Edge? >> Well there's, at the end of the day, two strategy decisions you got to make, where do I play and if I decide to play there, how do I win? So where do you play on the Edge is a very interesting question. Anytime there's a new computing paradigm shift, you go from something that's been pretty stable and frankly pretty horizontal and it becomes pretty verticalized. So the Edge is thousands of things right now. And it's many highly verticalized use cases, manufacturing, mining, retail, even something as simple as campus wifi replacement. So you've got to pick your spot. And for a company of our size, that really comes down to thinking about which of these Edge use cases are going to pop first, which one's going to teach you the most, which one's going to have the right level of scale. And this is where telco and Edge intersect because it turns out one big and easily reachable use case for Edge is to partner strongly with the telecommunications industry where something like 30 companies in the world make up 80% of the capital spending. I mean, you don't have to run a Superbowl ad. You can get all of your customers in a bus, right. So that's why I think there's really this somewhat silent, somewhat subtle and somewhat not so subtle competition for the architecture of the telecom industry as it refreshes, both because of 5G as an inflection point, but also just because of the stuff we talked about earlier, the economics, the need to modernize and embrace open-software defined industry standard architecture. >> And do have visibility at this point as to how portable the race to the telcos identify that sort of new standards? Do you have a sense as to how portable that would be to some of these other use cases or is it really like the software industry of when that started to grow, it was just so fragmented. Now, granted it's consolidated now, but do you have visibility on that yet? >> A little, but I mean the basic building blocks are quite portable. There's radio technology, 5G radio technology and there's a distinction between what might be required say to replace wifi at the Dell Round Rock Campus versus what AT&T needs for Manhattan, right? >> Yeah. >> But basically there's radio technology, which is increasingly becoming software running on industry standard hardware. And then the same sort of virtualization layer that is helpful in basically pulling all of this together, plays there as does the underlying hardware where Edge servers can be built for telco spec and easily modified to be an Edge enterprise use case. That's the base. On top of that however, is often a vertical solution. Like in retail's very timely, temperature sensing and mask detection and distance determination, right? So somebody's going to want to take that capability. And that's not something you're going to bounce off of some public cloud. You're going to want to actually understand in real time, as people walk in and out of the place, are they being compliant with whatever policies I have? So on top of some of this compute and virtualization and to some extent sometimes storage on the Edge, what else goes on that? Is it a video surveillance solution? Is it an automated mining RFID solution? And so we've got a little bit of insight and we know which verticals appear to be largest right now and which ones are going to pop first. And that's where a lot of people are putting their attention. >> Well, it's going to be interesting 'cause it sounds like there's a real long tale there. And you mentioned industry standard hardware and software, but maybe a new industry standard emerges for some of those use cases that you just mentioned where you need very low latency. Maybe that's where ARM gets in and maybe get some massive volume because while it's a long tail, it's also huge. >> It is. I mean, some people are estimating the Edge economy to be four times the internet economy because we get stuff that's going to be written that we don't even... It's no different than we went from... At one point, the only software in the world was mainframe software. And then some knucklehead wrote client server software and it was considered a niche. Fast forward 15 years later, mainframe is a subsegment of the computer industry and it's all client server software. And then we go cloud native. And at first it's a couple of cloud native apps and pretty soon it's a bunch. And this thing just goes back and forth. The difference is or I think the interesting thing is the cycle times are really compressing. I don't know if you've read Tom Friedman's latest book, "Thank You For Being Late", but it's all about how do we thrive as humans in the age of accelerations? Because the theory is we're not getting enough time to catch our breath now between pendulum swings. It's interesting. Same thing happened in cellular technology. I didn't know until I started doing this job, but 1G was real for about... It was the dominant form of networking for 17 years for mobile networking. Then 2G was for around 11. 3G was seven-ish. 4G looks like it's going to be six. So technology just keeps quickening. And it makes the amount of time we get to be horizontal and catch our breath as the industry is stable, there's always an inflection of some sort going on in our industry. And so change is absolutely the new normal. >> Yeah. And some of these things are really hard to predict. I mean, remember TCP/IP used to be this old, reliable protocol that runs the world. >> Exactly right. >> I want to ask you about... Last question is as a service initiative of Project Apex or Apex it's called. And that's obviously not just some kind of gimmick. I mean, that affects the strategy of the entire organization, the way in which customers want to consume the product or platform strategies now. How does that as a service pricing model affect the business that we've been talking about for the last 10 or 15 minutes? >> Well, the good news for us, those of us at the company working on Edge and telecom and all of that sort of stuff is we're actually building the business under the Apex philosophy, right? So our design center out of the gate is as a service. Michael made the observation a long time ago within our leadership team that, back to my comment, that workloads are like water. They seek their ground. There's a difference between where a workload belongs and the interest in a particular operating model or excuse me, a particular consumption model. And get they've been combined for a long time, right? The only way to get the, as a service consumption model, was through public cloud infrastructure. But it turns out that the right place for workload may well be on-premises not in a private data center or it may well be on the Edge not in a public cloud, but people still want to take advantage of the consumption model, right? The economics are the economics. And so for me, doing the telecom stuff, it's, as a service, the heart of the design center from a consumption model right out of the gate, which is frankly easier than trying to retrofit everything else. >> Right. >> But nonetheless, for us as a company, it's just an opportunity to give our customers the choice that they want in terms of not only what they acquire, but how they acquire it. >> Well Dennis, I always love talking to you. You're such a clear thinker and you've obviously gone deep into some of these topics. And good luck in the role in the telco world. It's obviously a huge opportunity. Everybody's really excited about it. And thank you for coming on theCUBE. >> All right. Thank you, Dave. It's been a pleasure. Nice chatting with you. >> Alright. And thank you for watching, everybody. This is theCUBE's coverage of Dell Tech World 2020, the virtual cube. Keep it right there. We'll be right back right after this short break. (relaxed music)

>> Announcer: From around the globe, it's theCUBE with digital coverage of Dell Technologies World Digital Experience, brought to you by Dell Technologies. >> Hello everyone and welcome back to theCUBE's continuing coverage of Dell Tech World 2020. This is Dave Volante and with me is Dennis Hoffman. He's a senior vice president and general manager for telecom systems business at Dell Technologies. Good to see you Dennis. Welcome. >> Thanks Dave. Great to be here. >> So let's talk a little bit about corporate strategy, which is your wheelhouse. I'm curious, has the pandemic at all altered your thinking on Dell strategy? >> Interestingly enough it hasn't. I suppose it would be standard for me to say that, but if anything, it's just given us both a sense of the challenge of what we had to do as a company to keep doing business. But also it's been really illuminating because it's given us a glimpse of the future. And fortunately, I think we've been pretty well prepared for what's happening. >> Well, I think in a way there's a bias inside of Dell because you guys were probably more work from home than the average company and you, in a way, might've been more prepared for this and maybe your thinking was already headed in that direction. What do you think about that? >> No, I think it's a reasonable thesis. The company is very much a work-from-home oriented or mobile in terms of where we work, an overall, I guess, hypothesis that work's something you do, it's not a place. But we also had a portfolio that benefited from the pandemic and an overarching strategy that was really to help our customers transform digitally. And if anything, the pandemic's accelerated all of that. So again, not without its challenges. And I certainly feel for the folks who get an awful lot of their energy from working with people every day because that's what's missing for an awful lot of folks who are doing an awful lot of what you and I are doing here. But otherwise I think we were biased toward it and it worked out pretty well so far. >> Okay. So it hasn't changed your strategy, but I would imagine some of your assumptions have changed. I mean, obviously more people are going to be working from home now, probably at least double. If it was 15 to 20% pre-COVID, it's going to be, let's call it 30, 35, maybe even 40% post-COVID. Maybe it's going to take a while, six, nine months to get there. But I would imagine some of your assumptions have changed. Is that a fair statement? >> Yeah, I think ours and the industries at large. Most companies' business continuity plans really centered around natural disasters. In most of those plans, 30% of the population working remotely was the high watermark. Right now, we're seeing whole industries redoing their business continuity plans, factoring in 60, 70% bogeys for how many people or what percentage of their population would work from home. As we surveyed our employees, 90% of people said we be either some form of hybrid work experience or completely remote. So, again, if we're for a bit of a leading edge on this, we're probably going to be tilted even more toward it, but there's been a big change in assumption about what remote work looks like and what you've got to do to make it productive. >> So we're a decade and a half into the cloud or at least the modern cloud era. What's your take on where the industry is today and how it affects your business and your cloud strategy broadly? >> Yeah, it's a fascinating. We're in the midst of an ever accelerating set of cycles or pendulum swings from centralized computing to decentralized computing back to centralized. We went from the mainframe era to the client server era and then even quicker to the cloud era. And now we're seeing the emergence of the edge. The one thing that's constant through all of this is workloads are like water. They seek their ground. Workloads have characteristics. They need performance, economics, security, data gravity. And so we've been firm believers through this whole time that a certain amount of workload's going to end up in a very centralized model. Some is going to end up very decentralized and our job is just to enable our customers to put the workloads where they need to run best. So as you point out, we're quite a ways into the cloud era now. It looks like the edge era is emerging. I like to think of it as really three legs of a stool. You've got work can run in a private data center, it can run in a public data center or it can run everywhere else. And increasingly, everywhere else is being called the Edge, all of it by the way, in a cloud operating model. So big distinction between cloud, the model and cloud, the place. And so in many ways, we talked specifically to certain vertical markets, the cloud era is already beginning to give way to the beginning of the Edge era. >> Well, and at the same time too, you're seeing the hyperscalers recognizing the need for whatever it is, for economics, for legal reasons, for preference or latency moving on-prem. >> Right. >> And so I was having an interesting discussion with the CIO the other day and I asked them, "Well, what what do you look at as cloud? "Cloud is everywhere. "I got my cloud on-prem. "I got my multiple clouds, which is clear. "Everybody's going multicloud." And then he happened to have 17,000 stores that he was looking after. He goes, that's Edge to me. That's all part of my cloud. And now of course, part of your role is telco. So let's talk about that space. You've got the over-the-top providers. They're sucking off the infrastructure that have been built out by the telcos. Cost per bid is coming down. Data uses is exploding. And the telco industry really has to transform its infrastructure. They're not agile enough and they can't wait to get to this new era of 5G. So I'm interested in your thoughts on that, how you see Dell helping. >> Well, as I'll tell you, you characterize it right on. I've in the last several months, spend a lot of time with telecom executives all over the world because of how easy it is to do this sort of thing. And they need to transform. The digital transformation sweeping the rest of the world has caught up with telecom and for a whole bunch of reasons. And some of those you pointed out, right, agility, cost, economics. They're in a funny place. Never has the demand for communication services been greater. And yet never have their financial positions been more challenged. Because they're stuck between an old, fairly proprietary, closed architecture and a handful of vendors and on the other hand, embracing this cloud computing data era where there's thousands of vendors. And they somehow all need to be cobbled together into an open software-defined system that runs on industry standard hardware. And yet most telecoms aren't prepared to do that integration themselves. So for us, we see immense opportunity. It's literally as if a massive 100 billion dollar plus addressable market has effectively decided they need to start buying the kinds of things we've been making for years. And moreover, they are by definition, fundamentally a distributed model. The big difference, I think, between Dell Technologies and a hyperscaler is we as a company we're built in and for a distributed computing world. We deal with very mundane topics like how do you get a person onsite within an hour? And how many spares depots do you have? And all of those sorts of things. Whereas hyperscalers were built for the exact opposite. A world in which they said, "Hey, give me your data, "give me your workloads. "I'll think hard about it. "And I'll give you a very flexible economic model." The Edge puts all of that up in the air and telcos's the leading part of this Edge, right? They're the ones that own a great deal of the Edge. And as you pointed out, 5G is really the thing that's got everybody excited. >> Well, you bring up a good point about the hyperscalers. I mean, their challenge now is they go on-premise. Okay. How do you service and support those customers at scale 'cause everything they do is at scale, it's all highly automated. So that's interesting. At the same time, I wonder you're a strategy guy. You look at what Amazon retail does. They're putting up warehouses everywhere. They're putting points of presence. I wonder if there are analogs to the technology business. It's probably more complicated, right, 'cause you're not servicing, you're just delivering. >> But I think you're right on. There's analogs. Look, we all are what we are as vendors. We all have our business models. Ours is to sell equipment and software and services to somebody. Amazon, since its founding, has really been about how do I insert myself in a transaction and ease that transaction and take a slice? Google's been about democratizing and monetizing the world's data. So Amazon needs access to transactions. Google needs access to the world's data, all the hyperscalers want into telco because they want onto the Edge. The same point you made about on-premises, right, like Outpost or Azure Stack. It's fundamentally admission by a hyperscaler that, "Yeah, I guess all workload doesn't belong "in the public cloud. "It's not all going to end up here." And I think they've got the same challenge when it comes to the Edge. And so people are trying to build their way out 'cause they need connectivity to the Edge. For us, we know that telecoms have to become multi clouds. You've referenced earlier the over-the-top profit problem. Well, they lost the profits from the consumer. B2C, they built the networks, they ran the networks and everybody else took the profit. So now here comes 5G with the promise of business services, real B2B revenue opportunities for telecom. And once again, they're faced with a choice. Either they become the cloud operator and allow the hyperscalers in as part of their multi-cloud or they give up the cloud to the hyperscalers and there go the over-the-top profits again. So it really, I found, a fascinating set of dynamics and an industry that can really use the help of somebody like Dell Technologies. >> Well, that's interesting 'cause as is many markets, consumer leads and then B2B markets open up. Well, how do you think this plays out? I mean, the telcos have very specialized hardware. They got this hardened and fossilized infrastructure. So where do you guys fit in that transformation and how do you see it evolving? >> Well, it's already started in a way, it's from the inside out. So telecommunications companies, as I look at them, as we look at them, they're almost like three companies in one. They have conventional IT organizations that in many ways look no different than a bank. They have their businesses, of course, the network where they spend the vast majority of their money, but it's not homogenous. There's a network core, there's a network Edge and then there's an access network. And then most of them, of course, sell services, business services. So they have lines of business. So we look at them as an IT organization, through the CIO, as a massive network operator through the CTO and then as a business partner, some of whom are even in our channel program and their cloud, their cloud services partners. And that's all through their line of business. So they're starting to open up from the inside out. Data center's going through transformation. It's begun in the network core. Now, the Edge is the next thing. And the RAN, in case of mobile operator, the radio access network, will ultimately come. And so you're right. There's a fossilized infrastructure in some places, but we've already seen the core start to desegregate and it will now ripple all the way out to their Edge and I think frankly through it and right onto the enterprise premise with private mobility. >> And so do you see them taking that infrastructure model all the way out to the Edge and trying to replicate essentially their what would've been monopolies for years or do you see them... It sounds like it's going to be a mix. Some of them are actually maybe going to lean on the hyperscalers and try to become more over-the-top content providers. >> Well, I think two challenges in business right? I guess they say there's three great motivators in business in life, make money, save money, stay out of jail, like revenue, cost and risk. They got a cost problem. They've got to get off the monolithic closed infrastructure architectures. They've got a revenue problem that a lot of the additional revenues and services went to somebody else, the OTT, the over-the-top folks. And so I think you will absolutely see a mix, but nobody can afford. No telecom communications company can afford to simply hand their network over. Unless they've reconciled, I'm just going to be a dumb pipe again, right? And none of them want that. >> Right. = But I think in many ways, they're waiting for somebody to walk in and say, "But here's the answer." And I can tell you that at Dell Technologies, and by that, I mean both within Dell and certainly within VMware, we're very strong proponents of the notion of an open software-defined network architecture built on industry standard hardware. And we're pretty well positioned, I think, to provide it or certainly that's the hope and the thesis behind our business. >> Yeah. So that then allows them to compete much more effectively, to provide, like you say, new B2B services, but it really is their infrastructure has been the big blocker up until recently. And you're right. I mean, network function virtualization has started to see through. We've seen some of the benefits of that and then now they've got to take it to the next level, your point about the Edge. >> Well in the 5G standard or 5G, the next cellular technology generation is actually defined by the three GPP standards. Release 15 was the first one that came out and it specified both standalone 5G networks where you can get all of these benefits and non-standalone where you basically have to mix 5G into the core, rely on the 4G Edge. And that's the only thing that's been deployed so far. So as in many things, the hype leads the reality by a little bit. So we've been talking 5G for a while, but the release 16 that would get you some of the really hyped up features of 5G just released this year. So it's coming and there's a lot of talk about it right now. There's a race to have the largest 5G network in America and the largest 5G network in the UK and so on and so forth. But this isn't really the true power of 5G. That window is still open and it's coming. >> You do a lot of strategy work. You obviously see the opportunity Edge, the term is just enormous. So you got to be wetting your chops at that. At the same time, the requirements are totally different. So I'm curious as to how you, as a strategy expert, dovetail into the architectural decisions that have to be made and the connective tissue between strategy and architecture and actually the whole go-to market, that whole value chain that you think about, how are you thinking about that in the world of Edge? >> Well there's, at the end of the day, two strategy decisions you got to make, where do I play and if I decide to play there, how do I win? So where do you play on the Edge is a very interesting question. Anytime there's a new computing paradigm shift, you go from something that's been pretty stable and frankly pretty horizontal and it becomes pretty verticalized. So the Edge is thousands of things right now. And it's many highly verticalized use cases, manufacturing, mining, retail, even something as simple as campus wifi replacement. So you've got to pick your spot. And for a company of our size, that really comes down to thinking about which of these Edge use cases are going to pop first, which one's going to teach you the most, which one's going to have the right level of scale. And this is where telco and Edge intersect because it turns out one big and easily reachable use case for Edge is to partner strongly with the telecommunications industry where something like 30 companies in the world make up 80% of the capital spending. I mean, you don't have to run a Superbowl ad. You can get all of your customers in a bus, right. So that's why I think there's really this somewhat silent, somewhat subtle and somewhat not so subtle competition for the architecture of the telecom industry as it refreshes, both because of 5G as an inflection point, but also just because of the stuff we talked about earlier, the economics, the need to modernize and embrace open-software defined industry standard architecture. >> And do have visibility at this point as to how portable the race to the telcos identify that sort of new standards? Do you have a sense as to how portable that would be to some of these other use cases or is it really like the software industry of when that started to grow, it was just so fragmented. Now, granted it's consolidated now, but do you have visibility on that yet? >> A little, but I mean the basic building blocks are quite portable. There's radio technology, 5G radio technology and there's a distinction between what might be required say to replace wifi at the Dell Round Rock Campus versus what AT&T needs for Manhattan, right? >> Yeah. >> But basically there's radio technology, which is increasingly becoming software running on industry standard hardware. And then the same sort of virtualization layer that is helpful in basically pulling all of this together, plays there as does the underlying hardware where Edge servers can be built for telco spec and easily modified to be an Edge enterprise use case. That's the base. On top of that however, is often a vertical solution. Like in retail's very timely, temperature sensing and mask detection and distance determination, right? So somebody's going to want to take that capability. And that's not something you're going to bounce off of some public cloud. You're going to want to actually understand in real time, as people walk in and out of the place, are they being compliant with whatever policies I have? So on top of some of this compute and virtualization and to some extent sometimes storage on the Edge, what else goes on that? Is it a video surveillance solution? Is it an automated mining RFID solution? And so we've got a little bit of insight and we know which verticals appear to be largest right now and which ones are going to pop first. And that's where a lot of people are putting their attention. >> Well, it's going to be interesting 'cause it sounds like there's a real long tale there. And you mentioned industry standard hardware and software, but maybe a new industry standard emerges for some of those use cases that you just mentioned where you need very low latency. Maybe that's where ARM gets in and maybe get some massive volume because while it's a long tail, it's also huge. >> It is. I mean, some people are estimating the Edge economy to be four times the internet economy because we get stuff that's going to be written that we don't even... It's no different than we went from... At one point, the only software in the world was mainframe software. And then some knucklehead wrote client server software and it was considered a niche. Fast forward 15 years later, mainframe is a subsegment of the computer industry and it's all client server software. And then we go cloud native. And at first it's a couple of cloud native apps and pretty soon it's a bunch. And this thing just goes back and forth. The difference is or I think the interesting thing is the cycle times are really compressing. I don't know if you've read Tom Friedman's latest book, "Thank You For Being Late", but it's all about how do we thrive as humans in the age of accelerations? Because the theory is we're not getting enough time to catch our breath now between pendulum swings. It's interesting. Same thing happened in cellular technology. I didn't know until I started doing this job, but 1G was real for about... It was the dominant form of networking for 17 years for mobile networking. Then 2G was for around 11. 3G was seven-ish. 4G looks like it's going to be six. So technology just keeps quickening. And it makes the amount of time we get to be horizontal and catch our breath as the industry is stable, there's always an inflection of some sort going on in our industry. And so change is absolutely the new normal. >> Yeah. And some of these things are really hard to predict. I mean, remember TCP/IP used to be this old, reliable protocol that runs the world. >> Exactly right. >> I want to ask you about... Last question is as a service initiative of Project Apex or Apex it's called. And that's obviously not just some kind of gimmick. I mean, that affects the strategy of the entire organization, the way in which customers want to consume the product or platform strategies now. How does that as a service pricing model affect the business that we've been talking about for the last 10 or 15 minutes? >> Well, the good news for us, those of us at the company working on Edge and telecom and all of that sort of stuff is we're actually building the business under the Apex philosophy, right? So our design center out of the gate is as a service. Michael made the observation a long time ago within our leadership team that, back to my comment, that workloads are like water. They seek their ground. There's a difference between where a workload belongs and the interest in a particular operating model or excuse me, a particular consumption model. And get they've been combined for a long time, right? The only way to get the, as a service consumption model, was through public cloud infrastructure. But it turns out that the right place for workload may well be on-premises not in a private data center or it may well be on the Edge not in a public cloud, but people still want to take advantage of the consumption model, right? The economics are the economics. And so for me, doing the telecom stuff, it's, as a service, the heart of the design center from a consumption model right out of the gate, which is frankly easier than trying to retrofit everything else. >> Right. >> But nonetheless, for us as a company, it's just an opportunity to give our customers the choice that they want in terms of not only what they acquire, but how they acquire it. >> Well Dennis, I always love talking to you. You're such a clear thinker and you've obviously gone deep into some of these topics. And good luck in the role in the telco world. It's obviously a huge opportunity. Everybody's really excited about it. And thank you for coming on theCUBE. >> All right. Thank you, Dave. It's been a pleasure. Nice chatting with you. >> Alright. And thank you for watching, everybody. This is theCUBE's coverage of Dell Tech World 2020, the virtual cube. Keep it right there. We'll be right back right after this short break. (relaxed music)

(electronic music) (graphics whooshing) (graphics tinkling) >> Telecommunications is well north of a trillion-dollar business globally, that provides critical services on which virtually everyone on the planet relies. Dramatic changes are occurring in the sector, and one of the most important dimensions of this change is the underlying infrastructure that powers global telecommunications networks. Telcos have been thawing out, if you will, they're frozen infrastructure, modernizing. They're opening up, they're disaggregating their infrastructure, separating, for example, the control plane from the data plane, and adopting open standards. Telco infrastructure is becoming software-defined. And leading telcos are adopting cloud native microservices to help make developers more productive, so they can respond more quickly to market changes. They're embracing technology consumption models, and selectively leveraging the cloud where it makes sense. And these changes are being driven by market forces, the root of which stem from customer demand. So from a customer's perspective, they want services, and they want them fast. Meaning, not only at high speeds, but also they want them now. Customers want the latest, the greatest, and they want these services to be reliable and stable with high quality of service levels. And they want them to be highly cost-effective. Hello and welcome to this preview of Mobile World Congress 2023. My name is Dave Vellante, and at this year's event, theCUBE has a major presence at the show made possible by Dell Technologies, and with me to unpack the trends in telco, and look ahead to MWC23 are Dennis Hoffman, he's the Senior Vice President and General Manager of Dell's telecom business, and Aaron Chaisson, who is the Vice President of Telecom and Edge Solutions Marketing at Dell Technologies, gentlemen, welcome, thanks so much for spending some time with me. >> Thank you, Dave. >> Thanks, glad to be here. >> So, Dennis, let's start with you. Telcos in recent history have been slow to deliver and to monetize new services, and a large part because their purpose-built infrastructure could been somewhat of a barrier to responding to all these market forces. In many ways, this is what makes telecoms, really this market so exciting. So from your perspective, where is the action in this space? >> Yeah, the action Dave is kind of all over the place, partly because it's an ecosystem play. I think it's been, as you point out, the disaggregation trend has been going on for a while. The opportunity's been clear, but it has taken a few years to get all of the vendors, and all of the components that make up a solution, as well as the operators themselves, to a point where we can start putting this stuff together, and actually achieving some of the promise. >> So Aaron, for those who might not be as familiar with Dell's a activities in this area, here we are just ahead of Mobile World Congress, it's the largest event for telecoms, what should people know about Dell? And what's the key message to this industry? >> Sure, yeah, I think everybody knows that there's a lot of innovation that's been happening in the industry of late. One of the major trends that we're seeing is that shift from more of a vertically-integrated technology stack, to more of a disaggregated set of solutions, and that trend has actually created a ton of innovation that's happening across the industry, or along technology vendors and providers, the telecoms themselves. And so, one of the things that Dell's really looking to do is, as Dennis talked about, is build out a really strong ecosystem of partners and vendors that we're working closely together to be able to collaborate on new technologies, new capabilities that are solving challenges that the networks are seeing today. Be able to create new solutions built on those in order to be able to bring new value to the industry. And then finally, we want to help both partners, as well as our CSP providers activate those changes, so that they can bring new solutions to market, to be able to serve their customers. And so, the key areas that we're really focusing on with our customers is, technologies to help modernize the network, to be able to capitalize on the value of open architectures, and bring price performance to what they're expecting, and availability that they're expecting today. And then also, partner with the lines of business to be able to take these new capabilities, produce new solutions, and then deliver new value to their customers. >> Great, thank you, Aaron. So Dennis, you and I, known you for a number of years. I've watched you, you're are a trend spotter. You're a strategic thinker. I love now the fact that you're running a business that you had to go out and analyze, and now you got to make it happen. So, how would you describe Dell's strategy in this market? >> Well, it's really two things. And I appreciate the comment, I'm not sure how much of a trend spotter I am, but I certainly enjoy, and I think I'm fascinated by what's going on in this industry right now. Our two main thrusts, Dave, are first round, trying to catalyze that ecosystem, be a force for pulling together a group of folks, vendors that have been flying in fairly loose formation for a couple of years, to deliver the kinds of solutions that move the needle forward, and produce the outcomes that our network operator customers can actually buy and consume, and deploy, and have them be supported. The other thing is, there's a couple of very key technology areas that need to be advanced here. This ends up being a much anticipated year in telecom. Because of the delivery of some open infrastructure solutions that have being developed for years. With the Intel Sapphire Rapids program coming to market, we've of course got some purpose-built solutions on top of that for telecommunications networks. Some expanded partnerships in the area of multi-cloud infrastructure. And so, I would say the second main thrust is, we've got to bring some intellectual property to the party. It's not just about pulling the ecosystem together. But those two things together really form the twin thrusts of our strategy. >> Okay, so as you point out, you obviously not going to go alone in this market, it's way too broad, there's so many routes to market, partnerships, obviously very, very important. So, can you share a little bit more about the ecosystem and partners, maybe give some examples of some of the key partners that you'd be highlighting or working with, maybe at Mobile World Congress, or other activities this year? >> Yeah, absolutely. As Aaron touched on, I'm a visual thinker. The way I think about this thing is a very, very vertical architecture is tipping sideways. It's becoming horizontal. And all of the layers of that horizontal architecture are really where the partnerships are at. So, let's start at the bottom, silicon. The silicon ecosystem is very much focused on this market. And producing very specific products to enable open, high performance telecom networks. That's both in the form of host processors, as well as accelerators. One layer up, of course, is the stuff that we're known for, subsystems, compute storage, the hardware infrastructure that forms the foundation for telco clouds. A layer above that, all of the cloud software layer, the virtualization and containerization software, and all of the usual suspects there, all of whom are very good partners of ours, and we're looking to expand that pretty broadly this year. And then at the top of the layer cake, all of the network functions, all of the VNF's and CNF's that were once kind of the top of proprietary stacks, that are now opening up and being delivered, as well-formed containers that can run on these clouds. So, we're focusing on all of those, if you will, product partnerships, and there is a services wrapper around all of it. The systems integration necessary to make these systems part of a carrier's network, which of course, has been running for a long time, and needs to be integrated with in a very specific way. And so, all of that, together kind of forms the ecosystem, all of those are partners, and we're really excited about being at the heart of it. >> Interesting, it's not like we've never seen this movie before, which is, it's sort of repeating itself in telco. Aaron, you heard my little intro up front about the need to modernize infrastructure, I wonder if I could touch on another major trend, which we're seeing is the cloud, and I'm talkin' about not only public, but private and hybrid cloud. The public cloud is an opportunity, but it's also a threat for telcos. Telcom providers are lookin' to the public cloud for specific use cases, you think about like bursting for an iPhone launch or whatever. But at the same time, these cloud vendors, they're sort of competing with telcos. They're providing local zones, for example, sometimes trying to do an end run on the telco connectivity services, so telecom companies, they have to find the right balance between what they own and what they rent. And I wonder if you could add some color as to what you see in the market and what Dell specifically is doing to support these trends. >> Yeah, and I think the most important thing is what we're seeing, as you said, is these aren't things that we haven't seen before. And I think that telecom is really going through their own set of cloud transformations, and so, one of the hot topics in the industry now is, what is telco cloud? And what does that look like going forward? And it's going to be, as you said, a combination of services that they offer, services that they leverage. But at the end of the day, it's going to help them modernize how they deliver telecommunication services to their customers, and then provide value added services on top of that. From a Dell perspective, we're really providing the technologies to provide the underpinnings to lay a foundation on which that network can be built, whether that's best of breed servers that are built in design for the telecom environments. Recently, we announced our Infer block program, in partnering with virtualization providers, to be able to provide engineered systems that dramatically simplify how our customers can deploy, manage, and lifecycle manage throughout day two operations, an entire cloud environment. And whether they're using Red Hat, whether they're using Wind River, or VMware, or other virtualization layers, they can deploy the right virtualization layer at the right part of their network to support the applications they're looking to drive. And Dell is looking to solve how they simplify and manage all of that, both from a hardware, as well as on management software perspective. So, this is really what Dell's doing to, again, partner with the broader technology community, to help make that telco cloud a reality. >> Aaron, let's stay here for a second, I'm interested in some of the use cases that you're going after with customers. You've got Edge infrastructure, remote work, 5G, where's security fit, what are the focus areas for Dell, and can we double click on that a little bit? >> Yeah, I mean, I think there's two main areas of telecommunication industry that we're talking to. One, we've really been talking about the sort of the network buyer, how do they modernize the core, the network Edge, the RAN capabilities to deliver traditional telecommunication services, and modernize that as they move into 5G and beyond. I think the other side of the business is, telecoms are really looking from a line of business perspective to figure out how do they monetize that network, and be able to deliver value added services to their enterprise customers on top of these new networks. So, you were just touching on a couple of things that are really critical. In the enterprise space, AI and IoT is driving a tremendous amount of innovation out there, and there's a need for being able to support and manage Edge compute at scale, be able to provide connectivity, like private mobility, and 4G and 5G, being able to support things like mobile workforces and client capabilities, to be able to access these devices that are around all of these Edge environments of the enterprises. And telecoms are seeing as that, as an opportunity for them to not only provide connectivity, but how do they extend their cloud out into these enterprise environments with compute, with connectivity, with client and connectivity resources, and even also provide protection for those environments as well. So, these are areas that Dell is historically very strong at. Being able to provide compute, be able to provide connectivity, and being able to provide data protection and client services, we are looking to work closely with lines of businesses to be able to develop solutions that they can bring to market in combination with us, to be able to serve their end user customers and their enterprises. So, those are really the two key areas, not only network buyer, but being able to enable the lines of business to go and capitalize on the services they're developing for their customers. >> I think that line of business aspect is key, I mean, the telcos have had to sit back and provide the plumbing, cost per bit goes down, data consumption going through the roof, all the over at the top guys have had the field day with the data, and the customer relationships, and now it's almost like the revenge (chuckles) of the telcos. Dennis, I wonder if we could talk about the future. What can we expect in the years ahead from Dell, if you break out the binoculars a little bit. >> Yeah, I think you hit it earlier. We've seen the movie before. This has happened in the IT data center. We went from proprietary vertical solutions to horizontal open systems. We went from client server to software-defined open hardware cloud native. And the trend is likely to be exactly that, in the telecom industry because that's what the operators want. They're not naive to what's happened in the IT data center, they all run very large data centers. And they're trying to get some of the scale economies. Some of the agility, the cost of ownership benefits for the reasons Aaron just discussed. It's clear as you point out, this industry's been really defined by the inability to stop investing, and the difficulty to monetize that investment. And I think now, everybody's looking at this 5G, and frankly, 5G plus 6G, and beyond, as the opportunity to really go get a chunk of that revenue, and Enterprise Edge is the target. >> And 5G is touching so many industries, and that kind of brings me, Aaron into Mobile World Congress. I mean, you look at the floor layout, it's amazing. You got Industry 4.0, you've got our traditional industry and telco colliding. There's public policy. So, give us a teaser to Mobile World Congress 23, what's on deck at the show from Dell? >> Yeah, we're really excited about Mobile World Congress. This, as you know, is a massive event for the industry every year. And it's really the event that the whole industry uses to kick off this coming year. So, we're going to be using this obviously to talk to our customers and our partners about what Dell's looking to do, and what we're innovating on right now, and what we're looking to partner with them around. In the front of the house, we're going to be doin', we're going to be highlighting 13 different solutions and demonstrations to be able to show our customers what we're doing today, and show them the use cases, and put into action, so they get to actually look and feel, and touch, and experience what it is that we're working around. Obviously, meetings are important, everybody knows Mobile World Congress is the place to get those meetings and kickoff for the year. So, we're going to have, we're lookin' at several hundred meetings, hundreds of meetings that we're going to be lookin' to have across the industry with our customers and partners in the broader community. And of course, we've also got technology that's going to be in a variety of different partner spaces as well. So, you can come and see us in hall three, but we're also going to have technologies, kind of spread all over the floor. And of course, there's always theCUBE. You're going to be able to see us live all four days, all day, every day. You're going to be hearing our executives, our partners, our customers, talk about what Dell is doing to innovate in the industry, and how we're looking to leverage the broader, open ecosystem to be able to transform the network, and what we're lookin' to do. So, in that space, we're going to be focusing on what we're doing from an ecosystem perspective, our infrastructure focus. We'll be talking about what we're doing to support telco cloud transformation. And then finally, as we talked about earlier, how are we helping the lines of business within our telecoms monetize the opportunity? So, these are all different things we're really excited to be focusing on, and look forward to the event next month. >> Yeah, it's going to be awesome in Barcelona at the FITA, as you say, Dell's big presence in hall three, Orange is in there, Deutsche Telecom, Intel's in hall three. VMware's there, Nokia, Vodafone, you got some great things to see there. Check that out, and of course, theCUBE, we are super excited to be collaborating with you, we got a great setup. We're in the walkway right between halls four and five, right across from the government of Catalonia, who are the host partners for the event, so there's going to be a ton of action there. Guys, can't wait to see you there, really appreciate your time today. >> Great, thanks. >> Alright, Mobile World Congress, theCUBE's coverage starts on February 27th right after the keynotes. So, first thing in the morning, east coast time, we'll be broadcasting is, Aaron said all week, Monday through Thursday in the show floor, check that out at thecube.net. siliconangle.com has all the written coverage, and go to dell.com, see what's happenin' there, have all the action from the event. Don't miss us, this is Dave Vellante, we'll see you there. (electronic music)

(upbeat music) >> Telecommunic^ations is well north of a trillion-dollar business globally that provides critical services on which virtually everyone on the planet relies. Dramatic changes are occurring in the sector, and one of the most important dimensions of this change is the underlying infrastructure that powers global telecommunications networks. Telcos have been thawing out, if you will, their frozen infrastructure, modernizing. They're opening up. They're disaggregating their infrastructure, separating, for example, the control plane from the data plane and adopting open standards. Telco infrastructure is becoming software-defined, and leading telcos are adopting cloud-native microservices to help make developers more productive, so they can respond more quickly to market changes. They're embracing technology consumption models and selectively leveraging the cloud where it makes sense, and these changes are being driven by market forces, the root of which stem from customer demand. So from a customer's perspective, they want services, and they want them fast, meaning not only at high speeds, but also they want them now. Customers want the latest, the greatest, and they want these services to be reliable and stable with high quality of service levels, and they want them to be highly cost effective. Hello and welcome to this preview of Mobile World Congress 2023. My name is Dave Vellante and at this year's event, theCUBE has a major presence at the show, made possible by Dell Technologies, and with me, to unpack the trends in Telco and look ahead to MWC 23, Dennis Hoffman. He's the senior vice-president and general manager of Dell's telecom business and Aaron Chaisson, who is the vice-president of telecom and edge solutions marketing at Dell Technologies. Gentlemen, welcome. Thanks so much for spending some time with me. >> Thank you, Dave. >> Thanks, glad to be here. So, Dennis, let's start with you. Telcos in recent history have been slow to deliver and to monetize new services, in a large part, because their purpose-built infrastructure can been somewhat of a barrier to respondent to these market forces. In many ways, this is what makes telecoms, really, this market, so exciting. So from your perspective, where is the action in this space? >> Yeah, the action, Dave, is kind of all over the place, partly because it's an ecosystem play. You know, I think it's been, as you point out, the disaggregation trend has been going on for a while. The opportunity's been clear, but it has taken a few years to get all of the vendors and all of the components that make up a solution, as well as the operators themselves, to a point where we can start putting this stuff together and actually achieving some of the promise. >> So, Aaron, for those who might not be as familiar with Dell's a activities in this area, you know, here we are just ahead of Mobile World Congress. It's the largest event for telecoms. What should people know about Dell, and what's the key message to this industry? >> Sure, yeah, I think everybody knows that there's a lot of innovation that's been happening in the industry of late. One of the major trends that we're seeing is that shift from more of a vertically-integrated technology stack to more of a disaggregated set of solutions, and that trend has actually created a ton of innovation that's happening across the industry, well, along technology vendors and providers, the telecoms themselves, and so one of the things that Dell's really looking to do is, as Dennis talked about, is build out a really strong ecosystem of partners and vendors that we're working closely together to be able to collaborate on new technologies, new capabilities, that are solving challenges that the networks are seeing today, be able to create new solutions built on those in order to be able to bring new value to the industry and then finally, we want to help both partners as well as our CSP providers activate those changes so that they can bring new solutions to market to be able to serve their customers, and so the key areas that we're really focusing on, with our customers, is technologies to help modernize the network to be able to capitalize on the value of open architectures and bring price performance to what they're expecting and availability that they're expecting today and then also partner with the lines of business to be able to take these new capabilities, produce new solutions and then deliver new value to their customers. >> Great, thank you, Aaron. So, Dennis, I have known you for a number of years. I've watched you. You are a trend spotter, and you're a strategic thinker, and I love now the fact that you're running a business that you had to go out and analyze, and now you got got to make it happen. So how would you describe Dell's strategy in this market? >> Well, it's really two things, and I appreciate the comment. I'm not sure how much of a trend spotter I am, but I certainly enjoy, and I think I'm fascinated by what's going on in this industry right now. Our two main thrusts, Dave, are, first round, trying to catalyze that ecosystem, you know, be a force for pulling together a group of folks, vendors, that have been flying in fairly loose formation for a couple of years to deliver the kinds of solutions that move the needle forward and produce the outcomes that our network-operator customers can actually buy, and consume, and deploy, and have them be supported. The other thing is there's a couple of very key technology areas that need to be advanced here. This ends up being a much anticipated year, in telecom, because of the delivery of some open infrastructure solutions that have been being developed for years, with the Intel Sapphire Rapids program coming to market. We've of course got some purpose-built solutions on top of that for telecommunications networks, some expanded partnerships in the area of multi-cloud infrastructure, and so I would say the second main thrust is we've got to bring some intellectual property to the party. It's not just about pulling the ecosystem together, but those two things together really form the twin thrusts of our strategy. >> Okay, so as you point out, you're obviously not going to go alone in this market. It's way too broad. There's so many routes to market, partnerships, obviously, very, very important. So can you share a little bit more about the ecosystem and partners, maybe give some examples of some of the key partners that you'd be highlighting or working with, maybe at Mobile World Congress or other activities this year? >> Yeah, absolutely. You know, as Aaron touched on. I'm a visual thinker. The way I think about this thing is a very, very vertical architecture is tipping sideways. It's becoming horizontal, and all of the layers of that horizontal architecture are really where the partnerships are at. So let's start at the bottom, silicon. The silicon ecosystem is very much focused on this market and producing very specific products to enable open, high-performance telecom networks. That's both in the form of host processors as well as accelerators. One layer up, of course, is the stuff that we're known for, subsystems, compute, storage, the hardware infrastructure that forms the foundation for telco clouds. A layer above that, all of the cloud software layer, the virtualization and containerization software and all of the usual suspects there, all of whom are very good partners of ours, and we're looking to expand that pretty broadly this year, and then at the top of the layer cake, all of the network functions, all of the VNFs and CNFs that were once kind of the top of proprietary stacks that are now opening up and being delivered as well-formed containers that can run on these clouds. So, you know, we're focusing on all of those, if you will, product partnerships, and there is a services wrapper around all of it, the systems integration necessary to make these systems part of a carrier's network, which, of course, has been running for a long time and needs to be integrated with in a very specific way, and so all of that together kind of forms the ecosystem. All of those are partners, and we're really excited about being at the heart of it. >> Interesting, it's not like we've never seen this movie before, which is sort of repeating itself in telco. Aaron, you heard my little intro up front about the need to modernize infrastructure. I wonder if I could touch on, you know, another major trend which we're seeing, is the cloud, and I'm talking about, not only public, but private and hybrid cloud. The public cloud is an opportunity, but it's also a threat for telcos. You know, telecom providers are looking to the public cloud for specific use cases. You think about, like, bursting for an iPhone launch or whatever but at the same time, these cloud vendors, they're sort of competing with telcos. They're providing, you know, local zones, for example, sometimes trying to do an end run on the telco connectivity services. So telecom companies, they have to find the right balance between what they own and what they rent, and I wonder if you could add some color as to what you see in the market and what Dell, specifically, is doing to support these trends. >> Yeah, I think the most important thing is what we're seeing, as you said, is these aren't things that we haven't seen before, and I think that telecom is really going through their own set of cloud transformations, and so one of the hot topics in the industry now is what is telco cloud and what does that look like going forward? And it's going to be a, as you said, a combination of services that they offer, services that they leverage, but at the end of the day, it's going to help them modernize how they deliver telecommunication services to their customers and then provide value-added services on top of that. From a Dell perspective, you know, we're really providing the technologies to provide the underpinnings to lay a foundation on which that network can be built, whether that's best-of-breed servers that are built and designed for the telecom environments. Recently we announced our, our Infra Block program in partnering with virtualization providers to be able to provide engineered systems that dramatically simplify how our customers can deploy, manage and lifecycle-manage throughout day-two operations, an entire cloud environment, and whether they're using Red Hat, whether they're using Wind River or VMware or other virtualization layers, they can deploy the right virtualization layer at the right part of their network to support the applications they're looking to drive, and Dell is looking to solve how they simplify and manage all of that, both from a hardware as well as a management software perspective. So this is really what Dell's doing to, again, partner with the broader technology community to help make that telco cloud a reality. >> Aaron, let's stay here for a second. I'm interested in some of the use cases that you're going after with customers. You've got edge infrastructure, remote work, 5G. Where's security fit? What are the focus areas for Dell, and can we double-click on that a little bit? >> Yeah, I mean, I think there's two main areas of telecommunication industry that we're talking to. One, we've really been talking about sort of the network buyer, how do they modernize the core, the network edge, the RAN capabilities, to deliver traditional telecommunication services and modernize that as they move into 5G and beyond. I think the other side of the business is telecoms are really looking, from a line of business perspective, to figure out how do they monetize that network and be able to deliver value-added services to their enterprise customers on top of these new networks. So you were just touching on a couple of things that are really critical. You know, in the enterprise space, AI and IoT is driving a tremendous amount of innovation out there, and there's a need for being able to support and manage edge compute at scale, be able to provide connectivity, like private mobility and 4G and 5G, being able to support things like mobile workforces and client capabilities to be able to access these devices that are around all of these edge environments of the enterprises, and telecoms are seen as that, as an opportunity for them to not only provide connectivity, but how do they extend their cloud out into these enterprise environments with compute, with connectivity, with client and connectivity resources, and even also provide protection for those environments as well. So these are areas that Dell's historically very strong at, being able to provide compute, being able to provide connectivity and being able to provide data protection and client services. We are looking to work closely with lines of businesses to be able to develop solutions that they can bring to market in combination with us to be able to serve their end user customers and their enterprises. So those are really the two key areas, not only network buyer, but being able to enable the lines of business to go and capitalize on the services they're developing for their customers. >> I think that line of business aspect is key. I mean, the telcos have had to sit back and provide the plumbing. Cost per bit goes down. Data consumption going through the roof. All the way over to the top guys, you know, had the field day with the data and the customer relationships, and now it's almost like the revenge of the telcos. (chuckles) Dennis, I wonder if we could talk about the future. What can we expect in the years ahead from Dell, if you, you know, break out the binoculars a little bit? >> Yeah, I think you hit it earlier. We've seen the movie before. This has happened in the IT data center. We went from proprietary vertical solutions to horizontal open systems. We went from client server to software-defined, open-hardware, cloud-native and you know, the trend is likely to be exactly that, in the telecom industry, because that's what the operators want. They're not naive to what's happened in the IT data center. They all run very large data centers, and they're trying to get some of the scale economies, some of the agility, the cost of ownership benefits for the reasons Aaron just discussed. You know, it's clear, as you point out, this industry's been really defined by the inability to stop investing and the difficulty to monetize that investment, and I think now everybody's looking at this 5G, and, frankly, 5G plus, 6G and beyond, as the opportunity to really go get a chunk of that revenue, and enterprise edge is the target. >> And 5G is touching so many industries, and that kind of brings me here into Mobile World Congress. I mean, you look at the floor layout, it's amazing. You got industry 4.0. You've got, you know, our traditional industry and telco colliding. There's public policy. So give us a teaser to Mobile World Congress '23. What's on deck at the show for from Dell? >> Yeah, we're really excited about Mobile World Congress. This, as you know, is a massive event for the industry every year, and it's really the event that the whole industry uses to kick off this coming year. So we're going to be using this, obviously, to talk to our customers and our partners about what Dell's looking to do and what we're innovating on right now, and what we're looking to partner with them around. In the front of the house, we're going to be highlighting 13 different solutions and demonstrations to be able to show our customers what we're doing today and show them the use cases and put it into action, so they get to actually look and feel and touch and experience what it is that we're working around. Obviously, meetings are important. Everybody knows Mobile World Congress is the place to get those meetings and kick off for the year. You know, we're looking at several hundred meetings, hundreds of meetings that we're going to be looking to have across the industry with our customers and partners and the broader community, and, of course, we've also got technology that's going to be in a variety of different partner spaces as well. So you can come and see us in hall three, but we're also going to have technologies kind of spread all over the floor, and, of course, there's always theCUBE. You're going to be able to see us live all four days, all day, every day. You're going to be hearing our executives, our partners, our customers, talk about, you know, what Dell is doing to innovate in the industry and how we're looking to leverage the broader open ecosystem to be able to transform, you know, the network and what we're looking to do. So in that space, we're going to be focusing on what we're doing from an ecosystem perspective, our infrastructure focus. We'll be talking about what we're doing to support telco cloud transformation and then finally, as we talked about earlier, how are we helping the lines of business within our telecoms monetize the opportunity. So these are all different things we're really excited to be focusing on and look forward to the event next month. >> Yeah, it's going to be awesome In Barcelona at the Fira. As you say, Dell's big presence in Hall three. Orange is in there, Deutsche Telekom. Intel's in Hall three. VMware's there, Nokia, Vodafone. You got great things to see there. Check that out and of course, theCUBE, we are super excited to be collaborating with you. We got a great setup. We're in the walkway, right between halls four and five, right across from the Government of Catalonia, who are the host partners for the event. So there's going to be a ton of action there. Guys, can't wait to see you there. Really appreciate your time today. >> Great, thanks. >> All right, Mobile World Congress, theCUBE's coverage starts on February 27th, right after the keynotes. So first thing in the morning, East coast time, we'll be broadcasting, as Aaron said, all week, Monday through Thursday, on the show floor. Check that out at thecube.net. Siliconangle.com has all the written coverage, and go to dell.com, see what's happening there. Have all the action from the event. Don't miss us. This is Dave Vellante. We'll see you there. (upbeat music)

>>from around the globe. It's the Cube with digital coverage of Dell Technologies. World Digital experience Brought to you by Dell Technologies. Hello, everyone. And welcome back to the cubes Coverage of Del Tech World 2020. With me is Jeff Boudreau, the president general manager of Infrastructure Solutions group Deltek. Jeff, always good to see you, my friend. How you doing? >>Good. Good to see you. >>I wish we were hanging out a Sox game or a pat's game, but, uh, I guess this will dio But, you know, it was about a year ago when you took over leadership of I s G. I actually had way had that sort of brief conversation. You were in the room with Jeff Clark. I thought it was a great, great choice. How you doing? How you feeling Any sort of key moments the past 12 months that you you feel like sharing? >>Sure. So I first I want to say, I do remember that about a year ago. So thank you for reminding me. Yeah, it's, uh it's been a very interesting year, right? It's been it's been one year. It was in September was one year since I took over I s G. But I'm feeling great. So thank you for asking. I hope you're doing the same. And I'm really optimistic about where we are and where we're heading. Aziz, you know, it's been an extremely challenging year in a very unpredictable year, as we've all experienced. And I'd say for the, you know, the first part of the year, especially starting in March on I've been really focused on the health and safety of our, you know, the families, our customers and our team members of the team on a lot of it's been shifting, you know, in regards to helping our customers around, you know, work from home or education and learn from home. And, you know, during all this time, though, I'll tell you, as a team, we've accomplished a lot. There's a handful of things that I'm very proud of, you know, first and foremost, that states around the customer experience we have delivered on our best quality in our product. NPS scores in our entire history. So something I'm extremely proud of during this time around our innovation and innovation engine, we part of the entire portfolio which you're well aware of. We had nine launches in nine weeks back in that May in June. Timeframe. So something I'm really proud of the team on, uh, on. Then last, I'd say it's around the team and right, we shifted about 90% of our workforce from the office tow home, you know, from an engineering team. That could be, you know, 85% of my team is engineers and writing code. And so, you know, people were concerned about that. But we didn't skip a beat, so, you know, pretty impressed by the team and what they've done there. So, you know, the strategy remains unchanged. Uh, you know, we're focused on our customers integrating across the entire portfolio and the businesses like VM ware and really focused on getting share. So despite all the uncertainty in the market, I'm pretty pleased with the team and everything that's been going on. So uh, yeah, it's it's been it's been an interesting year, but it's really great. I'm really optimistic about what we have in front of us. >>Yeah, I mean, there's not much you could do a control about the macro condition on it, you know it. Z dealt to us and we have to deal with it. I mean, in your space. It's the sort of countervailing things here one is. Look, you're not selling laptops and endpoint security. That's not your business right in the data center. Eso. But the flip side of that is you mentioned your portfolio refresh. You know, things like Power Store. You got product cycles now kicking in. So that could be, you know, a buffer. What are you seeing with Power Store and what's the uptake look like? They're >>sure. Well, specifically, let me take a step back and the regards the portfolio. So first, you know, the portfolio itself is a direct reflection in the feedback from all our partners and our customers over the last couple of years on Day two, ramp up that innovation. I spent a lot of time in the last few years simplifying under the power brands, which you're well aware of, right? So we had a lot of for a legacy EMC and Legacy dollars. Really? How do we simplify under a set of brands really over delivering innovation on a fewer set of products that really accelerating in exceeding customer needs? And we did that across the board. So from power edge servers, you know, power Max, the high end storage, the Powerball, all that we didn't hear one. And just most recently. And, you know, it's part of the big launches. We had power scale. We have power flex for software to find. And, of course, the new flagship offer for the mid range, which is power store. Um, Specifically, the policy of the momentum has been building since our launch back in May. And the feedback from our partners and our customers has been fantastic. And we've had a lot of big wins against, you know, a lot of a lot of our core competitors. A couple examples one is Arrow Electronics SAA, Fortune 500 Global Elektronik supplier. They leverage power Store to provide, you know, basically both, you know, enterprise computing and storage needs for their for their broader bases around the world on there, really taking advantage of the 41 data reduction, really helping them simplify their capacity planning and really improve operational efficiencies specifically without impacting performance. So it's it's one. We're given the data reductions, but there's no impact on performance, which is a huge value proffer for arrow another big customers tickets and write a global law firm on their reporting to us that over 90 they've had a 90% reduction in their rack space, and they've had over five times two performance over a core competitors storage systems azi. They've deployed power store around the world, really, and it's really been helping them. Thio easily migrate workloads across, so the feedback from the customers and partners has been extremely positive. Um, there really citing benefits around the architecture, the flexibility architecture around the micro services, the containers they're loving, the D M or integration. They're loving the height of the predictable data reduction capabilities in line with in line performance or no performance penalties with data efficiencies, the workload support, I'd say the other big things around the anytime upgrades is another big thing that customers we're really talking about so very excited and optimistic in regards as we continue to re empower store the second half of the year into next year really is the full full year for power store. >>So can I ask you about that? That in line data reduction with no performance hit is that new ipe? I mean, you're not doing some kind of batch data reduction, right? >>No, it's It's new, I p. It's all patented. We've actually done a lot of work in regards to our technologies. There's some of the things we talk about GPS and deep use and smart Knicks and things like that. We've used some offload engines to help with that. So between the software and the hardware, we've had leverage new I. P. So we can actually provide that predictable data reduction. But right with the performance customers need, So we're not gonna have a trade off in regards. You get more efficiencies and less performance or more performance and less efficiency. >>That's interesting. Yeah, when I talked to the chip guys, they talk about this sort of the storage offloads and other offloads we're seeing. These alternative processors really start to hit the market videos. The obvious one. But you're seeing others. Aziz. Well, you're really it sounds like you're taking advantage of that. >>Yeah, it's a huge benefit. I mean, we should, you know, with our partners, if it's Intel's and in videos and folks like that broad comes, it's really leveraging the great innovation that they do, plus our innovation. So if you know the sum of the parts, can you know equal Mauritz a benefit to our customers in the other day? That's what it's all about. >>So it sounds like Cove. It hasn't changed your strategy. I was talking toe Dennis Hoffman and he was saying, Look, you know, fundamentally, we're executing on the same strategy. You know, tactically, there's things that we do differently. But what's your summarize your strategy coming in tow 2021. You know, we're still early in this decade. What are you seeing is the trends that you're trying to take advantage of? What do you excited about? Maybe some things that keep you up at night? >>Yeah, so I'd say, you know, I'll stay with what Dennis said. You know, it's our strategy is not changing its a company. You probably got that from Michael and from job, obviously, Dennis just recently. But for me, it's a two pronged approach. One's all about winning the consolidation in the core infrastructure markets that we could just paid in today. So I think Service Storage Network, we're already clear leader across all those segments that we serve in our you know, we'll continue to innovate within our existing product categories. And you saw that with the nine launches in the nine weeks in my point on that one is we're gonna always make sure that we have best debris offers. If it's a three tier, two tier or converge or hyper converged offer, we wanna make sure that we serve that and have the best innovation possible. In addition to that, though, the secondary piece of the strategy really is around. How do we differentiate value across or innovating across I S G? You know, Dell Technologies and even the broader ecosystems and some of the examples I'll give you right now that we're doing is if you think about innovating across icy, that's all about providing improved customer experience, a set of solutions and offers that really helped simplify customer operations, right? And really give them better T CEOs or better. S L. A. An example of something like that's cloud like it's a SAS based off of that we have. That really helps provide great insights and telemetry to our customers. That helps them simplify their I T operations, and it's a major step forward towards, you know, autonomous infrastructure which is really what they're asking for. Customers of a very happy with the work we've done around Day one, you know, faster, time to value. But now it's like Day two and beyond. How do you really helped me Kinda accelerate the operations and really take that away from a three other big pieces innovating across all technologies. And you know, we do this with VM Ware now live today, and that's just writing. So things like VX rail is an example where we work together and where the clear leader in H C I. Things like Delta Cloud Uh, when we built in V M V C F A, B, M or cloud foundation in Tan Xue delivering an industry leading hybrid cloud platform just recently a VM world. I'm sure you heard about it, but Project Monterey was just announced, and that's an effort we're doing with VM Ware and some other partners. They're really about the next generation of infrastructure. Um, you know, I guess taking it up a notch out of the infrastructure and I've g phase, you know, some of the areas that we're gonna be looking at the end to end solutions to help our customers around six key areas. I'm sure John Rose talking about the past, but things like cloud Edge five g A i m l data management security. So those will be the big things. You'll see us lean into a Z strategies consistent. Some big themes that you'll see us lean into going into next year. >>Yeah, I mean, it is consistent, right? You guys have always tried to ride the waves, vector your portfolio into those waves and add value. I'm particularly impressed with your focus on customer experience, and I think that's a huge deal. You know, in the past, a lot of companies yours included your predecessor. You see, Hey, throwing so many products at me, I can't I don't understand the portfolio. So I mean, focusing on that I think is huge right now because people want that experience, you know, to be mawr cloudlike. And that's that's what you got to deliver. What about any news from from Dell Tech world? Any any announcements that you you wanna highlight that we could talk about? >>Sure. And actually, just touching back on the point you had no about the simplification that is a major 10 of my in regards the organization. So there's three key components that I drive once around customer focus, and that's keeping customers first and foremost. And everything we do to is around axillary that innovation. Engine three is really bringing everything together as one team. So we provide a better outcome to our customers. You know, in that simplification after that you talk about is court toe what we're driving. So I want to do less things, I guess better in the notion of how we do that. What that means to me is, as I make decisions that want to move away from other technologies and really leverage our best of breed type shared type, that's technology. I p people I p I can, you know, e can exceed customer needs in those markets that were serving. So it's actually allows me to x Sorry, my innovation engine, because I shift more and more resource is onto the newer stock now for Del Tech world. Yes, We got some cool stuff coming. You probably heard about a few of them. Uh, we're gonna be announcing a project project Apex. Hopefully you've been briefed on that already. This isn't new news or I'll be in trouble. But that's really around. Our strategy about delivering, simple, consistent as a service experiences for our customers bringing together are dealt technology as a service offering and our cloud strategy together. Onda also our technology offerings in our go to market all under a single unified effort, which Ellison do would be leading. Um, you know, on behalf of our executive leadership team s, that's one big area. And there is also another big one that I'll talk about a sui expand our as a service offers. And we think there's a big power to that in regards to our Dell Technologies. Cloud console solving will be launching a new cloud console that will provide uniformed experience across all the resources and give users and ability toe instantly managed every aspect of their cloud journey with just a few clicks. So going back to your broader point, it's all about simplicity. >>Yeah, we definitely all over Apex. That's something I wanted to ask you about this notion of as a service, really requiring it could have a new mindset, certainly from a pricing and how you talk about the customer experience that it's a whole new customer experience. Your you're basically giving them access. Thio What I would consider more of a platform on giving them some greater flexibility. Yeah, there's some constraints in there, but of course, you know the physical only put so much capacity and before him. But the idea of being ableto dial up, dial down within certain commitments is, I think, a powerful one. How does it change the way in which you you think about how you go about developing products just in terms of you know, this AP economy Infrastructure is code. How how you converse about those products internally and externally. How would you see that shaking >>out Dave? That's an awesome question. And it's actually for its front center. For everything we do, obviously, customers one choice and flexibility what they do. And to your point as we evolved warm or as a service, no specific product and product brands and logos on probably the way of the future. It's the services. It's the experience that you provide in regards to how we do that. So if you think about me, you know, in in infrastructure making infrastructure as a service, you really want to define what that customer experiences. That s L. A. That they're trying toe realize. And then how do we make sure that we build the right solutions? Products feature functions to enable that a law that goes back to the core engineering stuff that we need to dio right now, a lot of that stuff is about making sure that we have the right things around. If it's around developer community. If it's around AP rich, it's around. SdK is it's all about how do we leverage if it's internal source or external open source, if you will. It's regards to How do we do that? No. A thing that I think we all you know what you're well aware but we ought to keep in mind is that the cloud native applications are really relevant. Toe both the on premises, wealthy off premise. So think about things around portability reusability. You know, those are some great examples of just kind of how we think about this as we go forward. But those modern applications were required modern infrastructure, and regardless of how that infrastructure is abstracted now, just think about things like this. Aggregation or compose ability or Internet based computing. It's just it's a huge trend that we have to make sure we're thinking of. So is we. We just aggregate between the physical layers to the software layers and how we provide that to a service that could be think of a modern container based asset that could be repurposed. Either could be on a purpose built thing. It could be deployed in a converge or hyper converged. Or it could be two points a software feature in a cloud. Now, that's really how we're thinking about that, regards that we go forward. So we're talking about building modern assets or components That could be you right once we used many type model, and we can deploy that wherever you want because of some of the abstraction of desegregation that we're gonna do. >>E could see customers in the in the near term saying, I don't care so much about the product. I want the fast one all right with the cheaper one e. >>It's kind of what you talking about, that I talked about the ways. If you think about that regards, you know, maybe it's on a specific brand or portfolio. You look into and you say, Hey, what's the service level that I'd wanted to your point like Hey, for compute or for storage, it's really gonna end up being the specific S l A. And that's around performance or Leighton see, or cost or resiliency they want. They want that experience in that that you know, And that's why they're gonna be looking for the end of the end state. That's what we have to deliver is an engineering. >>So there's an opportunity here for you guys that I wonder if you could comment on. And that's the storage admin E. M. C essentially created. You know, you get this army of people that you know pretty good of provisioning lungs, although that's not really that's a great career path for folks. But program ability is, and this notion of infrastructure is code as you as you make your systems more programmable. Is there a skill set opportunity to take that army of constituents that you guys helped train and grow and over their careers and bring them along into sort of the next decade? This new era? >>I think the the easy answer is yes, I obviously that's a hard thing to do and you go forward. But I think embracing the change in the evolution of change, I think is a great opportunity. And I think there is e mean if you look step back and you think about data management, right? And you think about all the you know all data is not created equal and you know, and it has a life cycle, if you will. And so if it's on edge to Korda, Cloward, depending think about data vaults and data mobility and all that stuff. There's gonna be a bunch of different personas and people touching data along the way. I think the I T advance and the storage admin. They're just one of those personas that we have to help serve and way talk about How do we make them heroes, if you will, in regards to their broader environment. So if they're providing, if they evolve and really helped provide a modern infrastructure that really enables, you know infrastructure is a code or infrastructure as a service, they become a nightie hero, if you will for the rest of team. So I think there's a huge opportunity for them to evolve as the technology evolves. >>Yeah, you talked about you know, your families, your employees, your team s o. You obviously focused on them. You got your products going hitting all the marks. How are you spending your time these days? >>Thes days right now? Well, we're in. We're in our cycle for fiscal 22 planning. Right? And right now, a lot of that's above the specific markets were serving. It's gonna be about the strategy and making sure that we have people focused on those things. So it really comes back to some of the strategy tents were driving for next year. Now, as I said, our focus big time. Well, I guess for the for this year is one is consolidation of the core markets. Major focus for May 2 is going to be around winning in storage, and I want to be very specific. It's winning midrange storage. And that was one of the big reasons why Power Store came. That's gonna be a big focus on Bennett's really making sure that we're delivering on the as a service stuff that we just talked about in regards to all the technology innovation that's required to really provide the customer experience. And then, lastly, it's making sure that we take advantage of some of these growth factors. So you're going to see a dentist. Probably talked a lot about Telco, but telco on edge and as a service and cloud those things, they're just gonna be key to everything I do. So if you think about from poor infrastructure to some of these emerging opportunities Z, I'm spending all my time. >>Well, it's a It's a big business and a really important one for Fidel. Jeff Boudreau. Thanks so much for coming back in the Cube. Really a pleasure seeing you. I hope we can see each other face to face soon. >>You too. Thank you for having me. >>You're very welcome. And thank you for watching everybody keep it right there. This is Dave Volonte for the Cube. Our continuing coverage of Del Tech World 2020. We'll be right back right after this short break

>> From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE! Now here's your host, Dave Vellante. >> Hi, everybody, welcome to this Cube Insights, powered by ETR. In this breaking analysis I want to talk to you about what I learned this week at Dell Technology's financial analyst meeting in New York. They gathered all the financial analysts, Rob Williams hosted it, he's the head of IR, Michael Dell of course was there. They had Dennis Hoffman who is the head of strategic planning, Jeff Clarke who basically runs the business and Tom Sweet, of course, who was the star of the show, the CFO, all the analysts want to see him. Dell laid out its longterm goals, it provided much clearer understanding of its strategic direction, basically focused on three areas. Dell believes that IT is getting more complex, we know that, they want to capitalize on that by simplifying IT. We'll talk about that. And then they want to position for the wave of digital transformations that are coming and they also believe, Dell believes, that it can capitalize on the consolidation trend, consolidating vendors, so I'll talk about each of those. And so let me bring up the first slide, Alex, if you would. The takeaways from the Dell financial analyst meeting. Let me share with you the overall framework that Tom Sweet laid out. And I have to say, the messaging was very consistent, these guys were very well-prepared. I think Dell is, from a management perspective, very well-run company. They're targeting three to 5% growth on what they're saying is a 4% GDP forecast. Or sorry, 4%, I have GDP here, it's really 4% industry growth. GDP's a little lower than that obviously. So this is IDC data, Gartner data, 4% industry growth. So that's an error on my part, I apologize. The strategies to grow relative to their competition. So grow share on a relative basis. So whatever the market does, again, not GDP, but whatever the market does, Dell wants to grow faster than the market. So it wants to gain share, that's its primary metric. From there they want to grow operating income and they want to grow that faster than revenue, that's going to throw off cash. And then they're going to also continue to delever the balance sheet. I think they paid down 17 billion in debt since the EMC acquisition. They want to get to a two X debt to EBITA ratio within 18 months. And what they're saying is, you know, they talked about, Tom Sweet talked about this consistent march toward investment-grade rating. They've been talkin' about that for awhile. He made the comment, we don't need to have a triple A rating but we want to get to the point where we can reduce our interest expense, and that will, 'cause they'll drop right into the bottom line. So they talked about these various levers that they can turn, some of them under the P and L, gaining share, some are their operating structure and their organizational structure, and one big one is obviously their debt structure. The other key issue here is will this cut the liquidity discount that Dell faces? What do I mean by that? Well, VMware has about a $60 billion valuation. Dell owns about 80% of VMware, which would equate to 48 billion. But if you look at Dell's market cap, it's only 37 billion. So it essentially says that Dell's core business is worth minus 11 billion. We used to talk about this when EMC owned VMware. Its core business only comprised about 40% of the overall value of the company, in this case because of the high debt, Dell has a negative value. And it's not just the high debt. Michael Dell has control over the voting shares, it's essentially a conglomerate structure, there's very high debt, and it's a relatively low margin business, notwithstanding VMware. And so as a result, Dell trades at a discount relative to what you would think it should trade at, given its prominence in the market, $92 billion company, the leader in every category under the sun. So that's the big question is can Dell turn these levers, drop EBITA or cash to the bottom line, affect operating income, and then ultimately pay down its debt and affect that discount that it trades at? Okay, bring up, if you would, Alex, the next slide. Now I want to share with you the takeaways from the Dell line of business focus. This really was Jeff Clarke's presentations that I'm going to draw from. Servers, we know, they're softer demand, but the key there is they're really faced tough compares. Last year, Dell's server business grew like crazy. So this year the comparisons are lessened. But there's less spending on servers. I'll share with you some of the ETR data. Storage, they call it holding serve, you saw last quarter I did an analysis, I took the ETR data and the income statement, it showed Pure was gaining share at like 22% growth from the income statement standpoint. Dell was 0% growth but is actually growing faster than its competitors. With the exception of Pure. It's growing faster than the market. So Dell actually gained share with 0% growth. Dell's really focused on consolidating the portfolio. They've cut the portfolio down from 80, I think actually the right number is 88 products, down to 20 by May of 2020. They've got some new mid-range coming, they've just refreshed their data protection portfolio, so again, by May of next year, by Dell Technologies World they'll have a much, much more simplified portfolio. And they're gaining back share. They've refocused on the storage business. You might recall after the acquisition, EMC was kind of a mess. It was losing share before the acquisition, it was so distracted with all the Elliott Management stuff goin' on. And kind of took its eye off the ball, and then after the acquisition it took awhile for them to get their act together. They gained back about 375 basis points in the last 18 months. Remember a basis point is 1/100th of 1%. So gaining share and their consistent focus on trying to do that. Their PC business, which is actually doin' quite well, is focused on the commercial segment and focused on higher margins. They made the statement that the PCs are kind of undersupply right now so it's helping margins. There's a big focus in Jeff Clarke's organization on VMware integration. To me this makes a lot of sense. To the extent that you can take the VMware platform and make Dell hardware run VMware better, that's something that is an advantage for Dell, obviously. And at the same time, VMware has to walk the fine line with the ecosystem. But certainly it's earned the presence in the market now that it can basically do what I just said, tightly integrate with Dell and at the same time serve the ecosystem, 'cause frankly, the ecosystem has no choice. It must serve VMware customers. The strategy, essentially, is to, as I say, capitalize on vendor consolidation, leverage value across the portfolio, so whether it's pivotal, VMware integration, the security portfolio, try to leverage that and then differentiate with scale. And Dell really has the number one supply chain in the tech business. Something that Dave Donatelli at HP, when he was at HP, used to talk about. HPE doesn't really talk about that supply chain advantage anymore 'cause essentially it doesn't have it. Dell does. So Jeff Clarke's reorganization, he came in, he streamlined the organization, really from the focus on R and D to product to collaboration across the organization and the VMware integration. I actually was quite impressed with when I first met Jeff Clarke I guess two years ago now, what he and the organization have accomplished since then. No BS kind of person. And you can see it's starting to take effect. So we'll keep an eye on that. The next slide I want to show you, I want to bring in the ETR data. We've been sharing with you the ETR spending intention surveys for the last couple of weeks and months. ETR, enterprise technology research, they have a data platform that comprises 4,500 practitioners that share spending data with them. CIOs, IT managers, et cetera. What I'm showing here is a cut off of the server sector. So I'm going to drill down into server and storage. So these are spending intentions from the July survey asking about the second half of 2019 relative to the first half of 2019. And this is a drill-down into the giant public and private firms. Why do I do that? Because in meeting the ETR, this is the best indicator. So it's big, big public companies and big private companies. Think Uber. Private companies that spend a ton of dough on IT. UPS before it went public, for example. So those companies are in here. And they're, according to ETR, the best indicators. What this chart shows, so the bars show, and I've shared this with you a number of times, the lime green is we're adding, we're new to this platform, we're new adoption. The evergreen is we're spending more, the gray is we're spending the same, the light red or pink is we're spending less, and the dark red is we're leaving the platform. So if you subtract the red from the green you get what's called a net score, and that's that blue line. And this is the overall server spending intentions from that July survey. The end is about 525 respondents out of the 4,500. And this is, again, those that just answered the question on server. So you can see the net score on server spend is dropping. And you can see the market share on server is dropping. The takeaway here is that servers, as a percentage of overall IT spend, are on a downward slope, and have been for quite some time. Back to the January '16 survey. Okay, so that's going to serve us. Let's take a look at the same data for storage. So if, Alex, if you bring up the storage sector slide, You can see kind of a similar trend. And I would argue what's happening here, a couple of things. You've got the CLOB effect, I'll talk about that some more, and you've also got, in this case, the flash, all-flash array effect. What happened was you had all-flash arrays and flash come into the data center, and that gave performance a huge headroom. Remember, spinning disk was the last bastion of mechanical movement and it was the main bottleneck in terms of overall application performance. IO was the problem. Well you put a bunch of flash into the system and it gives a lot of headroom. People used to over-provision capacity just for performance reasons. So flash has had the effect of customers saying, hey, my performance is good, I don't need to over-provision anymore, I don't need to buy so much. So that combined with cloud, I think, has put down the pressure on the storage business as well. Now the next slide, Alex, that I want you to bring up is the vendor net scores, the server spending intentions. And what I've done is I've highlighted Dell EMC. Now what's happening here in the slide, and I realize it's an eye chart, but basically where you want to be in this chart is in the left-hand side. What it shows is the spending intentions and the momentum from the October '18, which is the gray, the April '19, which is the blue, and then the July '19 which is the most recent one. Again, the end is 525 in the servers for the July '19 survey. And you can see Dell's kind of in the middle of the pack. You'd love to be in the left-hand side, you know, Docker, Microsoft, VMware, Intel, Ubuntu. And you don't want to be on the right-hand side, you know, Fujitsu, IBM, is sort of below the line. Dell's kind of in the middle there, Dell EMC. The next slide I want to show you is that same slide for storage. And again, you can see here is that on-- So this is vendor net scores, the storage spending intentions. On the left-hand side it's all the high growth companies. Rubrik, Cohesity, Nutanix, Pure, VMware with vSAN, Veeam. You see Dell EMC's VxRail. On the right-hand side, you see the guys that are losing momentum. Veritas, Iron Mountain, Barracuda, HitachiHDS, Fusion-io still comes up in the survey after the acquisition by Western Digital. Again, you see Dell EMC kind of holding serve in the middle there. Not great, not bad. Okay, so that's kind of just some other ETR data that I wanted to share. All right, next thing we're going to talk about is the macros market summary. And Alex, I've got some bullet points on this, so if you bring up that slide, let me talk about that a little bit. So five points here. First, cloud continues to eat away at on-prem, despite all this talk about repatriation, which I know does happen. People try to throw everything to the cloud and they go, whoa! Look at my Amazon bill, yeah, I get that. That's at the margin. The main trend is that cloud continues to grow. That whole repatriation thing is not moving the on-prem market. On-prem is kind of steady eddy. Storage is still working through that AFA injection. Got a lot of headroom from performance standpoint. So people don't need to buy as much as they used to because you had that step function in performance. Now eventually the market will catch up, all this digital transformation is happening, all this data is flowing through the system and it will catch up, and the storage market is elastic. As NAN prices fall, people will, I predict, will buy more storage. But there's been somewhat of a lull in the overall storage market. It's not a great market right now, frankly, at the macro level. Now ETR does these surveys on a quarterly basis. They're just about to release the October survey, and they put out a little glimpse on Friday about this survey. And I'll share some bullet points there. Overall IT spending clearly is softening. We kind of know that, everybody kind of realizes that. Here's the nuance. New adoptions are reverting to pre-2018 levels, and the replacements are rising. What does this mean? So the number of respondents that said, oh yes, we're adopting this platform for the first time is declining, and the replacements are actually accelerating. Why is that? Well I was at ETR last week and we were talking about this and one of the theories, and I think it's a good one, is that 2016, 2017 was kind of experimentation around digital transformation. 2018, people started to put things into production or closer to production, they were running systems in parallel, and now they're making their bets, they're saying, hey, this test worked, let's put this heavy into production in 2019, and now we're going to start replacing. So we're not going to adopt as much stuff 'cause we're not doing as much experimentation. We're going to now focus and narrow in on those things that are going to drive our business, and we're going to replace those things that aren't going to drive our business. We're going to start unplugging them. So that's some of what's happening. Another big trend is Microsoft. Microsoft is extending its presence throughout. They're goin' after collaboration, you saw the impact that they had on Slack and Slack stock recently. So Slack Box, Dropbox, are kind of exposed there. They're goin' after security, they've just announced a SIM product. So Splunk and IBM, they're kind of goin' after that base. The application performance management vendors. For instance, New Relic. Microsoft goin' after them. Obviously they got a huge presence in cloud. Their Windows 10 cycle is a little slower this time around, but they've got other businesses that are really starting to click. So Microsoft is one of the few vendors that really is showing accelerated spending momentum in the ETR data. Financial services and telcos, which are always leading spender indicators, are actually very weak right now. That's having a spillover effect into Europe, which is over-banked, if I can use that term. Banking heavy, if you will. So right now it's not a pretty picture, but it's not a disaster. I don't want to necessarily suggest this as like going back to 2007, 2008, it's not. It's really just a matter of things are softening and it's, you know, maybe taking a little breath. Okay, so let me summarize the meeting overall. Again, it was a very well-run meeting. Started at 9:00, ended at 12:00, bagged lunch, go home. Nice and crisp. So these guys are very well-prepared. I think, again, Dell is a extremely well-managed company. They laid out a much clearer vision for Wall Street of its strategy, where it's headed. As they say, they're going after IT complexity. I want to make a comment on this. You think about Legacy EMC. Legacy EMC was not the company that you would expect to deal with complexity. In fact, they were the culprit of complexity. One of the things that Jeff Clarke did when he came in, he said, this portfolio's too complex, needs to be simplified. Joe Tucci used to say, overlap is better than gaps. Jeff Clarke said we got too much overlap. We don't have a lot of gaps so let's streamline that portfolio. Taking advantage of vendor consolidation, this is an interesting one. Ever since I've been in this business, which has been quite a long time now, I've been hearing that buyers want to consolidate the number of vendors that they have. They've really not succeeded in doing that. Now can they do that now 'cause there are less vendors? Well, in a sense, yes, there are less sort of on-prem big vendors. EMC's no longer in the market, you don't have companies like Sun and Digital anymore, Compact is gone. HP split in two, but still. You're not seeing a huge number of new vendors, at scale, come into the market. Except you've got AWS and Google as new players there. So I think that injects sort of a new dynamic that a lot of people like to put cloud aside and kind of ignore it and talk about the old on-prem business, but I think that you're going to see a lot of experimentations and workload ins and outs, particularly with AWS and Google and of course Azure, which is in itself, their cloud is almost a separate force. So we'll see how that shakes up. As I say, servers right now, Dell's got a very tough compare. I think Dell will be fine in the server space. Storage, it's all about simplifying the portfolio, they've got a refreshed portfolio focused on regaining share. They've rebranded everything Power, so their whole line is going to be Power by, if it's not already, by May of next year, Dell Technologies World. It's a much more scalable portfolio. And I think Dell's got a lot of valuation levers. They're a $92 billion company, they've got their current operations, their current P and L, their share gains, their cross-company synergies, particularly with VMware, they can expand their TAM into cloud with partnerships like they're doing with AWS and others, Google, Microsoft. The Edge is a TAM expansion opportunity to them. And also corporate structure. You've seen them. VMware acquired Pivotal. They're cleaning that up. I'm sure they could potentially make some other moves. Secureworks is out there, for example. Maybe they'll do some things with RSA. So they got that knob to turn and they can delever. Paying down the debt to the extent that they can get back to investment grade, that will lower their interest rates, that'll drop right to the bottom line, and they'll be able to reinvest that. And Tom Sweet said, within 18 months, we'll be able to get there with that two X ratio relative to EBITA, and that's when they're going to start having conversations with the rating agencies to talk about you know, hey, maybe we can get a better rating and lower our interest expense. Bottom line, did Wall Street buy the story? Yes. But I don't think it's going to necessarily change anything in the near term. This is a show me from Missouri, prove it, execute, and then I think Dell will get rewarded. Okay, so this is Dave Vellante, thanks for watching this Cube Insights powered by ETR. We'll see ya next time. (electronic music)