>> From "theCUBE" studios in Palo Alto, in Boston, bringing you data driven insights from "theCUBE" and ETR. This is "Breaking Analysis" with Dave Vellante. >> There are very few political issues that get bipartisan support these days, nevermind consensus spanning geopolitical boundaries. But whether we're talking across the aisle or over the pond, there seems to be common agreement that the power of big tech firms should be regulated. But the government's track record when it comes to antitrust aimed at big tech is actually really mixed, mixed at best. History has shown that market forces rather than public policy have been much more effective at curbing monopoly power in the technology industry. Hello, and welcome to this week's "Wikibon CUBE" insights powered by ETR. In this "Breaking Analysis" we welcome in frequent "CUBE" contributor Dave Moschella, author and senior fellow at the Information Technology and Innovation Foundation. Dave, welcome, good to see you again. >> Hey, thanks Dave, good to be here. >> So you just recently published an article, we're going to bring it up here and I'll read the title, "Theory Aside, Antitrust Advocates Should Keep Their "Big Tech" Ambitions Narrow". And in this post you argue that big sweeping changes like breaking apart companies to moderate monopoly power in the tech industry have been ineffective compared to market forces, but you're not saying government shouldn't be involved rather you're suggesting that more targeted measures combined with market forces are the right answer. Can you maybe explain a little bit more the premise behind your research and some of your conclusions? >> Sure, and first let's go back to that title, when I said, theory aside, that is referring to a huge debate that's going on in global antitrust circles these days about whether antitrust should follow the traditional path of being invoked when there's real harm, demonstrable harm to consumers or a new theory that says that any sort of vast monopoly power inevitably will be bad for competition and consumers at some point, so your best to intervene now to avoid harms later. And that school, which was a very minor part of the antitrust world for many, many years is now quite ascendant and the debate goes on doesn't matter which side of that you're on the questions sort of there well, all right, well, if you're going to do something to take on big tech and clearly many politicians, regulators are sort of issuing to do something, what would you actually do? And what are the odds that that'll do more good than harm? And that was really the origins of the piece and trying to take a historical view of that. >> Yeah, I learned a new word, thank you. Neo-brandzian had to look it up, but basically you're saying that traditionally it was proving consumer harm versus being proactive about the possibility or likelihood of consumer harm. >> Correct, and that's a really big shift that a lot of traditional antitrust people strongly object to, but is now sort of the trendy and more send and view. >> Got it, okay, let's look a little deeper into the history of tech monopolies and government action and see what we can learn from that. We put together this slide that we can reference. It shows the three historical targets in the tech business and now the new ones. In 1969, the DOJ went after IBM, Big Blue and it's 13 years later, dropped its suit. And then in 1984 the government broke Ma Bell apart and in the late 1990s, went after Microsoft, I think it was 1998 in the Wintel monopoly. And recently in an interview with tech journalist, Kara Swisher, the FTC chair Lena Khan claimed that the government played a major role in moderating the power of tech giants historically. And I think she even specifically referenced Microsoft or maybe Kara did and basically said the industry and consumers from the dominance of companies like Microsoft. So Dave, let's briefly talk about and Kara by the way, didn't really challenge that, she kind of let it slide. But let's talk about each of these and test this concept a bit. Were the government actions in these instances necessary? What were the outcomes and the consequences? Maybe you could start with IBM and AT&T. >> Yeah, it's a big topic and there's a lot there and a lot of history, but I might just sort of introduce by saying for whatever reasons antitrust has been part of the entire information technology industry history from mainframe to the current period and that slide sort of gives you that. And the reasons for that are I think once that we sort of know the economies of scale, network effects, lock in safe choices, lot of things that explain it, but the good bit about that is we actually have so much history of this and we can at least see what's happened in the past and when you look at IBM and AT&T they both were massive antitrust cases. The one against IBM was dropped and it was dropped in as you say, in 1980. Well, what was going on in at that time, IBM was sort of considered invincible and unbeatable, but it was 1981 that the personal computer came around and within just a couple of years the world could see that the computing paradigm had change from main frames and minis to PCs lines client server and what have you. So IBM in just a couple of years went from being unbeatable, you can't compete with them, we have to break up with them to being incredibly vulnerable and in trouble and never fully recovered and is sort of a shell of what it once was. And so the market took care of that and no action was really necessary just by everybody thinking there was. The case of AT&T, they did act and they broke up the company and I would say, first question is, was that necessary? Well, lots of countries didn't do that and the reality is 1980 breaking it up into long distance and regional may have made some sense, but by the 1990 it was pretty clear that the telecom world was going to change dramatically from long distance and fixed wires services to internet services, data services, wireless services and all of these things that we're going to restructure the industry anyways. But AT& T one to me is very interesting because of the unintended consequences. And I would say that the main unintended consequence of that was America's competitiveness in telecommunications took a huge hit. And today, to this day telecommunications is dominated by European, Chinese and other firms. And the big American sort of players of the time AT&T which Western Electric became Lucent, Lucent is now owned by Nokia and is really out of it completely and most notably and compellingly Bell Labs, the Bell Labs once the world's most prominent research institution now also a shell of itself and as it was part of Lucent is also now owned by the Finnish company Nokia. So that restructuring greatly damaged America's core strength in telecommunications hardware and research and one can argue we've never recovered right through this 5IG today. So it's a very good example of the market taking care of, the big problem, but meddling leading to some unintended consequences that have hurt the American competitiveness and as we'll talk about, probably later, you can see some of that going on again today and in the past with Microsoft and Intel. >> Right, yeah, Bell Labs was an American gem, kind of like Xerox PARC and basically gone now. You mentioned Intel and Microsoft, Microsoft and Intel. As many people know, some young people don't, IBM unwillingly handed its monopoly to Intel and Microsoft by outsourcing the micro processor and operating system, respectively. Those two companies ended up with IBM ironically, agreeing to take OS2 which was its proprietary operating system and giving Intel, Microsoft Windows not realizing that its ability to dominate a new disruptive market like PCs and operating systems had been vaporized to your earlier point by the new Wintel ecosystem. Now Dave, the government wanted to break Microsoft apart and split its OS business from its application software, in the case of Intel, Intel only had one business. You pointed out microprocessors so it couldn't bust it up, but take us through the history here and the consequences of each. >> Well, the Microsoft one is sort of a classic because the antitrust case which was raging in the sort of mid nineties and 1998 when it finally ended, those were the very, once again, everybody said, Bill Gates was unstoppable, no one could compete with Microsoft they'd buy them, destroy them, predatory pricing, whatever they were accusing of the attacks on Netscape all these sort of things. But those the very years where it was becoming clear first that Microsoft basically missed the early big years of the internet and then again, later missed all the early years of the mobile phone business going back to BlackBerrys and pilots and all those sorts of things. So here we are the government making the case that this company is unstoppable and you can't compete with them the very moment they're entirely on the defensive. And therefore wasn't surprising that that suit eventually was dropped with some minor concessions about Microsoft making it a little bit easier for third parties to work with them and treating people a little bit more, even handling perfectly good things that they did. But again, the more market took care of the problem far more than the antitrust activities did. The Intel one is also interesting cause it's sort of like the AT& T one. On the one hand antitrust actions made Intel much more likely and in fact, required to work with AMD enough to keep that company in business and having AMD lowered prices for consumers certainly probably sped up innovation in the personal computer business and appeared to have a lot of benefits for those early years. But when you look at it from a longer point of view and particularly when look at it again from a global point of view you see that, wow, they not so clear because that very presence of AMD meant that there's a lot more pressure on Intel in terms of its pricing, its profitability, its flexibility and its volumes. All the things that have made it harder for them to A, compete with chips made in Taiwan, let alone build them in the United States and therefore that long term effect of essentially requiring Intel to allow AMD to exist has undermined Intel's position globally and arguably has undermined America's position in the long run. And certainly Intel today is far more vulnerable to an ARM and Invidia to other specialized chips to China, to Taiwan all of these things are going on out there, they're less capable of resisting that than they would've been otherwise. So, you thought we had some real benefits with AMD and lower prices for consumers, but the long term unintended consequences are arguably pretty bad. >> Yeah, that's why we recently wrote in Intel two "Strategic To Fail", we'll see, Okay. now we come to 2022 and there are five companies with anti-trust targets on their backs. Although Microsoft seems to be the least susceptible to US government ironically intervention at this this point, but maybe not and we show "The Cincos Comas Club" in a homage to Russ Hanneman of the show "Silicon Valley" Apple, Microsoft, Google, and Amazon all with trillion dollar plus valuations. But meta briefly crossed that threshold like Mr. Hanneman lost a comma and is now well under that market cap probably around five or 600 million, sorry, billion. But under serious fire nonetheless Dave, people often don't realize the immense monopoly power that IBM had which relatively speaking when measured its percent of industry revenue or profit dwarf that of any company in tech ever, but the industry is much smaller then, no internet, no cloud. Does it call for a different approach this time around? How should we think about these five companies their market power, the implications of government action and maybe what you suggested more narrow action versus broad sweeping changes. >> Yeah, and there's a lot there. I mean, if you go back to the old days IBM had what, 70% of the computer business globally and AT&T had 90% or so of the American telecom market. So market shares that today's players can only dream of. Intel and Microsoft had 90% of the personal computer market. And then you look at today the big five and as wealthy and as incredibly successful as they've been, you sort of have almost the argument that's wrong on the face of it. How can five companies all of which compete with each other to at least some degree, how can they all be monopolies? And the reality is they're not monopolies, they're all oligopolies that are very powerful firms, but none of them have an outright monopoly on anything. There are competitors in all the spaces that they're in and increasing and probably increasingly so. And so, yeah, I think people conflate the extraordinary success of the companies with this belief that therefore they are monopolist and I think they're far less so than those in the past. >> Great, all right, I want to do a quick drill down to cloud computing, it's a key component of digital business infrastructure in his book, "Seeing Digital", Dave Moschella coined a term the matrix or the key which is really referred to the key technology platforms on which people are going to build digital businesses. Dave, we joke you should have called it the metaverse you were way ahead of your time. But I want to look at this ETR chart, we show spending momentum or net score on the vertical access market share or pervasiveness in the dataset on the horizontal axis. We show this view a lot, we put a dotted line at the 40% mark which indicates highly elevated spending. And you can sort of see Microsoft in the upper right, it's so far up to the right it's hidden behind the January 22 and AWS is right there. Those two dominate the cloud far ahead of the pack including Google Cloud. Microsoft and to a lesser extent AWS they dominate in a lot of other businesses, productivity, collaboration, database, security, video conferencing. MarTech with LinkedIn PC software et cetera, et cetera, Googles or alphabets of business of course is ads and we don't have similar spending data on Apple and Facebook, but we know these companies dominate their respective business. But just to give you a sense of the magnitude of these companies, here's some financial data that's worth looking at briefly. The table ranks companies by market cap in trillions that's the second column and everyone in the club, but meta and each has revenue well over a hundred billion dollars, Amazon approaching half a trillion dollars in revenue. The operating income and cash positions are just mind boggling and the cash equivalents are comparable or well above the revenues of highly successful tech companies like Cisco, Dell, HPE, Oracle, and Salesforce. They're extremely profitable from an operating income standpoint with the clear exception of Amazon and we'll come back to that in a moment and we show the revenue multiples in the last column, Apple, Microsoft, and Google, just insane. Dave, there are other equally important metrics, CapX is one which kind of sets the stage for future scale and there are other measures. >> Yeah, including our research and development where those companies are spending hundreds of billions of dollars over the years. And I think it's easy to look at those numbers and just say, this doesn't seem right, how can any companies have so much and spend so much? But if you think of what they're actually doing, those companies are building out the digital infrastructure of essentially the entire world. And I remember once meeting some folks at Google, and they said, beyond AI, beyond Search, beyond Android, beyond all the specific things we do, the biggest thing we're actually doing is building a physical infrastructure that can deliver search results on any topic in microseconds and the physical capacity they built costs those sorts of money. And when people start saying, well, we should have lots and lots of smaller companies well, that sounds good, yeah, it's all right, but where are those companies going to get the money to build out what needs to be built out? And every country in the world is trying to build out its digital infrastructure and some are going to do it much better than others. >> I want to just come back to that chart on Amazon for a bit, notice their comparatively tiny operating profit as a percentage of revenue, Amazon is like Bezos giant lifestyle business, it's really never been that profitable like most retail. However, there's one other financial data point around Amazon's business that we want to share and this chart here shows Amazon's operating profit in the blue bars and AWS's in the orange. And the gray line is the percentage of Amazon's overall operating profit that comes from AWS. That's the right most access, so last quarter we were well over a hundred percent underscoring the power of AWS and the horrendous margins in retail. But AWS is essentially funding Amazon's entrance into new markets, whether it's grocery or movies, Bezos moves into space. Dave, a while back you collaborated with us and we asked our audience, what could disrupt Amazon? And we came up with your detailed help, a number of scenarios as shown here. And we asked the audience to rate the likelihood of each scenario in terms of its likelihood of disrupting Amazon with a 10 being highly likely on average the score was six with complacency, arrogance, blindness, you know, self-inflicted wounds really taking the top spot with 6.5. So Dave is breaking up Amazon the right formula in your view, why or why not? >> Yeah, there's a couple of things there. The first is sort of the irony that when people in the sort of regulatory world talk about the power of Amazon, they almost always talk about their power in consumer markets, whether it's books or retail or impact on malls or main street shops or whatever and as you say that they make very little money doing that. The interest people almost never look at the big cloud battle between Amazon, Microsoft and lesser extent Google, Alibaba others, even though that's where they're by far highest market share and pricing power and all those things are. So the regulatory focus is sort of weird, but you know, the consumer stuff obviously gets more appeal to the general public. But that survey you referred to me was interesting because one of the challenges I sort of sent myself I was like okay, well, if I'm going to say that IBM case, AT&T case, Microsoft's case in all those situations the market was the one that actually minimized the power of those firms and therefore the antitrust stuff wasn't really necessary. Well, how true is that going to be again, just cause it's been true in the past doesn't mean it's true now. So what are the possible scenarios over the 2020s that might make it all happen again? And so each of those were sort of questions that we put out to others, but the ones that to me by far are the most likely I mean, they have the traditional one of company cultures sort of getting fat and happy and all, that's always the case, but the more specific ones, first of all by far I think is China. You know, Amazon retail is a low margin business. It would be vulnerable if it didn't have the cloud profits behind it, but imagine a year from now two years from now trade tensions with China get worse and Christmas comes along and China just says, well, you know, American consumers if you want that new exercise bike or that new shoes or clothing, well, anything that we make well, actually that's not available on Amazon right now, but you can get that from Alibaba. And maybe in America that's a little more farfetched, but in many countries all over the world it's not farfetched at all. And so the retail divisions vulnerability to China just seems pretty obvious. Another possible disruption, Amazon has spent billions and billions with their warehouses and their robots and their automated inventory systems and all the efficiencies that they've done there, but you could argue that maybe someday that's not really necessary that you have Search which finds where a good is made and a logistical system that picks that up and delivers it to customers and why do you need all those warehouses anyways? So those are probably the two top one, but there are others. I mean, a lot of retailers as they get stronger online, maybe they start pulling back some of the premium products from Amazon and Amazon takes their cut of whatever 30% or so people might want to keep more of that in house. You see some of that going on today. So the idea that the Amazon is in vulnerable disruption is probably is wrong and as part of the work that I'm doing, as part of stuff that I do with Dave and SiliconANGLE is how's that true for the others too? What are the scenarios for Google or Apple or Microsoft and the scenarios are all there. And so, will these companies be disrupted as they have in the past? Well, you can't say for sure, but the scenarios are certainly plausible and I certainly wouldn't bet against it and that's what history tells us. And it could easily happen once again and therefore, the antitrust should at least be cautionary and humble and realize that maybe they don't need to act as much as they think. >> Yeah, now, one of the things that you mentioned in your piece was felt like narrow remedies, were more logical. So you're not arguing for totally Les Affaire you're pushing for remedies that are more targeted in scope. And while the EU just yesterday announced new rules to limit the power of tech companies and we showed the article, some comments here the regulators they took the social media to announce a victory and they had a press conference. I know you watched that it was sort of a back slapping fest. The comments however, that we've sort of listed here are mixed, some people applauded, but we saw many comments that were, hey, this is a horrible idea, this was rushed together. And these are going to result as you say in unintended consequences, but this is serious stuff they're talking about applying would appear to be to your point or your prescription more narrowly defined restrictions although a lot of them to any company with a market cap of more than 75 billion Euro or turnover of more than 77.5 billion Euro which is a lot of companies and imposing huge penalties for violations up to 20% of annual revenue for repeat offenders, wow. So again, you've taken a brief look at these developments, you watched the press conference, what do you make of this? This is an application of more narrow restrictions, but in your quick assessment did they get it right? >> Yeah, let's break that down a little bit, start a little bit of history again and then get to Europe because although big sweeping breakups of the type that were proposed for IBM, Microsoft and all weren't necessary that doesn't mean that the government didn't do some useful things because they did. In the case of IBM government forces in Europe and America basically required IBM to make it easier for companies to make peripherals type drives, disc drives, printers that worked with IBM mainframes. They made them un-bundle their software pricing that made it easier for database companies and others to sell their of products. With AT&T it was the government that required AT&T to actually allow other phones to connect to the network, something they argued at the time would destroy security or whatever that it was the government that required them to allow MCI the long distance carrier to connect to the AT network for local deliveries. And with that Microsoft and Intel the government required them to at least treat their suppliers more even handly in terms of pricing and policies and support and such things. So the lessons out there is the big stuff wasn't really necessary, but the little stuff actually helped a lot and I think you can see the scenarios and argue in the piece that there's little stuff that can be done today in all the cases for the big five, there are things that you might want to consider the companies aren't saints they take advantage of their power, they use it in ways that sometimes can be reigned in and make for better off overall. And so that's how it brings us to the European piece of it. And to me, the European piece is much more the bad scenario of doing too much than the wiser course of trying to be narrow and specific. What they've basically done is they have a whole long list of narrow things that they're all trying to do at once. So they want Amazon not to be able to share data about its selling partners and they want Apple to open up their app store and they don't want people Google to be able to share data across its different services, Android, Search, Mail or whatever. And they don't want Facebook to be able to, they want to force Facebook to open up to other messaging services. And they want to do all these things for all the big companies all of which are American, and they want to do all that starting next year. And to me that looks like a scenario of a lot of difficult problems done quickly all of which might have some value if done really, really well, but all of which have all kinds of risks for the unintended consequence we've talked before and therefore they seem to me being too much too soon and the sort of problems we've seen in the past and frankly to really say that, I mean, the Europeans would never have done this to the companies if they're European firms, they're doing this because they're all American firms and the sort of frustration of Americans dominance of the European tech industry has always been there going back to IBM, Microsoft, Intel, and all of them. But it's particularly strong now because the tech business is so big. And so I think the politics of this at a time where we're supposedly all this great unity of America and NATO and Europe in regards to Ukraine, having the Europeans essentially go after the most important American industry brings in the geopolitics in I think an unavoidable way. And I would think the story is going to get pretty tense over the next year or so and as you say, the Europeans think that they're taking massive actions, they think they're doing the right thing. They think this is the natural follow on to the GDPR stuff and even a bigger version of that and they think they have more to come and they see themselves as the people taming big tech not just within Europe, but for the world and absent any other rules that they may pull that off. I mean, GDPR has indeed spread despite all of its flaws. So the European thing which it doesn't necessarily get huge attention here in America is certainly getting attention around the world and I would think it would get more, even more going forward. >> And the caution there is US public policy makers, maybe they can provide, they will provide a tailwind maybe it's a blind spot for them and it could be a template like you say, just like GDPR. Okay, Dave, we got to leave it there. Thanks for coming on the program today, always appreciate your insight and your views, thank you. >> Hey, thanks a lot, Dave. >> All right, don't forget these episodes are all available as podcast, wherever you listen. All you got to do is search, "Breaking Analysis Podcast". Check out ETR website, etr.ai. We publish every week on wikibon.com and siliconangle.com. And you can email me david.vellante@siliconangle.com or DM me @davevellante. Comment on my LinkedIn post. This is Dave Vellante for Dave Michelle for "theCUBE Insights" powered by ETR. Have a great week, stay safe, be well and we'll see you next time. (slow tempo music)

(uplifting music) >> Welcome to this CUBE conversation. In this segment, we're going to talk about the future of IoT and the critical role semiconductor technology plays in shaping this exciting space. As we've reported on our Breaking Analysis segments, the fabulous chip company enabled by the ARM ecosystem has permanently changed the semiconductor industry. Intel's fateful decision in the mid-2000s to pass on the chip design for the Apple iPhone was an ironic reminder of IBM's decision to outsource the microprocessor for the original IBM PC to Intel. In both cases, the market leader didn't appreciate the tectonic industry shifts that were possible, and importantly, the impact that volume economics would have on the power structure of the entire industry. Now fast forward today, and we believe ARM wafer volumes are 10X those of the general purpose x86. This means that the ARM ecosystem is on a cost curve that is unmatched in the business. Moreover, as we've reported, the ARM ecosystem is blowing away the historical performance curves that we've seen in the chip industry, AKA Moore's law. Whereas for years, the x86 performance curve grew roughly at 40% per annum has now moderated to the low thirties. Over the past five years, as evidenced by the progression of Apple's A series chip, based on ARM, when you observe the combined performance of the CPU, the GPU, the NPU, the XPU, DSPs, accelerators, et cetera, the alternative processors in combination have driven the average annual performance improvement to over a hundred percent per year. This is an astounding achievement. Why is this so important to IoT? Well, the edge is projected to be the next trillion dollar market. We believe we'll see a world with more than a trillion devices. And as we've reported, IoT use cases are going to require specialized and distributed processing power. And lots of it. AI Inference at the edge will enable real-time action and embedding intelligence in the chips that when the edge will be high performance, low power, inexpensive, and programmable with a much faster time to market profile than historical semiconductor cycles. We're already seeing that with companies like AWS, Apple, Tesla, and peer, and others going from design to tape out and under two years versus the historical norm of let's say four years to be generous. And with me to discuss innovation in IoT and some big news from the 2021 ARM's summit is Mohamed Awad, who is the vice president of IoT and embedded at ARM Mohamed. Good to see you. Thanks for coming on. >> Thank you. Thanks. I really appreciate the opportunity to have you. >> So, You're welcome. So tell us about your, your role at ARM. I know you were responsible for infrastructure previously and now sort of extended to, to IoT and embedded. Tell us more about. >> Yeah, sure. So I've been with ARM for a little over three years now. I started working with the infrastructure team when I was, we worked on a lot of different initiatives and one of the things that we launched was on Neo verse. And we went on to do some interesting things there, as, as I mentioned, we're making some great traction in the infrastructure space, but a year ago I took on the role to you ought to head up arms IOT and embedded business. And, you know, it's, it's interesting because my, my career really started in IOT and embedded. I was in the Boston area working for companies like Lucent Nortel, and then eventually I remembered very early IOT startup. So that was, that was 25 years ago now. But, but I still got roots in the Boston area. So I like your, like your hat in the back now. >> Yeah. Right. Go, go Sox. >> Go Sox. >> So how did we get here, you mean, you've had a lot of experience in embedded IOT, which is relatively new term to most people. It sort of evolved from a period of, you know, you had instrumentation for at least some components of, of the system. And then we focused on conductivity. But as I was saying in my upfront narrative, we're really now embedding AI and it's it's intelligence, but so there's phases. How do you see the progression in terms of how we got to where ARM is today in IOT? >> Yeah, it's really interesting because if you think about, if you think about ARM, then you really just think about IOT, you know, as you said, IOT started off with, Hey, let's, let's stick a microcontroller in everyday devices, you know, stick a micro controller to something like a vending machine, and then we went on and said, well, hey, what if we could remotely control that device for gathering data from that device, and then we, so we entered this phase of, you know, what we like to call interconnectivity, right, And that was all about, you know, connecting these devices with, with things like, you know, low power Bluetooth, or, you know, even now low latency 5G. And what's interesting is that, you know, together the work of the Arm ecosystem has done over the years has really solved the problems of how to add microcontrollers that connects the devices. I mean, that those problems have largely been solved for a lot of the reasons that you described earlier, which is, you know, we focused on lowering the barrier for folks to come in and innovate around sort of a core technology and, and lots of innovation happened as a result of that. We're entering this new phase now, which is really about, you know, you've got all these devices out there which can easily be connected, they've got microcontrollers or, or, or technology in them, which allows them to, to be intelligent. But how do we really extract the level of kind of AI intelligence out of those devices? Ultimately, what we're trying to do is, is, you know, the industry needs to figure out how to derive intelligence from the smallest sensor, all the way up to the largest cloud data center, you know, and, and, and that means local intelligence. It means regional intelligence, and it means global intelligence, you know, the potential is enormous, but the challenge is pretty enormous as well because of all those diversified use cases, all the diversified devices, all the, all of the sort of scale sort of number of platforms that we're talking about, and that that's really what, we're, what we're excited to kind of go work on, work on that. >> It is exciting. I mean, just the it's mind boggling the, the capabilities, the processing capabilities of this distributed world that we're, we're, we're evolving towards. Let's talk about the hard news of why are you announcing what you're announcing, I mean, what are the trends that are sort of informing that maybe you could hit some of the highlights of the announcement and give us a key details? >> Yeah, sure. So, so when we announced his ARM, total solutions for IOT, and that's really made up of three things, my favorite part is on virtual hardware. Our virtual hardware is all about making available a virtual representation of, of devices in the cloud for lots of developers to use. And I'll, I'll get to that in a minute, but I think, you know, in order to understand that you have to kind of understand the broader context of what ARM total solutions are. It starts with pre-integrated pre verified IP package. You talked earlier about how design cycles we're looking to accelerate people were looking to develop a Silicon much faster. Part of what we were doing at ARM is we're actually taking, you know, pre-integrated pre verified IP packages and call those ARM corstone. We're making those available to the market. So we give those to our Silicon partners, and then they can use that. They might include an neuro processing unit, a CPU. They might include the interconnect, all the, kind of the base IP. And then our Silicon partners can use that as a jumping off point so that they can quickly get Silicon to market. That's the first part of the news, which is, you know, we're doubling down on that too. Now, you know, in the last three years, we've had over 150 different designs, which have used our ARM core stone products. So moving forward, we're going to make that foundational to how we deliver IOT technology to the market. But the second part of it, which is, which is super exciting, is that not only are we going to accelerate the time to market for our Silicon partners, we're also making a virtual representation of that underlying core stone design available in the cloud for software developers all around the world to use at the same time that IP is ready. So at the same time, we hand IP to our Silicon partners. We're making a virtual representation in the cloud. So software developers can start. Now, let me just take a step back here and make sure that, you know, everyone kind of understands how, how big of a deal this is, right before the way this used to work, I would hand the IP to a Silicon partner. It would take them, you know, 18 months, maybe two years to get a piece of Silicon in market. And then a board manufacturer would have to go off. And then only maybe three or four years later, could the software developers start five years to get a product to market what we're doing here with ARM total solutions. We cut that five years down to three years, so we can massively accelerate time to market. And then the third part of what ARM total solution is, is something we call projects Centaury Project Centaury is about putting in place a set of standards to it's an ecosystem initiative, which puts in place a set of standards, reference software and, and specifications around things like security and how devices should communicate with, with, you know, the operating system or cloud service providers that allows that allows software developers to get a level of reuse and leverage. So, you know, today in the IOT, every time you develop a piece of software, you're going to develop it over and over again. But what we're talking about here is they can develop it once and, and be able to apply. And we use a lot of that software over and over again, the same way they do in other markets like infrastructure. >> Love it. So, okay. I want to ask you if that, if there's a blueprint there that we can, we can learn from, but before we do that. So if I, if I go back to the three items that you mentioned, so for example, one of your licensees can say, okay, I want to take just the standard components, the CPU, whatever, but I might want to customize the neural processing unit, as you said, and they have the flexibility to do that at the same time when they, when they bring it to the Foundry, because it's a standard platform that, you know, what's going to work, that's kind of a nuance that maybe people maybe don't fully appreciate, but am I getting that right? That standard platform has dramatically changed the industry. >> Yeah, that's right. I mean, the idea is, is that, you know, we take these, these IPS, we integrate them together. We verify them, we designed it as a subsystem. We target specific use cases, and then we make them available. Our partners are certainly free to go off and make modifications to it. They see fit. But when we hand it to them, it's ready to go. And that's the idea. >> Yeah. And then the point about the being able to, to give developers access in the cloud, and we've often said that, you know, the developers are going to shape IOT. And so I think what you're saying is essentially instead of this linear process, where you can get dependent on the previous one being done, you're actually parallelizing. If you will, the innovation. >> Yeah. That's exactly right. And I, and I'd actually take it one step forward. There's a, there's a subtlety there, which I didn't comment on, which I think it's important to call out, which is not only are we parallelize them, but we're enabling what I'll call modern development methodology. Right. You know, the way that development is done in areas like mobile and the cloud data centers, they use agile workflows, things like continuous integration, you know, broad-based testing as they go along. That's very different than the way that embedded development is done today. Embedded development today is done the same way. It was 25 years ago. You get a board on your desk, you mess around with a bunch of jumpers and cables and wires, hope you did it right. And then you write your software and you hope the hardware guy doesn't want to revise the hardware because then you're going to start all over again. Right. You know, the last thing that you'd want to do is set up a hardware form, right? Lots and lots of different hardware to go off and test over and over again. Now with virtual hardware, you can move all of that to the cloud. All that complexity goes away and you've massively reduced the investment required for software developers to get going and allow them to take on these more modern techniques. >> Well, Mohammed, thank you for clarity clarifying that, that nuance, because we're going to see a Renaissance in the way that that embedded development occurs. And I'm curious as to how you think about that in terms of you, because you're going to have a whole new breed of developers come in with, you know, the cloud developers, if you will. They have, they see IOT as a massive opportunity as well. You're going to see the, I would presume the embedded ecosystem. Up-skill a much in the same way you're seeing, you know, ops dev or dev ops or IT people, you know, learn Python to you know, to up-skill. And so you're going to see like a two vectors of innovation in terms of developers coming together. How do you see that? >> Yeah, that's exactly right. And that's exactly what we're driving to. And when we talk about this, we talk about changing the economics of IOT. That's exactly why, because what we, what we're saying is that, Hey, you can have all this massive innovation that can be unleashed from all these developers that didn't have access to these devices before. And you can also take all these embedded devices, embedded developers and make them so much more efficient with these new modern, modern development methodologies. A combination of those two things is going to, you know, not only is it going to lower the cost of development, but it's going to spur a massive amount of new innovation and all, you know, all new products and services, right. We really think can unleash the potential of IoT. >> So step back a little bit, help us understand kind of how you came to this, your strategy. You mean, what were the friction points or what are the friction points that you see in IOT and embedded in terms of being able to, to, to, to scale this capability? >> Yeah. Yeah. It's a good, it's a great question. And I got to tell you, we, we, when so when we, when I came, when I came into this role, you know, the first thing you do is you go off and talk to customers and partners, and you try to understand how people are using. But most of the time, when people think of ARM, they think of us as, Hey, they're the guys that are off talking to the Silicon partners are talking to the hardware guys. And we absolutely do. We have strong relationships with all of the Silicon partners, but because of our place in the ecosystem, you know, as a, as a company, which, you know, we've got shipped over 70 billion cortex spend devices today, you know, we underpinned, you know, the IOT basically runs on us. And so a lot of what we do too, is we talked to the software ecosystem. We talked to OEMs, and we talked to service providers looking to capitalize on all of that, you know, on the, on the depth and breadth of our ecosystem. And when I talked to OEMs, and when I talked to software service providers, two things became really clear. The OEM is wanting to find a faster path to market. They're like, it just takes too long for us to get our products to market. We need to figure out how to streamline it. So that was one. When I talked to the software service providers, they came to us with a little bit of a different problem. What they said is like, Hey, we really want to deploy software and services across this, this IOT edge space, but it's just so diverse. And so massively complex, you know, everybody's got a different view on thing. Can you help us, like, where's the, your, the common denominator, can you help us figure out how to attack this problem? And that's really what drove, what drove us. Right. >> Awesome. Let's talk a little bit more about some of the announcement, details, project Centaury particular, what are some of the things that you want people to really appreciate, and specifically, what does it mean to the ecosystem? I mean, you touched on it a little bit, but I don't know if you have any examples or customers and, and, and maybe also Mohamed, if you could help us understand how it relates to other arm projects like Cassini. >> Yeah, sure. So project, so, so, so two things. So first of all, let me just talk to what, what, what projects Centaury. So project Centaury is really looking to, you know, help enable a level of, of software leverage across that diverse M class devices that are out there in class with our microcontroller devices that are out there. And so it's really made up of 3, 3, 3 parts. One part is, is all about security. So it uses a PSA and our PSA certified framework, including TFM trusted firmware. So this is our security framework that we've put forward. And then our, the PSA standards initiative that's out there in the marketplace, you know, in all of the efforts that we bring to bear on that, the second part of it is, is around open CMSIS, and, and open CDI CMSIS, which is really, which is really about standardizing aspects about how software is delivered to an IOT device packaged and delivered. It's also about things like how any our thoughts. So any real-time operating system or any cloud service provider, you know, can be accessed from the device. So the idea is, is that a, you know, today, if you think about the way that this works, if you're a Silicon provider, you're a fiber manufacturer, you have to go off and support multiple different clubs, service providers. You may want to support multiple different operating systems, depending on you know, which, which, you know, which particular OS you're interested in. And, and what we're trying to do with, with, with, with projects Centaury is to specify key attributes of the services that exist down on your, on your Silicon, so that you can more easily integrate with, you know, whatever OS you want, whatever service provider you want on whatever hardware you want. It's still allowing plenty of differentiation. So it's not like we're saying, Hey, this is how you actually do over the air updates. For example, rather, what it's saying is that, Hey, this device supports over the updates. If you're going to ask for that service, here's how you present yourself. And that allows a level of software portability that you just didn't have in the IOT space previously. >> Right. And then the licensee can tune that to their specific use case and add their own value. Right. And so, again, go back to the thing we talked about before they, they know what's going to work and they can give it to the, Foundry and say, make this according to the spec and the Foundry's ready for it. That's how we've seen such massive volumes. I want to ask you about security. You, you touched on that. Do you leverage realms in this, or is that not in scope? Is that like. >> No, that's more of a, that right now, that's more focused on our A-class and V9 stuff. And you actually asked about project Cassini a little bit earlier. You know, project Cassini is really our initiative, which is focused on our A-class devices. So our A-class devices typically run a, you know, what I'll call a rich OS like a Linux or whatever. And it's really designed for allowing the level of virtualization and allowing a level of, of, of, of, of shared resources between different containers on, on an A-class type system that you can easily deploy and, and leverage the A-class device resources from, by, by different, by different workloads. >> The reason I asked, I'm trying to Mohamed connect the dots between mobile as kind of a blueprint, which can occur for IOT. I think that's maybe, but even some of the stuff that's going on in the data center, it's particularly as it relates to data intensive workloads, some of the work that we've seen that, you know, AWS do, and, you know, offloads, we're seeing, you know, all the new, like all the modern storage and networking and security offloads in the data center are moving to ARM. And it just seems like the use cases for ARM are exploding. And I'm wonder if he can help us connect the dots into IOT, which could, which could do or follow all of these markets. >> Yeah. I mean, what's interesting what we saw happen in mobile and what we saw happen in the infrastructure, what we see happening in both of those markets is that by creating a level of consistency in how software can be deployed on these devices, whether that's with the, you know, with the mobile phone and the ARM ecosystem and a mobile phone, or all the way through to the data center, what you've done is you unleashed a tremendous amount of innovation, you know, in the mobile space. There's something like 3 million apps out there today, right. And thousands of different smartphone models, you know, could you imagine if every one of those app developers had to test their application on every mobile phone in order to be sure that it worked, you know, you'd have a lot less innovation, a lot less, you know, a lot less, a lot less scale and a lot less, a lot less applications. So what we're talking about here is trying to unleash that same amount of value by creating that consistent. So that's a clear lesson we learned from, from both mobile and from, from infrastructure. The other thing that's clear is that a lot of these markets you've got, back to the idea of, of parallelized development flows and, and subsystems, and that's directly kind of what we're seeing in, in what we're putting forth in, with, ARM total solutions. >> Yeah. You know, it's kind of buzz wordy and people who watch my program know I'm a kind of a fan of the R model, but, but you talk about the new IOT economy. In my view, you're actually an underpinning of that economy. I mean, everybody talks about it, this multi-trillion dollar opportunity, but, but how do you think about this, this new economy? And we've obviously touched on it, but IOT, the edge it's really taking, taking shape now and becoming real. >> Yeah. I, I think that the idea here, when we talk about a new IOT economy, very clearly what I'm referring to is this idea that, you know, you've got today, you've got a lot of potential, which is lost because, you know, your you're limited to just the, a vertically integrated solution. Software is vertically integrated on the, on the specific hardware and the, the barriers and the cost to investing in that hardware from a software perspective is just, it's just too high given, given the sort of scale that you get with that software after the fact. So we're addressing that in two vectors or simplifying it, so that lots of different developers, you know, that developer that's sitting at the coffee shop can spin up an AWS instance with our ARM virtual hardware on it and write an app while they're sitting there. And at the same time, they can access a much broader set of devices than they would've been able to otherwise, if it's not, you know, it's not dissimilar, you know, I hate to keep going back to mobile, but it's not dissimilar from the mobile space where if you think about 15 years ago, when all of the applications that were written on your mobile phone were written by the phone manufacturer, you had a limited number of applications, and sure a phones were a great thing, but it was nothing like it is today. It was a mobile phone economy. Today, when you think about mobile, you know, mobile really underpins the financial economy. It underpins, you know, transport, the transportation economy. It underpins how we communicate with everybody, with social networks and it, and it's really taken a sort of life of its own in lots of different ways. It's not really a mobile economy. It is the economy. And we think IOT can be even larger than that. Right? >> Yeah. You know what I mean? Our industry has a tendency to hype a lot of new waves, but they certainly didn't, over-hype mobile. I mean, everybody, you know, migrated toward mobile. That's why I think it's such a relevant conversation. And so adaptable to IOT at the cloud as well, data as well. You know, they, they were probably under hyped. If anything, social, maybe we can put over here in a bucket, there's a lot, a lot of Friction. But those other three in terms of sort of enterprise and the edge. And I think, you know, from, from what we can see ARM has really in the ecosystem has, has completely and permanently altered the shape of the industry. It's a very exciting time. And I think the best is yet to come Mohamed. I really appreciate you coming to the cube. Thanks so much. >> No, I, I really, I really appreciate, I think thanks for taking the time. All right. >> Thank you for watching this CUBE conversation. This is Dave Vellante. We'll see you next time. (casual uplifting music)

>> Live from Orlando, Florida its theCUBE covering Enterprise Connect 2019. Brought to you by Five9. >> Hello from Orlando, Lisa Martin with Stu Miniman theCUBE. We are live, day three at Enterprise Connect 2019. We have been in Five9's booth all week and we're very excited to welcome to the program for the first time Harry Moseley the CIO of Zoom Video Communications. Harry thanks so much for joining Stu and me on The CUBE today. >> Lisa, Stu its a pleasure to be here, thank you for having me. >> And you're a hall of famer, you have been inducted into the CIO Magazine's hall of fame and recognized as one of the world's top 100 CIO's be Computer World >> Yes that's right >> So we're in the presence of a VIP >> (chuckles) Well thank you for that it's, as I say its all credit back to the wonderful people that have supported me throughout my career. And I've worked with some amazing people and leaders and, who have supported me and the visions that I've created for their organizations. And so, I understand its about me but it's also about the great teams that I've worked with in my past. I can't make this stuff up, yep. >> Harry, we love talking to CIO's especially one with such a distinguished career as yours 'cause the role of CIO has gone through a lot of changes. IT has gone through a lot of changes. You know we've been doing this program for nine years. Remember reading Nick Carr's IT, does IT matter? And you know, we believe IT matters more than ever Not just IT, the business, the relationship maybe give us a little more of your view point as to the role of the CIO and technology, at a show like this. We hear about the CMO and the business and IT all working together. >> Yeah so its actually, in my opinion, there's never been a better time to be a CIO, irrespective of the company you are in, whether its a tech company like where I'm, you know Zoom Video Communications or any one of the prior companies I worked for, professional services, financial services. But even when you think about it like trucking, You think about trucking as an industry, you think about trucking as a company, its like it was a very sort of brick and mortars? But now its all about digital, right? A friend of mine runs a shipping container company and to think that they load five miles of wagons every day. And so I said to him, "how long does it take to load a wagon on a truck?" "It takes four minutes, and you know what Harry, "we're working that down to three. "And that'll increase our revenue by 20 to 25 percent.' And so its just fantastic. And the pace of change, you know it's just growing exponentially. It's just fascinating, the things that we can actually do today we only dreamed about them a year ago. And you think about it sort of' I can't wait to be back here next year, 'cause we're going to just lift the roof off this place in terms of the capabilities. And so its fantastic, yeah it's just absolutely fantastic. >> So looking at, a lot of us know Zoom for video conferencing and different things like that, but you said something very interesting in your fireside chat this morning that I hadn't thought about, and that is when, either going from audio to video, when you're on a video chat you really can't or shouldn't multi-task. So in terms of capturing peoples attention, enabling meetings to happen maybe more on time, faster, more productive. Thought that was an interesting realization, I thought, you're right. >> It just clicks, it just works. You know mobile, you know when I go back to my you know sort of' going back and again, thank you for the recognition from the key note. But when I go back earlier in my career it's like dialing that number, dialing that ten digit number, misdialing that number, what happened? I got to' hang up, I got to' get a dial tone, I got to' dial the numbers again. Now I'm like two minutes late and I know I'm late more often than I'd like, but when its late because of something like that, that's frustrating. That's really frustrating. And so the notion that you can just click on your mobile device, you can click on your laptop, I have no stress anymore, in joining meetings anywhere. I love telling the story about how I had a client meeting, I was in O'Hare Airport and I joined the client prospect meeting. I joined the prospect meeting on my phone using the free wifi service at O'Hare Airport. Put up my virtual background on my phone I just showed you this Stu, with our logo shared the content off of my phone 18 minutes into this 30 minutes call, the person I was talking to, the CIO for this firm called a halt to the meeting. This is what exactly what happened. Enough, I've heard enough. (announcement in background) >> Keep going. >> Keep going, okay. Enough, I didn't know what enough meant. And so I was a little spooked by that if you will. He goes, "you're on a phone, you're in O'Hare Airport, "you've got a virtual background, "you're sharing content, its all flawless. "Its like this is an amazing experience "that we can't get from all the technology "investment we've done in this space "for our company. "So guys, enough. "We're starting a proof of concept on Monday. "No more discussions about it. "Harry, looking forward to being a business partner." >> Does it get better than that? >> It doesn't get better than that. Its like you know, you hop through security, you get on a plane, and its cruisin' all the way home. >> Yeah I mean Harry, I do have to say, you know disclaimer, we are Zoom customers I'm actually a Zoom admin and its that simplicity that you've built into it is the experience, makes it easy. >> And then when you, and Stu, sorry to interrupt you but I got really excited about this stuff as you can tell. But, and then you look at the enterprise. So you're admin? You get into the enterprise management portal and its like Stu, I had a really bad experience. Oh let me look that up, oh yeah, okay. Where were you? You know, I was in outer Mongolia Ah okay, about five minutes into the call you had some packet loss, its like yeah it wasn't. But it still maintains the connection, right? So you can actually, so our Enterprise Management Portal is awesome. >> Yeah so that actually where I was going with the question, is you know I remember back, I actually worked for Lucent right after they spun out from AT&T. And we had videos talking about pervasive video everywhere, in my home in the business. Feels like we're almost there but still even when I have a team get together my folks that live in Silicon Valley, their connectivity's awful. You know when they have their, and its like oh well my computer or my phone don't have the cycles to be able to run. Maybe we have to turn off some of the video Are we getting there, will 5G solve some of these issues? Will the next generation of phones and computers keep up with it? Because it's, I'm sure you can guess we're big fans of video. It's a lot of what we do. >> Because video is the new voice, right. We like video. If I can only hear you and I can't see you, then when I make a statement I can't see you nodding. If I say something you like, you nod. So we get that concurrency of the experience Again it comes back Stu, where were we a year ago? The capabilities we had, where will we be a year from today? Whether its AI, whether its the power in the device in front of us whether its the network, you know, 5G is becoming a reality. It's going to take some time to get there but you've got sort of great technologies and capabilities, that you know, you look at the introduction of our real-time transcription services. I mean how cool is that? I'm sure there's lots of questions, so lots of people would ask about that real-time transcription in terms of, well what's next? I'm not going to talk about what's next. But as they say in life, watch this space. >> Yeah, just you made some announcements at the show with some partners I actually believe Otter AI is one of the ones you mentioned there. I got a demo of their thing, real time, a little bit of AI built in there. Can you talk about some of those partnerships? >> Yeah so we have great, we love our partnerships right? Whether its on the AI space, with Apple and Siri and Amazon and Otter. We also love our partnerships with Questron and Logitek and HP, and Polly of course. Again its the notion of, we have terrific software. You guys realize that, right? Its terrific software, proprietary QOS proprietary capabilities, its like its a fantastic experience every time on our software. These partners have great technologies too. But they're more on the hardware side, we are software engineers at our core. As Andreson said, I think it was about ten years go, "software is the easing thing in the world "so you take terrific software "you imbed it in terrific hardware "with terrific partners and what happens "is you get exceptional experiences." And that's what we want to deliver to people. So its not about the technology, its about the people. Its about making people happy, making easy, taking stress off the table. You go to the meeting, you light it up, you share the content, you record it, you can watch it later, its just terrific. >> So the people, the experiences you about we've been hearing that thematically for the last three days. As we know as consumers, the consumer behavior is driving so much of this change that has to happen, for companies to not just digitally transform, but to be competitive. We're in Five9's booth and they've mentioned they've got five billion minutes of recorded customer conversations. You guys can record, but its not just about the recording of the voice and the video and the transcription. Tell us about what you're doing to enable the context, so that the data and the recordings have much more value. >> Yeah so , I mean its the notion of being able to sort of rewind and replay. I'll give you another example if I may. Coming out of an office in Palo Alto jumped in the Uber, going back to San Jose for a client meeting. I'm a New Yorker as we talked about a few minutes ago and, I don't know the traffic patterns in Southern, in the Valley. And its about 5:00 o'clock, 5:15. San Jose meetings 5:45. Normally it would be fine, but its rush hour, what do I know about rush hour? I know a lot more now than then. I realize I'm not going to be able to make it on time. Put up the client logo, virtual background on the phone, in the Uber, client gets on the call, Harry where are you? I'm in the back of an Uber. Again, the same sort of experience. Then he asks the question, "well with this recording capability, "can I watch it at 35,000 feet?" Of course you can. And that was it. That was the magic moment for this particular client, because he said "I'm client facing all the time. "I don't get it in time, "I don't always make my management meetings "so I won't have to ask my colleagues what happened "and get their interpretation of the meeting. "I can actually watch the meeting "when I'm at 35,000 feet on a plane, going to Europe." So that's what this is all about. >> Alright, well Harry obviously this space excites you a bunch. Can you bring us back a little bit? This brought you out of retirement and the chase, the space is changing so fast. We come a year from now, what kind of things do we think we'll be talking about, and what's going to keep you excited going forward? >> So lets talk about the first part first and then sort of' break it into two. So yes I had a fantastic career and I retired and so when I met Eric and I met the leadership team at Zoom and I dug into the technology and I understood sort of' A, the culture of the company which is amazing. When I understood the product capability and how this was built as video first, and how we would have this maniacal focus if you will on sort of being a software company at our core. And how it was all about the people. That was sort of a very big part of my decision. So that was one. Two is, look we have a labor shortage right? We can't hire enough people, we can't hire the people, we have more jobs than we have people. So and so, retaining talent is really important. Giving them the technology and the studies that have been done, if you make an investment in the technology, that helps with retention. That helps with profit. It helps with, product innovation. So investment in the people. And the ability to collaborate. It's very hard to work if you don't collaborate, right? It just makes it really, very lumpy if you will. So the ability to collaborate locally, nationally, and globally, and people say, well what's collaborating locally? It's kind of like we can just walk down the corridor. Yeah, well if you're in two different buildings how do you get there? And then it gives us, a foot of snow between you, its makes it really hard. So collaborating locally, nationally, and globally is super important. So you put all that together that was the, what convinced me to say okay you know what, retirement, we're just going to put a pause button on that. And we're going to gave some fun over here. And that really has been, so I've, over a year now and its been absolutely amazing. So yes, big advances. What's in the the future? I think the future, you know there's been a lot of discussion around AI. We hear that its like, all the time. And we've seen from a variety of different providers this week in terms of their, their thoughts around how they're going to leverage AI. Its not about the technology, its about the end of the its about the user experience. And you look at the things that we started to do, we talked about real-time transcriptions a few moments ago, you look at the partnership that we have with Linkedin where you can hover over the name and their Linkinin profile pops up. You're going to see this, I just see this as an exponential change in these abilities. Because you have these building blocks today that you can grow on an exponential basis. So, the world is our oyster, is how I fundamentally think about it. And the art of the possible is now possible, And so lets, I think the future is going to' be absolutely amazing. Who would have, sorry Lisa, who would have thought a year ago, you could get on a plane using facial recognition? Let me just throw that out there. I mean, that's pretty amazing. Who would have thought a year ago that when you rent a car, you can just look at the camera on the way out and you're approved to go? Who would have thought that? >> So with that speed I'm curious to get your take on how Zoom is facilitating adoption. You mentioned some great customers examples where your engagement with them via Zoom Video Conference basically sold the POC in and of itself, with you at an airport >> That's a great questions. >> I guess O'Hare has pretty good wifi. >> What's that? >> O'Hare has pretty good wifi. >> A little choppy but, but it worked. >> It worked. >> Because of our great software, yeah. >> There you go, but in terms of adoption so as customers understand, alright our consumers are so demanding, we have to be able to react, and facilitate collaboration internally and externally. How, what are some of the tools and the techniques that Zoom delivers to enable those guys and gals to go I get it, I'm going to use it, And I'm actually going to actually use it successfully? >> This is a question, I don't know how many clients, CIOs, CTOs, C suite execs I talk to, and they all say, they all ask me similar sorts of questions. Like we're not a video first culture. Its like video, its kind of like we're a phone culture. And then I, so I throw that right back at them and I say and why is that? Because we don't have a good video platform. Aha. Now, when you have good video, when it just works when its easy, when its seamless, when its platform agnostic. IOS, Andriod, Mac, Windows, Linux, VDI, web. When you have this sort of, this platform when you're agnostic to the platform, and its a consistent high quality experience, you use it. So its the notion of, Lisa, it's the notion of would we rather get into a room and, would we rather get into a room and have a face to face meeting? Absolutely. So why would you get on a call and not like to see the people you're talking to. You like to see the people. Why, because its a video first. >> Unless its just one of those meetings that's on my calender and I didn't want to be there and I'm not going to listen. But I totally agree with you Harry. So, another hot button topic that I think we're at the center of here and that I'm sure you have an opinion on. Remote workers. So we watched some really big companies I think really got back in the dialogue a coupla' years ago when Yahoo was like okay, everybody's got to' come in work for us and we've seen some very large public companies that said you need to be in your workforce. and as I said, I'm sure you've got some pretty strong opinions on this >> I don't know what's going on here, quite honestly Stu but its like I think you're reading my brain because these are things I love talking about. So yeah, its. Sorry repeat the question? >> Remote workers. >> Remote workers, yeah. So first of all, I was at an event recently we talked about remote work. We didn't like the term. Its a distributed workforce. >> Yes. Because if you say you're a remote worker its kind like, that doesn't give you that warm feeling of being part of the organization. So we call it, so we said, we should drop calling people remote workers and we should call them a distributed work force. So that's one. Two is, I'm in New york, I'm in Orlando, I'm in Chicago, I'm in Atlanta, I'm in Denver. I'm on planes, I'm in an Uber. I don't feel disconnected at all. Why? Because I can see my colleagues, and its immersive. They share content with me. I'm walking down Park Avenue and I've got my phone and they're sharing content and I'm zooming in and I can see them and I can hear them and I'm giving feedback and I'm marking up on my phone, as I'm walking. So I don't feel, and then when I go to, its fascinating, and then I go to San Jose and I'm walking around the office and I'm seeing people physically. It doesn't feel like I haven't seen them, its really funny. I was in San Jose last week, Wednesday and Thursday in San Jose, took the red-eye back. Hate the red-eye but, I don't like flying during the day, I think it's inefficient, a waste of time. Took the red-eye back, now I'm on calls Friday morning from my office at home with my green screen, Zoom background and everybody's got, it's like I'm talking to the same people I was talking to yesterday but they were in the flesh, now they're on video. It's like Harry where are you, why didn't you come to the room? Well I'm back in New York. It's just just that simple, yep. >> That simple and really it sounds like Harry, what Zoom is delivering is a cultural transformation for some of these newer or older companies who, there is no reason not to be a video culture. We thank you so much for taking some time >> Thank you, thank you >> To stop by theCUBE and chat with Stu and me about all of the exciting things that brought you back into tech. and I'm excited to dial up how I'm using Zoom. >> Well we can take five minutes after this and I can show you some cool tricks >> Wow, from the CIO himself. Harry Moseley, thank you so much for your time. >> Thank you, thank you >> Great to have you on the program. For Stu Miniman, I'm Lisa Martin and you're watching theCUBE (upbeat tune)

>> Live from Orlando, Florida It's the Cube covering Enterprise Connect. Twenty nineteen. Brought to you by five nine. >> Yeah, good afternoon. Welcome to Orlando, Florida The Cube is here at Enterprise Connect. Twenty ninety nine. Lisa Martin with my co host to Minuteman Stew and I have been Here's starting on Day two stew. Good afternoon, >> Lisa. Great to see Yeah. Day two of three. Enterprise Connect. >> It's not that sunny >> here in the Sunshine State, but the nice thing about the Gaylord is it's a nice controlled environment. Walk by. I saw the alligator for bid. They've got nice planning. They've got I love in the atrium there. There's great branding of thie E c. Nineteen. Everybody's taken photos of it. I saw some drone footage in the keynote this morning showing some of the setting here. So >> it's a It's a nice >> event way said sixty five hundred intended, which is nice. It's not one of these, you know, twenty thirty thousand. You're just buried by people toe big Expo Hall. But, you know, you could really get to talk to some people and enjoy the size of the show. >> Yeah, I agree. The size is great. It does no pun intended. Facilitate that collaboration and communication. You mentioned a number of attendees about one hundred forty vendors, and you can hear the noise behind soon. MIAs were in the ex ball in the booth of five nine and lots of conversations going on. This is an event that I find very interesting state because we talk about the contact center were all consumers every day. And we talked about this with a lot of our guests yesterday that the customer experience is absolutely table stakes for an organization, that it's essential to deliver an Omni Channel customer experience meeting with the consumer wherever they want to be and also facilitating a connected conversation so that if a shot is initiated and then the consumer goes to social or makes a phone call, that problem resolution is actually moving forward before we get into. Today's key knows a couple of really interesting things that you and I learned yesterday with some of the guests that we had on when we were talking with Blair Pleasant. One of the things that she and five nine uncovered with some research is that an employee's satisfaction was lower on the ratings for a lot of corporate decision makers, which was surprising from a collab and communications perspective that if employees, especially those agents on the front line, are having some challenges, it's going to be directly relating Tio customer Lifetime Value. >> Yeah, it was a little bit surprising, you know, if you think about just in general, you know, often the admin is not the key focus there. It's I need to get business outcomes. I need to get R. A Y. You know what I care about is, you know, how is my customer doing? But at the end of the day, you talk about the contact centers. If I don't have an agent that's engaged, really, how is that conversation going to go with the customer? So they need to think about that, You know? How will the technology help them do their job? Better help them game mastery faster? There were some things that I saw really parallel toe conversation we're having about cloud in general, which is, you know, there's lots of technologies out there, but it's often it's not the technology issue it is, you know, the organization and the people issue in the keynote this morning there was a big customer panel and that was definitely something we heard. I love one of the customers actually said We're going to make all these changes And they had the Don't panic towels, which, of course, harkens back to The Hitchhiker's Guide to the Galaxy S O. You know, we know things are going to change. There might be some things you need to work through. But don't worry, we're there to help on. We will get through this and at the end, it should be better. >> No, I like that. You brought that up. I love that Tabal. Don't panic because, you know, we were talking yesterday a lot about the customer experience, the expectations of this rising, empowered consumer also the agent experience. But then, of course, there's the internal collaboration that's essential to all of this. And as I think, the gentleman that you're referring to was from Continental G talking about Hey, we don't have all the answers. But adoption of these tools internally is critical, but it's also a cultural sort of stepwise process. I thought that was very cool, that they actually were very transparent with their people. We identify this is not going to be smooth sailing, but it's an essential part of our business growth. >> Yeah, I tell you, it was really interesting. Listen, the panel there was one of the companies up there. They're pretty large and they said, Look, we're going to standardize on a single tool and everybody's going to get on board. And I actually bristled a little bit when I heard that because, you know, the engineering group versus the marketing group versus you know, the Contact Centre. There's certain things that they need to be able to collaborate. But thing like, you know, one tool to rule them all. You know, it sounds a little bit tough out there. Yes, there needs to be some standardization, but, you know, we see that in the cloud world. You know, it turns out customers are using multiple clouds out there because there should be a main one that we focus on. But if I need a best of breed piece for here, or if there's ah, feature functionality, they can't get elsewhere. I need tohave that, and we see that at this show there's just such a diverse ecosystem meant, and there's one hundred forty there's people that make device. There's all these software pieces, there's some big hubs. And then there are all the ancillary things that help plug and enhance and do this because there is some great innovation going on here. Some cool software, things that we're hoping toe, you know, take everything from, you know, White Board and voice two speech and globalization to the next phase. >> Yeah, that was very interesting. Especially the Microsoft teams demo. That Lori writing team this morning, The panel Now that you talked about, there were seven, uh, customers from a variety of industries. Kurtz was their continental. We mentioned, I think, paychecks. I'm curious to get your thoughts on when they were talking about their plans to migrate to cloud, all in some percentage, considering the numbers that we heard yesterday stew in terms of the cloud penetration for the contact center market, what were your thoughts? They're about those things. All in Depends on what makes sense. >> Yeah, It reminds me of what we were talking about in the public loud discussion two years ago. Way No cloud is growing at a very fast pace. Look at our friend here at five. Nine they were growing at a much faster pace, then the contact center. Overall, I believe they're growing somewhere twenty five percent as opposed The industry as a whole is growing at about nine percent. So we understand that cloud is growing faster than the market overall. And it was one of moderated. The panel said that today is about a third, a third, a third on premises hybrid in public and where that kind of steady state will be. I think it's still too early to tell in this industry, just as it is in cloud overall. But absolutely I burst a little bit when it's like, Well, you will never do this one this way. Well, you know, never is not something that we like to say in it because you never know when when that will be possible. You know, my background I worked on virtual ization, started out in test Devon. It reached a point where really there was no technical reasons that it couldn't do it when he rolled. The really large companies will never use cloud for it. Really. Who is better it scaling and updating and making sure you can manage an environment then those hyper scale players. You know, Microsoft got a big present here. You don't ask him. Like her soft customer. Uh oh. You're running off his three sixty five. You're living on Azure. What version of that are you running? And do you have the latest security patch as opposed to? If I have a Windows desktop and I'm not doing up a weight, have I done my patron? If I Donald this stuff and you amplify that by thousands of you know of agents and Contact Center, we know that Cloud has certain speed, agility and being up to get new features and updates in there that I just can't do nearly as well if it is something that I am installing and having to maintain myself or with a service organization, >> right? And so we talked yesterday with the number of guests about what are some of the imperatives to move to cloud in the end, the sum of the non obvious ones cost obviously, is one that we talk about all the time rights to it. Any show that we're at, but also the opportunity for businesses to leverage the burgeoning power of a I. Of course, every show we go Teo Isa Buzzword Machine learning. And of course, the cloud provides the opportunity for there to be more data to train the machines to be better at context and her overall. And, of course, internal communications. >> Right. And something that I like to hear at this show is start talking about a PC compatibility. You talk about the partnerships that are going on, It is not one software stack we're talking about platforms. We're talking about how integrations can happen so that if somebody has the cool new thing that does, you know, a real time engagement better than what I had before. Well, I could probably plug that in, and it's going to work on my platform. You know, everybody here talks about Well, whether you're, you know, a web, acts of Microsoft teams a zoom shop O r. You know any of those various environment, other? Everybody's working across those environments. We've had some standardisation here s O so that whichever one I've chosen, I'm not locked into one environment. And you know, I can help modernized the pieces as a need and take advantage of those new innovations when they come >> Absolutely all right. So, stew, you're a man on the street last night. Tell us some of the interesting things that you heard in some of the folks that you met Way. >> It's interesting. We think we talked about it in our open yesterday. There are a number of companies that have been around for a while And what are they doing today? What is their focus? And couple of companies have done rebranding. So the big party there was a line and I managed to get myself in. Is Polly So Polly has rebranded? Of course it was Polycom and Plantronics coming together. How many times we hear it on the keynote stage that they mentioned that everywhere you go, they're branding is there, So look kudos to their branding and messaging team. We're going to have their CEO on the programme tomorrow, but, you know, you know, the CEO talked about, you know, their new logo. It's like the meaning behind it. Of course, Polly means many, but there's three piece, and if you look at it, it looks like the iconic conference phone. So, you know the room was in there. Everybody is enjoying the appetizers and the open bar. But, you know, there was people, people, no polycom. I'm back in our conference room. We've got one of those speaker phones in there in the nineties. I usedto, you know, sell their conference phones in their video conferencing When I worked for was now a via but was lucid at the time. So there's a lot of intersections. Thie. Other thing I've really found is it feels like everybody here, you know, at one point in their career either work for Cisco or worked for, you know, the Lucent family. You know, of course, T back in the day had the whole telecom space, but it is like many other shows. We go to a rather interconnected community here on DH. You know, we'd guess on It's like, Oh, yeah, Cisco, Skype. And now at five nines. Yeah, it is friendly. You don't see some of the, you know, some of the places we go There's bitter rivalries between, you know, key competitors, and yeah, while you know, all the contact centers don't love, you know that they're there. Brothers and sisters, a two competitors there. Chances are they've worked with half the people there on, you know, Sometimes the future will be working with again. So it's it's a it's a good atmosphere. The people I've talked to really enjoy coming to the show, a Zoe said at the top. >> And this show has evolved over the last night. We were talking about yesterday twenty eight, twenty nine years, starting out as being called PBX and then re branding to Voice Con and then in about twenty eleven to Enterprise Connect. And it was interesting that because the word innovation comes up all the time, as does evolution of communications and collaborations. But when the king it was his kicked off this morning they talked about This is the biggest ever enterprise connect that they've had. So you can feel and you can hear it behind us the momentum, the excitement he talked about. There's a lot of cover artery here. There's a lot of two degrees of separation and tech, but the opportunities for every business, whether yours selling a small particles service on the Amazon marketplace or you're a big a global enterprise, the opportunity to connect and deliver a superior a competitive advantage to your customer experience. This table stakes these days if you don't have that opportunity. Those capabilities. There's going to be something that's going to come and replace you in a heartbeat. >> Yeah, absolutely. At least I have a background in space. But there were places where our walk Drano said, Wow, there's applicability for our business. I mean, we use a number of the collaboration Sweets, You know, I mentioned, I've got I've got maps for, you know, not just the Google sweet, but all the collaboration tools on there's technology that I'm like Gucci. I want to understand that a lot of them are downloaded an app. You can start using them for free. And then there's a Freeman model and and others arm or enterprise licenses on. It's been interesting to watch some of that dynamic as to, you know, it is the pricing. Is Mohr built for the mobile and cloud world than the traditional? You know, I'm going to buy boxes and have a huge capital expense up front. So >> what do you think if you look back to your early days in the call center when you were just a young pup, how much easier your job have been? If you had had some of the capabilities that we're talking about >> now least I wish, you know, back in the nineties, you know, if I just had linked in alone, I could have supercharged s o much of what I did. But all these other tools, right? Putting at my fingertips information. It was like, you know, Lisa tell you date myself in the nineties and taking a call where everybody that works in the call center You knew the area code of every single environment that it didn't tell you where it wass you would be like, Oh, yeah, I, too want to hide in New York. How you doing? You could be whether you're saying good morning or good afternoon based on what part it was like. Oh, wait, I'm talking Arizona. They don't follow daylight savings time. We'd remember all that stuff today. There's too many exchanges. Everybody takes their phone numbers wherever they go. S o it was It was a smaller country back then. But in the other hand, the technology is actually going to give us the opportunity to be ableto imbue that allow humans to focus on the empathy and connectedness that today's digital age sometimes tries to tear away from us. >> Exactly. We need that empathy in that connectedness. So, stew, we have a great program today. Stick around. We've got some folks from Selah Jin we've got. It's now on the programme within communications Fuse. Tetra VX five nine, of course. And there in that little and zoom this afternoon. Yes, thank you. Five O'Clock for student a man. I'm Lisa Martin. You're watching the Cube.

>> Hello, and welcome to the special. Keep conversation here in Palo Alto, California John Furrier, Co-Host of the Cube. We're here with Jonathan Rosenberg, CTO chief technology officer and head of AI for Five9. Jonathan. Great. Great to see you. Thanks for coming in. >> Thanks. My pleasure to be here. >> So you've had a stellar career? Certainly. Technical career going way back to Lucent Technologies. Now here at Five9, Cisco along the way. You've been a really technical guru. You've seen the movie before. This's happening. Every wave of innovation, multiple ways you've been on. Now you're on the next wave, which is cloud AI, CTO Five9. Rapidly growing company. Yes, it is. What attracted you to five? >> Yeah, Great question. There's actually a lot of things that brought me to Five9. I think probably the most important thing is that I've got this belief, and I'm very motivated for myself. A least to do technology and innovate and create new things. And this belief that were on the cusp of the next generation of technology in the collaboration industry. And that next generation is going to be powered by artificial intelligence, and one of the ways I sort of talked about this is that if you look at the entire history of collaboration, up til now meetings, telephony, messaging was to figure out, a way to get the bits of data from one person to another person fast enough to have a conversation. That's it. You know, once we got the audio connected, we just moved the audio packets in the video packets and messaging from one place to another. And we didn't actually analyze any of that because we couldn't. We didn't have the technology to do that. But now, with the arrival of artificial intelligence and particular speech recognition, natural language processing, we can apply those technologies to that content and take all this dark data that's been basically thrown away the instant it was received, to process it and do things. And that is going to completely transform every field of collaboration, from meetings to messaging, to telephony. And I believe that so strongly, that is, That's great. That's going to be my next job. I wanna work on that. And it's going to start in the Contact Center because a contact center is the ideal place to do that. It's the tip of the spear for AI in collaboration, >> and it's in a really great area. Disruptive innovation are absolutely so Take us through the impact was one of things I have observed in this industry is you have You know, I don't want to say mainframe clients served to go back to date myself, but there was that wave of client server computer >> mainframes. Cool again. We just called clout. Now, hey, is >> exactly. So you have these structural industry waves take us through the waves of how we got here and what's different now? And why can't the old guard or the older incumbents surviving if you're not out in front that next wave your driftwood. So what? What's What's his ways mean? Why is this important? What has to change to be successful? >> Exactly. So there's been this this whole like you said these waves. So the first wave of telecommunications was like hardware: circuit switching, big iron switches, sitting in telco data centers, you know, And then that era transitioned to software and that was with the arrival voiceover IP and technologies like SIP, and that made it more less expensive. And anyone could do it, and it transformed the industry. The next wave, the third wave were still like halfway through and in some areas, actually, just beginning contact, center was early here, the third wave is cloud, right is now we're moving that software to a totally new delivery vehicle that allows us to deliver innovation and speed. And that wave has now enabled us to start the next wave, which is on ly in its infancy, which is AI right, and the application of machine learning techniques to automate all kinds of aspects of how people communicate in collaborate. >> I think cloud is a great example of Seen a. I, which had been a concept around when I was in computer science. Back in the eighties, there was a guy you know theory, and it's the science of it is not so much change, but computing's available. The data to be analysed for the first time is available. Yeah, you mentioned analyzing the bits writings. There's now a key part. What does it actually mean? Teo. Someone who's has a contact center has a large enterprise. Says, you know what? I got to modernize. How does A I fit them? What is actually going on, >> right? Great question. So a I actually consult lots different problem at the end of the day again, Hey, eyes like this, Let's. It's the biggest buzz word right on. It's in my title. So, like I'm a little guilty, right? >> We'll get a pay raise for, But >> what? It comes down to this, really this Korean machine learning, which is really like a fancy new algorithmic technique for taking a bunch of data and sort of making a decision based on it. So And it turns out, as we've learned that if you have enough data and you can have enough computing and we optimize the algorithms, you could do some amazing things, right? And it's been applied to areas like speech recognition and image recognition and all these kind of things. Self driving cars that are all about decision process is, Do I go left? I go right? Is this Bob? Is this Alice? Did the users say and or did they say or write those air all decision process? Is that these tools economy? What does it mean? The Contact Center? It means everything in the context. And if you look at the conduct center. It's all about decision. Process is, you know, where should this call get routed? What's the right agent to handle the call right now? When the agent gets the call, what kind of things should they be saying? What I do with the call after the call is done, How should the agent use their time? All those things are decision processes and their key to the contact center. So so, aye, aye. And Emily going to transform every aspect of it and, most importantly, analyzing what the person is saying connecting with the customer, allowing the age to >> be more. You know, I think this is really one of the most cutting edge areas of the business. And the technology and throw in CEO was talking about an emotional cognitive recognition around. Yeah, connecting with customers and data certainly is going to be a part of that. But as machine learning continues to get it, Sea legs. Yeah, you seeing kind of two schools of thought? I call it the Berklee School. Hard core mathematics. Throw math at it. And then you've got this other side of a machine learning which is much more learning. Yeah, it's less math. More about adaptive and self learning. One's deterministic one's non deterministic is starting to see these use cases where Yeah, there's a deterministic outcome, right throw machine learning at a great exactly helped humans come curate, create knowledge, create value that you've got a new emerging use case of non deterministic, like machine learning environments where I could be driving my test Look down the road or my company's run the Contact Center. I gotto understand what's gonna happen before it happens. Right? Talkabout this. What's your thoughts on this is This isn't really new, pioneering area. What's your view on >> this? Yeah, so I think it actually straight sort of a key point. I wantto narrow enough from what she said, which is that a lot of these problems still, it's about the combination of man and machine, right? It's that there's things that you know are going to be hard for the machine to predict. So the human in their usage of the product, teaches the machine, and the machine, as it observes, helped the human achieved mastery. And that human part, by the way, is even more important in the conduct centre than anywhere else. At the end of the day, your customer and you call up, you're reaching for human connection. You're calling this. You want to talk, you've got a problem. You need someone to not just give you the answers, but empathize with youto understand you. Right? And if you go back to anything about the best experience you've ever had when you called up for support or get a question answered. He was like it was someone who understood you who's friendly, polite, empathetic, funny. And they knew exactly what they were doing, right? And they solve it for you. So the way I think about that, is that actually the future of the context. Dinner is a combination of human and machine, and the human delivers the heart, and the machine delivers the master. >> And I just noticed your I'm looking at Twitter, right? And you just tweeted this forty minutes to go the future of Contact Center. Nice. A combination of human and machine human delivers heart. The machines lose mastery. I think this is so important because unpacking that words like trust come out True relationship. So you asked about my experiences is when I've gotten what I needed, You know, all ledger, the outcome I wanted. Plus I felt good about right. I trusted it. I trusted the truth. It was. And he's seeing that in media today with fake news. You're seeing it with Digital has kind of almost created, anonymous, non trustworthy its data. There's been no real human. Yeah, packaging. So I think you're I'm hearing you You're on the side of humans and machines, not just machines being the silver bullet. >> Absolutely, absolutely. And again, it goes back to sort of the history of the contact centre has been this desire to, like, just make it cheaper, right? But as the world is changing, and as customer experience is more important than ever before and is now, technology is enabling us to allow agents and human beings to be more effective through this. The symbiotic relationship that we're going to form with each other, like we can actually deliver amazing customer experiences. And that's what really matters. And that idea of trust I want to come back to that word that's like super Central to this entire thing. You know, you have that as a user, you have to trust the brand you have to trust the information you're getting from the agent. You have to trust the product that you're calling them talking about, and that's central to everything that we need to do. In fact, it's a It's a fundamental aspect of our entire business. In fact, if you again think about it for a moment here, we're going to customers who are looking to buy a context, and we're saying, Trust us, we're going to put it in the cloud, We're going to run it, We're going to operate it for you and we're going to deliver a great, highly reliable experience that takes trust to sew one of things that back to your early early question. Why did come two, five, nine? One of the things it has done is build this amazing trust with its customers to its huge, amazing reliability. Up time, a great human process of how we go in work with our customers. It's about building trust in every single >> way. So I want to put in the spot because I know you've seen many ways of innovation. You've seen a lot of different times, but now it's more accelerated. Got cloud computing at a much more accelerated innovation cycle. So as users expect interact with certain kind of environment. Roman talked about this in his interview. CEO Control. So you just want to be served on the channels that they want to be served in. So having a system that they have to go to to get support, They wanted where they are. And so how is the future of the customer interaction? Whether it's support our engagement is going to take place in context to nonlinear discovery, progression, meaning or digging a service themselves in the organic digital space. I honestly want to go to a site per se. How do you see the future evolving around this notion of organic discovery? Talking to their friends, finding things out? Does that impact how Five9 sees the future? >> Yeah, absolutely. And I think it gets back to sort of an old idea of Omni channel. I mean, this is something that the context people been talking about for, like forever, like the last ten years, right? And and its original meeting was just this idea. Oh, you know, you can talk to us via chat, or you can send us an e mail or you can send us a text or you could call us right and we'll work with you on any of those, like you said. Actually, what's more interesting is as customers and users moved between those things, and it actually switches from reactive to proactive right where we actually treat those channels as well. Depending on what the situation is, we're going to gather information from all these different data sources, and then we're going toe, find the right way to reach out to you and allow you to reach out to us in the most official. >> So you see a real change in user expectation experience with relative rule contact? >> Yeah, I mean, I mean, the one thing that technology is delivered is a change in user expectations on how things work. And if you look at the way we as human beings communicate with each other, it's dramatically different today than it was really just just a few years ago. >> So, Johnny, let's look under the hood now in terms of the customer environment, because certainly I've seen Legacy after Legacy sisters being deployed. It's almost like cyber security kind of matches the same kind of trend that in your world, which is throw money at something and build it out. So there's a lot of sprawl of solutions out there and trying to solve these problems. How does the customer deal with that? And they're going forward there on this new wave. They want to be modernized, but they got legacy. They had legacy process, legacy, culture. What's the key technical architecture, How you see them deploying this? What's the steps of the patient and her opinion? >> It will surprise you not one drop when I say it's go to the cloud, all right, and there are real reasons for it and by the way, this is going to be going to be talking about this at Enterprise Connect. So, So tune in Enterprise Connect. I'm going to be talking about this. Um, there's a ton of reasons, five huge ones, actually, about why people need to get to the cloud. And one of them is actually one of the ones we've been talking about here, which is a lot of this. Modernization is rooted in artificial intelligence. It turns out you just cannot do artificial intelligence on promise you cannot. So the traditional gear, which used to be installed and operated by legacy vendors like a VIA, you know, they go in, and Genesis, they go in the install a thing and it works just for one customer at a time. The oly way artificial intelligence works is when it gathers data across multiple customers. So multi tendency and artificial intelligence go hand in hand. And so if you want to take any benefit from the stuff that we've been talking about this conversation, the first step is you gotta take your context int the cloud just to begin building and adding your data on the set and then leverage the technologies and they come out >> So data is the central equation And in all this because good data feed's good machine learning good machine learning feeds Great a. I So data is the heart of this, yes. So data making data in the cloud addressable seems to be a key. Thought Your reaction and what are you guys doing with? >> Absolutely, absolutely. And this is, by the way, another reason why I joined five nine, that I've been speculating here. I said, All right, if Date if ya if the future is about a I miss, I said, That's what I want to do in collaboration. You need data to do that. You actually have to work for a company that has a lot of data. So market leadership matters. And if you go look at the contact center and you go look at all the industry and analyst reports like it made it pretty obvious, like who to go to there is like the leader in cloud Conduct. Sonar with with tons of agents and tons of data is Five9 and ah, and so that's That's why you're so building the data aggregating data. That's one of the first things I'm working on here is how do we increase and utilize the data that we've been gathering for years. >> And and a lot of that we've had this conscious with many customs before about Silas Silas. Kill innovation When it comes to data address ability, your thoughts on that and what customs Khun due to start thinking about breaking down those silent >> exactly so In fact, Silas have been a big part of the history of especially on premise systems. Once in fact, Afghan one silo for inbound contacts and are different for outbound. Different departments, by the way, also had their own different comic centers. And then you had other tools that on the other data, if you don't like a separate tool over there for serum and a different tool over there for WFOR debut Fam and something else for Q M. And all these things were like barely integrated together in the cloud that becomes much more natural. Spring these technologies together and the data can begin to flow from the systems in and out of each other. And that means that we have a much greater access to data and correlated data across these different things that allows us to automate all over the place. So it's this positive reinforcement sile cycle that you only get one year when you've gone to the club. >> The question I want to ask you, it's more customers on pretend I'm a customer for second. I won't ask you, Jonathan, what's the core innovation for me to think about and bring to my organization? If I want to go down the modern monitors you. How do you answer that question? What is the core innovation? Stretch it. I should have Marcy moving through the cloud is one beyond that is itjust cloud. Then what else? What, Juanito? Be preaching internally and organizing my culture >> around. Yeah, great questions. So, I mean, I think the cloud is sort of the enabler of many of these different pieces of innovation. Right? So velocity and speed is one of them. And then setting up and adjusting these things used to be super super hard. Ah, you wanted to add agents seats? Oh, my gosh, enough to go binding hardware and racket stack boxes and whatever. So even simple things like reactive nous, right? That's something that's important to talk about is that many of our customers and our businesses are highly seasonal. Right? We've seen like someone showed me a graph. This was like, Oh, my gosh, it was It was a company that was doing ah, telethon. And they said, Here's how many agents they have over this year. It was like two agents, and then it shut up. It's like five hundred agents of phones. Two days exactly. Drop back down. And I'm like, if you think about a business like that, you could never even do that. And so the so cloud is nice, but the way you talk about it, and as an I t buyer of these technologies, you talk your business owners about reacted nous speed, velocity, right? That's what matters to a business and then customer experience. >> You're one of the things that just to kind of end of second, I want to get your thoughts on. I'm gonna bring kind of industry trend. That's I think, might be a way to kind of talk about some of these core problems on data. Most mainstream people look at Facebook and saying, Well, what a debacle. They used my data. These men against me. I'm not in control of my data. You're seeing that weaponization people saying elections were rigged. So weaponizing data for bad is this content, and this context ends right? An infrastructure that's right, >> that's right. >> But there's also the other side, which is, you actually make it for good. So you started thinking about this people starting to realize Wow, I should be thinking about my data and the infrastructure that I have to create a better outcome. That's right, Your thoughts on that as people start to think about II in terms of the business context, right? How did they get to that moment where they can saying, I don't want anyone weaponizing did against me. I want to use it for good. How did the head of the company comes back to >> trust, by the way, right? Is that you know, on and to some degree that's an uphill battle due to some of these debacles that you just talked about. But Contact Center is a different beast of the whole thing. And interestingly, it's an area where there's already been an assumption by users that when they interact with the contact center, that data is sort of used to improve the experience. I mean, every contacts and the first thing I say, by the way, this call may be recorded for training. Um, honoring purses, Captain, that they are right. It's it's already opt in. There's an assumption that that's exactly how that is being used. So it's This is another reason. By the way, what's a contact center is? It was the tip of the spear because it was a place where there was already permission, where the data is exactly the kind of stuff that had already been subject to analysis and Attock customer expectation that that's actually what was happening. The expectation was there they building action, that data what was missing. So now we're filling in the ability to action on that All that data with artificial intelligence >> and final question. What's your vision going forward? A CTO and aye, aye. What's the vision of Five9? What do what do you see? The twenty miles stair for Five9 within consciousness. We just talked about >> it. So? So it's It's about revolution. I'll be honest. Right on. I tell people like, I'm not like an incremental, steady Eddie CTo like I do things because I want to make big changes. And I believe that the context and R is on the cusp of a massive change. And my boss, Rohan said this and this has been actually central to how I'm thinking about this. The Contact Center in the next five years will be totally different than the twenty five years before that. It's a technologist. I say. Wow, five years like that's not very long in terms of softer development. That's what we were going pretty much rewrite our entire stack over the next five years. And show. What should that start to look like? So for me, it's about how do we completely reimagine every single aspect of the context center to revolutionize the experience by merging together, human and machine and totally new >> and the innovation strategies cloud in a cloud and and and data great job and great to have you on pleasure. Great, great conversation. Quick plug for you guys. Going to be a enterprise, connect to Cuba. Lbi. They're covering the event as well. What you going to talk about that? What? Some of the interactions? What will be the hallway conversations? What's your objective? What's your focus >> exactly? So so I'm going to be having my own session. We're going to be talking about the five reasons that you may not think about to goto context on the cloud. I've hinted already. A James of them. I think we're too well. That's you can you know, A. I is clearly central and I'm going to start to talk about the other four. >> Great, great conversation. A lot of change. Massive change happening. Great innovation Stretch. Great mission here at Five9. Great, great mission around. Changing and reimagine. More change the next five years in the past twenty five years. Again cloud computing eyes doing it will be winners. Will be losers will be following it here on the Cube. Jonathan Rosenberg, CTO ahead of AI at Five9. I'm John Furrier with the Cube. Thanks for watching.

(upbeat digital music) >> Hi, I'm Peter Burris, and welcome to another, theCUBE Conversation. This week, we're in our Palo Alto studios, with Saurabh Sandhir. Saurabh is the Vice President of Product Management at Nuage Networks, which is a Nokia company. >> That's right. >> Saurabh, thank you very much for being here today. >> Thank you, Peter. Happy to be here. >> So, tell us a little bit about Let's start off. Tell us a little bit about Nuage Network. It's a new company out of a big company. What's the focus, how is Nokia helping? >> So, Nuage, well, while it's new but it's not quite new, we have been in the market for four years, and the way Nuage started was it was part of Alcatel-Lucent earlier, and now a part of Nokia, we are really the SDN BU or the SDN arm of Nokia. What we are focused on from the beginning is building a platform for secure, automated, connectivity for out data centers as well as WAN. And we have built that platform and successfully introduced it in many enterprises and service providers. So the unique aspect of Nuage is while in terms of innovation, while in terms of global market, we work as a start-up. While we have the service and support that's offered by Nokia as a mother ship so I have the unique, best in both worlds combination of a start-up as well as a large company. >> Nokia is still regarded as one of the finest brands in enterprise networking in the world. So, you said SD-WAN, software defined, wide area networking. >> Correct. It's a term that a lot of people have heard something about, but what are some of the high level benefits, number one, and then number two, why right now? >> Right. If you look at how enterprise connectivity services were offered down the ages, it was, you had to get some kind of a VPN access, whether it was an MPLS or a VPLS access, you got a dedicated leased line, you got a specific device, and that's how you would connect your enterprise branches to the network, and to each other. And SD-WAN, what it does, is it changes that paradigm. It provides secure automated connectivity in line with cloud principles for enterprises across the board. And in terms of why now, I think it is the combination of factors that arise from how the modern enterprise is evolving, and how there is a need to deliver, not just connectivity, but IT services over IP, whether it is access to the public cloud, whether it is access to SAS applications like Office 365, or Skype, or whether it is the fact that you want, not just pure connectivity, but you want application aware connectivity. All those trends coming together have created the demand, and the need for SD-WAN. >> So, you mentioned the cloud principles, and that has been a dominant feature of the industry. We call it the cloud experience, and the cloud experience is typically associated with abstracting and virtualizing hardware. So, in many respects what we're talking about is bringing that same class of technology to the wide area network, the circuits, the access points, everything else, by having a software defined experience that allows the business to rapidly re-configure, based on what its needs, against the access to the underlying WAN network that it has. Have I got that right? >> Absolutely correct. What SDN-WAN basically does is, if you look at a traditional branch router, it has access to a particular type of network, MPLS or VPLS, it has a data plane, it has a control plane, as the management plane by which you configure it. What SD-WAN does is takes those control and management planes, puts it in the cloud, takes the data plane and sort of makes it agnostic to the access technology. So, you run the data service, irrespective of whether you are on internet, whether you are on LTE, whether you are on MPLS, and using those principles of centralized control, centralized management, standardized x86 based devices offering CP services, and voila, you get SD-WAN. That's exactly correct. >> So, I can see what the advantages to an enterprise are-- >> Yep. >> I can reconfigure my business faster-- >> Yep >> Especially business that's more digital in nature. But, is this going to be something that the service providers are going to embrace? >> Absolutely, absolutely. While the enterprise, and the reason for services providers to embrace this, is, for the existing customer this offers an up sale opportunity, for the people who are already on their VPN services, this is an opportunity to broaden the scope from just pure connectivity, this is an opportunity for them to access customers who were, where the cost to serve was to high. Where they just could not go because they were outside of their geographic reach, or outside of their existing business modeling or business plan. >> Or, for example, you might be a mid-size business that required a more expensive circuit, or maybe not quite a more expensive circuit. The cost of setting the circuit up, servicing that customer, et cetera, might have been to great. >> Absolutely, and that's what SD-WAN sort of provides, a level playing field. In some ways, what it does, is it delinks the service, which is the VPN service from the transport, and the transport can be Internet, can be MPLS, and there you have the benefits for the service provider, for the enterprise, in terms of agility, in terms of time to service, in terms of overall cost. >> But, that's inside the nature of telecommunications oriented services. Is SD-WAN going to make it easier for service providers to perhaps start moving into more value added, data oriented services, above just the traditional communication services? >> That is the holy grail. That is really where the service providers are going and that's where enterprises want them to go, and the reason for that is, today, when you look at what an enterprise branch, or an enterprise office needs to operate, there is connectivity, but, then also there is security services, be it firewall, intrusion detection system, intrusion protection system, URL filtering, anti-virus. Take it with on top of that, there is transport optimization, WAN optimization services. There is emergence of IoT, there are wi-fi controllers. All of these services to the enterprise are being offered as a stand alone appliance, virtual or physical, and there is no centralized control. They are extremely rigid, and all of these providers lock-in. What SD-WAN does is, from a tel-co or service provider perspective, is, it also offers a platform to provide all of these services on top of SD-WAN. So, the benefit, it's a symbiotic relationship in the sense that benefits are both towards the enterprise, because they get these services and the service agility. There is resource optimization, source utilization, and cost, and from a tele-co perspective, the ability to sell beyond connectivity. That's one. >> So, if I'm your counter part at a service provider, I can now think in terms bringing up new service, with cheaper connection, lower cost, lower risk, bringing the customer on board, onboarding. At least, if not better, security, et cetera, because, I'm now using software defined approach to making all those connections, and, also, managing the service itself. >> That is correct. What it allows me to do is, in that role, is to provide on demand programmable services. So, for example, a firewall, as an enterprise I can go to a service provider portal and select which of my sites need, which of my branch sites need, firewall at what point in time. What kind of resources I want to assign to that firewall, and voila, on demand, I have it in place. And from a service provider's perspective, it's additional revenue, it's additional services. >> It's a software defined firewall, and it's much more automated, and much better organized, because it brings all the possibilities of software defined automation, which might include some machine learning, pattern recognition, et cetera, to bear on the wide area network world. >> That's correct, that's correct. >> Alright, so, we've talked a bit about security itself. What are, can you just give us one or two clear differences in how the old world handled security, and the software defined world's going to to handle security in the WAN regime. >> Right, so, the thing with security is, the security paradigm has changed massively. In the old world, which wasn't that old-- >> Peter: It's still here in many respects. >> Still here, absolutely, still here. The security was all about east west, sorry, north south protection, which means that you are protecting towards threats and traffic coming inside and going outside of data center or your branch office, but what has happened, is most of the threats today, most of the attacks today, are focused on east west traffic, which is traffic within branches, from one branch to the other, within the data center itself. That's one. The second aspect is there a multi-cloud aspect to the enterprise IT. You don't access application only on the branch itself. Your applications that run in a data center that's owned by you, private DC, you run application that in a public cloud, AWS Azure, you have access to applications that are offered as software as a service, be it Office 365, Skype, Salesforce, and so on, and that has fundamentally changed the threat surface, or the threat perimeter, that you have to deal with, and you have to now essentially deal with threats that are coming within this whole expanded branch, or enterprise, territory or perimeter. >> So, you're effectively by virtualizing all of these different elements, you're reducing the threat surface. >> Yeah, what we are doing with SD-WAN is a few things. First, and foremost, is the fact that, as you were talking about, these value added services, you can bring these up on demand. You can put a firewall at a particular branch location, for say, guest wi-fi traffic. You can be specific. >> On this point, you can bring a new service up and not have it immediately associated with a whole bunch of capital expense. >> Exactly, exactly. On demand programmable, right, that's one. The second thing is the aspect of PAN network visibility. You also have the ability to see what exactly is going on in your network, the network that's spread across the branch office, a private data center, a public cloud site, and you have full visibility and insight into who's talking to whom, and at what time. >> Peter: At scale. >> At scale. >> Very very big and very small and we know that there's a whole bunch of mid-size companies that can't afford a NOC type of capability, but, now through >> Yep SD-WAN they get some of the same benefits that the big guys get. >> Absolutely, and the threat aspect here is, using this information, you have closed loop automation, or machine learning, where, as opposed to saying all of my traffic has to go through this possible intrusion detection function, because, once in six months I might have a attack, versus, I see abnormal traffic pattern, and the system automatically optimizes that particular traffic flow to go through this particular function, and that allows it to be much more scalable, that allows for much more on demand, in terms of how we perceive security. not just as a lock that needs to remain on a door at all possible points in time, but, a function that can be instantiated when you need it. >> But, I also got to believe, and test me, I'm going to test you, you tell me if I'm right on this, that the historical conversation between a service provider and an enterprise, centered on the characteristics of the circuits that were being provided. And those circuits were often very much grounded in hardware, associated with the specific links, et cetera. And if you ended up with a security problem, you're now having a whole bunch of haggling and a very complex set of interactions. The minute you bring SD-WAN in on that, now you're talking about being able to use software in a software response, not necessarily a hardware response, to being actually able to identify, mediate, contain, et cetera, security threats on the WAN. Have I got that right? >> Correct, correct. Earlier, the conversation was really in terms of providing a circuit, providing connectivity, and what you were doing was, you were providing this connectivity over some kind of a private IP. That's where you were as a service provider, that's what the service you were offering. Now, you expand that same paradigm with security, with access to cloud, to really offer IT services on top of the IP layer, and that's the fundamental difference, that's the change. >> That break apart between the service and the transport. >> Absolutely. >> So, I kind of said the old way, and you corrected me, and said, wait a minute, this is really the way we're, SD-WAN is trying to make changes, trying to affect a new way of thinking. But there is another technology on the horizon here that actually could really accelerate this process, and that's 5G. >> Mm-hmm >> We're not going to go to far out here, but, tell us what some of the near term, how 5G and SD-WAN are likely to co-evolve, if you will. >> Right, right. They're two sides of the same coin if you ask me, and the reason is, while 5G, as with all the mobile technologies in the past, as we went from 2G, to 3G, to 4G is about speeds and feeds, and absolutely, we'll have more band width, low latency, sure, but what 5G is also about is access to applications from, that is in the cloud, or reside whether closer to the users. And in that sense, what 5G stands out to do, or sets to do, is create network slices, and provide access for applications such as, self-driving cars, such as remote surgery. All of these applications, not just need speeds and feeds, but, require dedicated access all the way from the user, onto an application that runs in the data center. And if you look at that paradigm, how SD-WAN plays in this is by providing a programmable network, on demand services, by providing on demand resource allocation. If you take SD-WAN, if you take 5G, then SD-WAN becomes a component of 5G, because if you are a user, say, conducting remote surgery, and you need access to an application that's in the data center, SD-WAN allows you to provide that overlay network, on top of existing services, and there is a certain quality of service, with a guaranteed access, that is critical to 5G. >> But, as you said, it's a fact that 5G's going to promise such greater device density-- >> Right. >> Within a network-- >> Yes. >> And in many respects, you're going to need SD-WAN to honestly take advantage of the benefits that 5G is going to provide. You may not need 5G to take advantage >> Yup, right. of the SD-WAN benefits, but, you're going to need SD-WAN if you're going to to take advantage of 5G. >> Right. >> So, that kind of suggests, that the companies that start, the service providers, and the enterprises that start, early on this SD-WAN thing, are likely to be in the best position to reap the full benefits of 5G when it shows up. Have I got that right? >> I absolutely believe so, because at the end the day, 5G is all about application-aware networking, right. A remote surgery application versus me trying to access Facebook cannot be treated the same way, and that's where SD-WAN comes in. And especially if you combine SD-WAN with some other technologies that are coming out of a company such as Nokia, then you have a end-to-end traffic engineered path that is been created all the way from the user on to the backend data center that enables all these applications-- >> Coming back to the point about security, there is one group that hopes you treat your Facebook and your surgery data the same way, and that's the bad guys. >> Absolutely, and that's what we need to protect against. >> This is a fascinating subject, and it's going to be a lot of discussion and change over the course of the next few years, as multiple of these technologies co-evolve, but, it's pretty clear that SD-WAN has potential to further accelerate many of the changes that we're seeing in enterprises today as they try to become more digital in nature. >> Sure, SD-WAN is the future and it's here and now. >> Excellent. Once again, Sandhir, I'm sorry. Once again, So, you can cut this, I blew it. Sorry, Chuck. (laughing) Once again, Saurabh Sandhir, VP Product Management, Nuage Networks, an Nokia company, thanks for joining us here in this Cube Conversation. >> Thanks, Peter Thanks for your time. (upbeat digital music)

(upbeat digital music) >> Hi, I'm Peter Burris, and welcome to another, theCUBE Conversation. This week, we're in our Palo Alto studios, with Saurabh Sandhir. Saurabh is the Vice President of Product Management at Nuage Networks, which is a Nokia company. >> That's right. >> Saurabh, thank you very much for being here today. >> Thank you, Peter. Happy to be here. >> So, tell us a little bit about Let's start off. Tell us a little bit about Nuage Network. It's a new company out of a big company. What's the focus, how is Nokia helping? >> So, Nuage, well, while it's new but it's not quite new, we have been in the market for four years, and the way Nuage started was it was part of Alcatel-Lucent earlier, and now a part of Nokia, we are really the SDN BU or the SDN arm of Nokia. What we are focused on from the beginning is building a platform for secure, automated, connectivity for out data centers as well as WAN. And we have built that platform and successfully introduced it in many enterprises and service providers. So the unique aspect of Nuage is while in terms of innovation, while in terms of global market, we work as a start-up. While we have the service and support that's offered by Nokia as a mother ship so I have the unique, best in both worlds combination of a start-up as well as a large company. >> Nokia is still regarded as one of the finest brands in enterprise networking in the world. So, you said SD-WAN, software defined, wide area networking. >> Correct. It's a term that a lot of people have heard something about, but what are some of the high level benefits, number one, and then number two, why right now? >> Right. If you look at how enterprise connectivity services were offered down the ages, it was, you had to get some kind of a VPN access, whether it was an MPLS or a VPLS access, you got a dedicated leased line, you got a specific device, and that's how you would connect your enterprise branches to the network, and to each other. And SD-WAN, what it does, is it changes that paradigm. It provides secure automated connectivity in line with cloud principles for enterprises across the board. And in terms of why now, I think it is the combination of factors that arise from how the modern enterprise is evolving, and how there is a need to deliver, not just connectivity, but IT services over IP, whether it is access to the public cloud, whether it is access to SAS applications like Office 365, or Skype, or whether it is the fact that you want, not just pure connectivity, but you want application aware connectivity. All those trends coming together have created the demand, and the need for SD-WAN. >> So, you mentioned the cloud principles, and that has been a dominant feature of the industry. We call it the cloud experience, and the cloud experience is typically associated with abstracting and virtualizing hardware. So, in many respects what we're talking about is bringing that same class of technology to the wide area network, the circuits, the access points, everything else, by having a software defined experience that allows the business to rapidly re-configure, based on what its needs, against the access to the underlying WAN network that it has. Have I got that right? >> Absolutely correct. What SDN-WAN basically does is, if you look at a traditional branch router, it has access to a particular type of network, MPLS or VPLS, it has a data plane, it has a control plane, as the management plane by which you configure it. What SD-WAN does is takes those control and management planes, puts it in the cloud, takes the data plane and sort of makes it agnostic to the access technology. So, you run the data service, irrespective of whether you are on internet, whether you are on LTE, whether you are on MPLS, and using those principles of centralized control, centralized management, standardized x86 based devices offering CP services, and voila, you get SD-WAN. That's exactly correct. >> So, I can see what the advantages to an enterprise are-- >> Yep. >> I can reconfigure my business faster-- >> Yep >> Especially business that's more digital in nature. But, is this going to be something that the service providers are going to embrace? >> Absolutely, absolutely. While the enterprise, and the reason for services providers to embrace this, is, for the existing customer this offers an up sale opportunity, for the people who are already on their VPN services, this is an opportunity to broaden the scope from just pure connectivity, this is an opportunity for them to access customers who were, where the cost to serve was to high. Where they just could not go because they were outside of their geographic reach, or outside of their existing business modeling or business plan. >> Or, for example, you might be a mid-size business that required a more expensive circuit, or maybe not quite a more expensive circuit. The cost of setting the circuit up, servicing that customer, et cetera, might have been to great. >> Absolutely, and that's what SD-WAN sort of provides, a level playing field. In some ways, what it does, is it delinks the service, which is the VPN service from the transport, and the transport can be Internet, can be MPLS, and there you have the benefits for the service provider, for the enterprise, in terms of agility, in terms of time to service, in terms of overall cost. >> But, that's inside the nature of telecommunications oriented services. Is SD-WAN going to make it easier for service providers to perhaps start moving into more value added, data oriented services, above just the traditional communication services? >> That is the holy grail. That is really where the service providers are going and that's where enterprises want them to go, and the reason for that is, today, when you look at what an enterprise branch, or an enterprise office needs to operate, there is connectivity, but, then also there is security services, be it firewall, intrusion detection system, intrusion protection system, URL filtering, anti-virus. Take it with on top of that, there is transport optimization, WAN optimization services. There is emergence of IoT, there are wi-fi controllers. All of these services to the enterprise are being offered as a stand alone appliance, virtual or physical, and there is no centralized control. They are extremely rigid, and all of these providers lock-in. What SD-WAN does is, from a tel-co or service provider perspective, is, it also offers a platform to provide all of these services on top of SD-WAN. So, the benefit, it's a symbiotic relationship in the sense that benefits are both towards the enterprise, because they get these services and the service agility. There is resource optimization, source utilization, and cost, and from a tele-co perspective, the ability to sell beyond connectivity. That's one. >> So, if I'm your counter part at a service provider, I can now think in terms bringing up new service, with cheaper connection, lower cost, lower risk, bringing the customer on board, onboarding. At least, if not better, security, et cetera, because, I'm now using software defined approach to making all those connections, and, also, managing the service itself. >> That is correct. What it allows me to do is, in that role, is to provide on demand programmable services. So, for example, a firewall, as an enterprise I can go to a service provider portal and select which of my sites need, which of my branch sites need, firewall at what point in time. What kind of resources I want to assign to that firewall, and voila, on demand, I have it in place. And from a service provider's perspective, it's additional revenue, it's additional services. >> It's a software defined firewall, and it's much more automated, and much better organized, because it brings all the possibilities of software defined automation, which might include some machine learning, pattern recognition, et cetera, to bear on the wide area network world. >> That's correct, that's correct. >> Alright, so, we've talked a bit about security itself. What are, can you just give us one or two clear differences in how the old world handled security, and the software defined world's going to to handle security in the WAN regime. >> Right, so, the thing with security is, the security paradigm has changed massively. In the old world, which wasn't that old-- >> [Peter] It's still here in many respects. >> Still here, absolutely, still here. The security was all about east west, sorry, north south protection, which means that you are protecting towards threats and traffic coming inside and going outside of data center or your branch office, but what has happened, is most of the threats today, most of the attacks today, are focused on east west traffic, which is traffic within branches, from one branch to the other, within the data center itself. That's one. The second aspect is there a multi-cloud aspect to the enterprise IT. You don't access application only on the branch itself. Your applications that run in a data center that's owned by you, private DC, you run application that in a public cloud, AWS Azure, you have access to applications that are offered as software as a service, be it Office 365, Skype, Salesforce, and so on, and that has fundamentally changed the threat surface, or the threat perimeter, that you have to deal with, and you have to now essentially deal with threats that are coming within this whole expanded branch, or enterprise, territory or perimeter. >> So, you're effectively by virtualizing all of these different elements, you're reducing the threat surface. >> Yeah, what we are doing with SD-WAN is a few things. First, and foremost, is the fact that, as you were talking about, these value added services, you can bring these up on demand. You can put a firewall at a particular branch location, for say, guest wi-fi traffic. You can be specific. >> On this point, you can bring a new service up and not have it immediately associated with a whole bunch of capital expense. >> Exactly, exactly. On demand programmable, right, that's one. The second thing is the aspect of PAN network visibility. You also have the ability to see what exactly is going on in your network, the network that's spread across the branch office, a private data center, a public cloud site, and you have full visibility and insight into who's talking to whom, and at what time. >> [Peter] At scale. >> At scale. >> Very very big and very small and we know that there's a whole bunch of mid-size companies that can't afford a NOC type of capability, but, now through >> Yep SD-WAN they get some of the same benefits that the big guys get. >> Absolutely, and the threat aspect here is, using this information, you have closed loop automation, or machine learning, where, as opposed to saying all of my traffic has to go through this possible intrusion detection function, because, once in six months I might have a attack, versus, I see abnormal traffic pattern, and the system automatically optimizes that particular traffic flow to go through this particular function, and that allows it to be much more scalable, that allows for much more on demand, in terms of how we perceive security. not just as a lock that needs to remain on a door at all possible points in time, but, a function that can be instantiated when you need it. >> But, I also got to believe, and test me, I'm going to test you, you tell me if I'm right on this, that the historical conversation between a service provider and an enterprise, centered on the characteristics of the circuits that were being provided. And those circuits were often very much grounded in hardware, associated with the specific links, et cetera. And if you ended up with a security problem, you're now having a whole bunch of haggling and a very complex set of interactions. The minute you bring SD-WAN in on that, now you're talking about being able to use software in a software response, not necessarily a hardware response, to being actually able to identify, mediate, contain, et cetera, security threats on the WAN. Have I got that right? >> Correct, correct. Earlier, the conversation was really in terms of providing a circuit, providing connectivity, and what you were doing was, you were providing this connectivity over some kind of a private IP. That's where you were as a service provider, that's what the service you were offering. Now, you expand that same paradigm with security, with access to cloud, to really offer IT services on top of the IP layer, and that's the fundamental difference, that's the change. >> That break apart between the service and the transport. >> Absolutely. >> So, I kind of said the old way, and you corrected me, and said, wait a minute, this is really the way we're, SD-WAN is trying to make changes, trying to affect a new way of thinking. But there is another technology on the horizon here that actually could really accelerate this process, and that's 5G. >> Mm-hmm >> We're not going to go to far out here, but, tell us what some of the near term, how 5G and SD-WAN are likely to co-evolve, if you will. >> Right, right. They're two sides of the same coin if you ask me, and the reason is, while 5G, as with all the mobile technologies in the past, as we went from 2G, to 3G, to 4G is about speeds and feeds, and absolutely, we'll have more band width, low latency, sure, but what 5G is also about is access to applications from, that is in the cloud, or reside whether closer to the users. And in that sense, what 5G stands out to do, or sets to do, is create network slices, and provide access for applications such as, self-driving cars, such as remote surgery. All of these applications, not just need speeds and feeds, but, require dedicated access all the way from the user, onto an application that runs in the data center. And if you look at that paradigm, how SD-WAN plays in this is by providing a programmable network, on demand services, by providing on demand resource allocation. If you take SD-WAN, if you take 5G, then SD-WAN becomes a component of 5G, because if you are a user, say, conducting remote surgery, and you need access to an application that's in the data center, SD-WAN allows you to provide that overlay network, on top of existing services, and there is a certain quality of service, with a guaranteed access, that is critical to 5G. >> But, as you said, it's a fact that 5G's going to promise such greater device density-- >> Right. >> Within a network-- >> Yes. >> And in many respects, you're going to need SD-WAN to honestly take advantage of the benefits that 5G is going to provide. You may not need 5G to take advantage >> Yup, right. of the SD-WAN benefits, but, you're going to need SD-WAN if you're going to to take advantage of 5G. >> Right. >> So, that kind of suggests, that the companies that start, the service providers, and the enterprises that start, early on this SD-WAN thing, are likely to be in the best position to reap the full benefits of 5G when it shows up. Have I got that right? >> I absolutely believe so, because at the end the day, 5G is all about application-aware networking, right. A remote surgery application versus me trying to access Facebook cannot be treated the same way, and that's where SD-WAN comes in. And especially if you combine SD-WAN with some other technologies that are coming out of a company such as Nokia, then you have a end-to-end traffic engineered path that is been created all the way from the user on to the backend data center that enables all these applications-- >> Coming back to the point about security, there is one group that hopes you treat your Facebook and your surgery data the same way, and that's the bad guys. >> Absolutely, and that's what we need to protect against. >> This is a fascinating subject, and it's going to be a lot of discussion and change over the course of the next few years, as multiple of these technologies co-evolve, but, it's pretty clear that SD-WAN has potential to further accelerate many of the changes that we're seeing in enterprises today as they try to become more digital in nature. >> Sure, SD-WAN is the future and it's here and now. >> Excellent. Once again, Sandhir, I'm sorry. Once again, So, you can cut this, I blew it. Sorry, Chuck. (laughing) Once again, Saurabh Sandhir, VP Product Management, Nuage Networks, an Nokia company, thanks for joining us here in this Cube Conversation. >> Thanks, Peter Thanks for your time. (upbeat digital music)

(techy music playing) >> Hi, I'm Peter Burris and welcome to another CUBEConversation. I'm here with Tom Joyce, CEO of Pensa, from our beautiful Palo Alto theCUBE Studios, and we're talking a bit about some of the trends and most importantly, some of the real business value reasons behind some of the new network virtualization technologies, but before we get there, Tom, tell us a little bit about yourself, how did you get here? >> Okay, thank you, Peter, thanks for having me in today. I am CEO of Pensa, I've been there for about six months, company's about three years old, so I joined them when a lot of the engineering work had already been done and I've been around the tech industry, mostly on the enterprise side, for a long time. I worked with Hewlett-Packard in a number of different roles, I worked at Dell, I worked at EMC and a number of startups. So, I've been through, you know, a lot of different transitions in tech, as you have, over the years, and got excited about this because I think we're on the cusp of a number of big transitions with some of the things that are coming down the road that make a company like Pensa really interesting and have a lot of potential. So, it's been a tremendous amount of fun working in startup land again. >> So, what does Pensa do? >> So, Pensa is a software company and again, we're based here in Mountain View. Most of our operations are here. We also have an engineering team over in India, and they're all people that are focused on networking technology. They have a long history there and what we do is help primarily service providers, you can think the classic telecommunications industry, but also other modern service providers, build modern networks. We're very focused on network functions, virtualization technology or NFE, which is about building network services that are highly flexible in software that you can deploy on industry standard server technologies, you know, kind of cloud native network service development as opposed to, you know, what many folks have done with hardware-based and siloed networking technologies in that industry for a really long time. So, what we help them do is use intelligent automation to make it easy to build those things in incredible combinations with a lot of complexity, but do it fast, do it correctly every time, and deliver those network services in a way that they can actually transform their businesses and develop new apps a lot faster than they could do otherwise. >> So, Tom, I got to tell you, I'm an analyst, I've been around for a long time and every so often someone comes along and says, "Yeah, the tel-cos are finally going to "break out of their malaise and do something different," yet they always don't quite get there. What is it about this transition that makes it more likely that they succeed at becoming more than just a hauler of data to actual digital services provider? >> Yeah, I mean, it's an excellent question. Frankly, you know, it's one that I face all the time. You know, as you traffic around Silicon Valley people are focused on certain hot topics, and you know, getting folks to understand that, you know, we are at a cusp point where this industry's going to fundamentally change and there's a huge amount of money that's actually being spent and a lot more coming. You know, a lot of folks don't necessarily, who don't spend their time there everyday, realize what's happening in these communications service providers, which you know, we used to call tel-cos, because what's happened, and I think, you know, I'm interested in your perspective on this, over time you see long periods in that industry of things don't change and then everything changes at once. >> Yeah. >> We've seen that many, many times, you know, and the disruptions in that industry, which were very public, you know, 15 years ago and then another 10 years before that, those were trigger points when the industry had to change, and we strongly believe that we're at that point right now where if you look at the rest of, like, enterprise IT where I've spent most of my career, we've gone through 15 years of going from hardware-based, proprietary, siloed to software-based, industry standard servers, cloud, and cloud native. >> Peter: And service-based. >> And service-based, right, and the formerly known as tel-co business is late to the party, you know. So, it's almost like that industry is the last domino to fall in this transition to new technology, and right now they're under enormous pressure. They have been for a while, I mean, I think if you look at the industry it's a trillion dollar plus business that touches basically every business and every person in the world, and every business and every person has gone to wireless and data from wire-line and the old way of doing things, and these service providers have pretty much squeezed as much as they can possibly get out of the old technology model and doing a great job of adapting to wireless and delivering new services, but now there's a whole new wave of growth coming and there's new technologies coming that the old model won't adapt to, and so frankly, the industry's been trying to figure this out for about five years through standards and cooperation and investment and open-source stuff, and it's kind of only at the point now where a lot of these technologies work, but our job is to come in and figure out how do we make them, you know, work in production. How do we make it scalable, and so you know, that's why we're focused there is because there's an enormous amount of money that gets spent here, there are real problems. It's not crowded with startups, you know. We have kind of a free shot on goal to actually do something big, and that's why I'm excited about being part of this company. >> Well, the network industry is always, unlike the server and storage industries, always been a series of step functions, and it's largely because of exactly what you said, that the tel-cos, which I'll still call them tel-cos, but those network service providers historically have tied their services and their rates back to capital investments. >> Tom: You're right, yeah. >> And so they'd wait and they'd wait and they'd wait before they pulled the trigger on that capital investment-- >> Tom: Mm-hm. >> Because there was no smooth way of doing it. >> Tom: Right, yeah. >> And so as a consequence you've got these horrible step functions, and customers, enterprises like a more smooth set of transitions, >> Tom: Yeah. and so it's not surprising that more of the money's been going to the server and the storage guys and the traditional networking types of technologies. >> Mm-hm, yeah. >> But this raises an interested question. Does some of the technology that you're providing make it possible for the tel-co or the network service provider. >> Tom: Yeah, yeah. >> To say, "You know what, I can use NFV "as a way of smoothing out my investments "and enter into markets faster with a little bit "more agility so that I can make my customers "happy by showing a smoother program forward." You know, make my rates, adjust my rates accordingly, but ultimately be more likely to be successful because I don't have to put two or three or $10 billion behind a new service. I can put just what's needed and use NFV to help me scale that. >> That's exactly right, I mean, we're really bringing software programmability and devops kinds of capabilities to this industry, us and other folks that are involved in this, you know, this transition, which we think is enormous. I mean, it's probably one of the biggest transitions that's left to happen in tech, and the old model of set it and forget it. I put in my hardware based router, my switch, build out my, make a big investment, that step function you talked about, and depreciate it over a long period of time doesn't work it anymore, because during that long period of time new opportunities emerge, and these communication service providers haven't gotten all the growth because other people have jumped into those opportunities, the over-the-top people, the Netflixes, probably increasingly cloud players and saying we're going to take that growth, and so if you're one of these... You know, there's a few hundred large communication service providers throughout the world. This is an existential problem for them. They have to figure out how to adapt, so when the next thing comes along they can reprogram that network. You know, if there's an opportunity to drop a server in a remote branch and offer a whole range of services on it, they want to be able to continually reprogram that, update those, and you know, we've seen the first signs of that, we saw-- >> And let me stop-- >> Right, as an example of that. >> But not just take a hardware approach to adding new services and improving the quality of the experience that the customers have. >> That's exactly right, they want to have software programmability. They want to behave like everybody else in the world now-- >> Right. >> And take advantage, frankly, of a lot of things that have been proven to work in other spheres. >> So, the fundamental value proposition that you guys are providing to them is bring some of these new software disciplines to your traditional way of building out your infrastructure so that you can add new services more smoothly, grow them in a way that's natural and organic, establish rates that don't require a 30-year visibility in what your capital expenses are. >> That's right, I mean, so one of our, you know, our flagship customers is Nokia. Nokia you can think about as kind of a classic network equipment supplier to many of those service providers, but they also provide software based services through things like Nuage that they own and some things they got from Alcatel-Lucent, and they do system integration and they've been kind of on the leading edge in using our technology to help with that of saying, "Look, let's deliver you "industry standard, intel-based servers, "running network functions in software," and what we help them do is actually design, validate, build those capabilities that they ship to their customers, and you know, without something like Pensa... Somebody has to go in and code it up. Somebody has to really understand how to make these different parts work together. I've got a router from one place. I've got a virtual network function from someplace else. Interoperability is a challenge. We automate all of that. >> Peter: Right. >> And we're using intelligence to do it, so you can kind of go much faster than you otherwise could. >> Which means that you're bringing value to them and at the same time essentially fitting their operating model of how they operate. >> Exactly, yeah. >> So, you're not forcing dramatic change in how they think about their assets, but there are some real serious changes on the horizon. 5G, net neutrality and what that means and whether or not these service providers are going to be able to enter into new markets, so it does seem like there's a triple witching hour here of the need for new capital investment because those new services are going to have to be required, and there's new competitors that are coming after them. We like to think that, or we think in many respects the companies that are really in AWS's crosshairs are the tel-cos, and you guys are trying to give them approach so that they can introduce new agility or be more agile, introduce some services, and break that bond of rate-based, capital investment-based innovation. >> Yeah, exactly right, and also, frankly, break the bond of having to buy everything from the same tel-co equipment provider they've done for the last 20 years in extraordinary margins. People want to have flexibility to combine things in different combinations as these changes hit. You know, 5G, you mentioned, is probably the biggest one, you know, and I'd say even a year ago it was clearly on the horizon but way out in the distance, and now almost every day you're seeing production deployments in certain areas, and it is going to fundamentally change how the relationship works between businesses and consumers and the service providers and the cloud people. All of a sudden you have the ability to slice up a network, you have the ability to program it remotely, you have the ability to deliver all kinds of new video-based apps and there's a whole bunch of stuff we can't even conceive of. The key thing is you need to be able to program it in software and change it when change is required, and they don't have that with technology like this. >> That's right, and 5G provides that density of services that can actually truly be provided in a wireless way. >> Exactly. >> All right, but so this raises an issue. Look, we're talking about big problems here. These are big, big, big problems, and no company, let alone Pensa, has unlimited resources. >> Tom: Hm. >> So, where are you driving your engineers and your team to place their design and engineering bets? >> Yeah, I mean, look, there's clearly a set of problems that need to be solved, and then there's some things that we do particularly well. We have some technology that we think is actually unique in a couple of areas. Probably the heart of it is intelligently validating that the network you designed works. So, let's say you are a person in a service provider or you're an SI providing a solution to a service provider, you make choices based on the requirements, because you're a network engineer, that I'm going to use this router, I'm going to use a Palo Alto Networks firewall, I'm going to use Nginx, I'm going to use Nuage, whatever that combination is, so I've got my network service. Very often they don't have a way to figure out that it's going to work when they deploy it. >> Peter: Hm. >> And we build, effectively, models for every single element and understand the relationships of how they work together. So, we can, you know, pretty much on-the-fly validate that a new network service is going to work. The next thing we do is go match that to the hardware that's required. I mean, servers, you know, they're not all the same and configurations matter. I mean, we know that obviously from the enterprise space and we can make sure that what you're actually intending to deploy you have a server configuration or underlying network infrastructure that can support it. So, our goal is to say, you know, we do everything, frankly, from import network services or onboard them from different vendors and test them from an interoperability standpoint, help you do the design, but the real heart of what we do is in that validation area. I think the key design choice that we are making, and frankly, have had to make is to be integratable and interoperable, and what that means is, you know, these service providers are working with multiple different other vendors. They might have two different orchestration software platforms. They might have some old stuff they want to work with. What we're going to do is kind of be integratable with all of the major players out there. We're not going to come in and force, you know, our orchestrator down your throat. We're going to work with all of the major open-source ones that are there and be integratable with them. You know, we believe strongly in kind of an API economy where we've got to make our APIs available and be integratable because, as you said, it's a big problem. We're not going to solve it all ourselves. We've got to work with other choices that one of these customers makes. >> So, we like to say at Wikibon that in many respects the goal of some of these technologies, the NFV software defined networking technologies, needs to be to move away from the device being the primary citizen to truly the API being the primary citizen. >> Mm-hm. >> People talk about the network economy without actually explaining what it means. Well, in many respects what it really means is networks of APIs. >> Tom: Yes. >> Is that kind of the direction that you see your product going and how are you going to rely on the open-source community, or not, to get there, because there's a lot of ancillary activity going on in creating new inventive and innovative capabilities. >> Yeah, I think, I mean, that's a really big question and to kind of tackle the key parts of it in my mind... You know, open-source is extremely valuable, and if you were a communication service provider you may want to use open-source because it gives you the ability to innovate. You can have your programmers go in and make changes and do something other folks might not do, but the other side of the coin for these service providers is they need it to be bullet-proof. >> Peter: Right. >> They can't have networks that go down, and that's the value of validation and proving that it works, but they also need commercial software companies to be able to work with the major open-source components and bring them together in a way that when they deploy it they know it's going to work, and so we've joined the Linux Foundation. We're one of the founding members of Linux Foundation networking, which now has open NFV, and has ONAP, and a number of other critical programs, and we're working with them. We've also joined OSM, which is part of the European Telecommunications Standards Institute, which is another big standards organization. I'm not aware of another company in our space or related to NFV that's working with both, and so we feel positively about open-source but we think that there's a role for commercial software companies to help make it bullet-proof for that buyer and make... If you are a very large service provider you want somebody that you can work with that will stand behind it and support it, and that's what we intend to do. >> Well, as you said, your fundamental value proposition sounds like yeah, you're doing network virtualization, you're doing the, you're adding the elements required for interoperability and integration, but also you're adding that layer of operational affinity to how tel-cos, or how service providers actually work. >> Tom: Mm-hm. >> That is a tough computing model. I don't know that open-source is going to do that. There's always going to be a need to try to ensure that all these technologies can fit into the way a business actually works. >> Tom: Yeah. >> And that's going to be a software, an enterprise software approach, whoever the target customer is, do you agree? >> Yeah, we use a great partnership between the open-source community, commercial software companies like us, and the service providers-- >> Peter: Right. >> To build this thing, and we've seen that happen in enterprise. Devops was that kind of a phenomenon. You have winning commercial software providers, you have a lot of open-source, and you have the users themselves, and we think a lot of those concepts are going into this service provider space, and you know, for us it's all about at the end of the day we want to have the ability to get people to do their job faster. You know, if things change in the industry, a service provider using Pensa or an SI using Pensa can design, validate, build and run that next thing and blow it out to their network faster than anybody else. >> Peter: Time to value. So, it's time to value. >> Right, time to value. >> And certainty that it'll work. >> And in many respects, at the end of the day we all want to be big, digital businesses, but if you don't have a network that supports your digital business you don't have a digital business. >> That is correct. >> All right, so last question. >> Tom: Yes. >> Pensa two years from now... >> Tom: Hm. >> What does it look like? >> Yeah, I think we're, our goal right now is to line up with some of the leading industry players here. You know, folks that service those large service providers and help them build these solutions and do it faster. I think our goal over the next two years is to become a control point before service providers and again, folks like SIs that work for them and sometimes help run their networks for them. Give them a control point to adapt to new opportunities and respond to new threats by being able to rapidly change and modify and roll out new network services for new opportunities. You know, the thing we learned in the whole mobile transition is you really can't conceive of what's next. What's next two years from now in this space, who knows? You know, if your model is buy a bunch of hardware and depreciate it over five years you won't be able to adapt. We want to be-- >> You do know that. >> We know that, you know, we want to be one of those control points-- >> Peter: Right. >> That helps you do that quickly without having to go wade into the code. You know, so our goal is to allow... You know, our whole tagline is think faster, which means use intelligent technology to drive your business faster, and that's what we intend to be in two years. >> Excellent, Tom Joyce, CEO of Pensa. Thanks very much for being on theCUBE. >> Thank you very much. >> And for all of you, this is Peter Burris. Once again, another great CUBEConversation from our Palo Alto Studios. Look forward to seeing you on another CUBEConversation. (techy music playing)

>> Narrator: Live from San Francisco, it's the CUBE. Covering Samsung Developer Conference 2017, brought to you by Samsung. >> Okay, welcome back everyone. We are here live with the CUBE coverage where Cloud Native and the SmartThings Conference from Samsung Developer Conference. I'm John Furrier, the founder, the co-founder of SiliconANGLE Media. Co-host of the cube here with Redg Snodgrass, who's the chairman of ReadWrite and ReadWrite Labs. >> Hello everybody. >> Also been an entrepreneur, he's done the Wearable World events, done a lot of things in tech, riding the waves. You seen them, a lot of action going on, Redg. Want to get your the thoughts as we wrap up day one of two days of wall-to-wall coverage of the cubes, Samsung Developer Conference, a lot going on. You know Samsung, they're trying to play their best hand that possible. Obviously, they're not going to come out and say, We're not really ready for primetime, for the cloud. But the reality is, they're not ready for primetime for the cloud and IoT. However, huge strides in positioning, messaging, and the self awareness of their stove pipes. They are series of stove pipes that they've recognized, We've got to make this a 2.0 Bixby that crosses across all of Samsung, open up IoT. >> Redg: Which I thought was great. >> Open ecosystem, everything else, to me, is a work in progress, kind of, cover the, hide the ball, a little bit, I mean, what's your thoughts? Do you agree or what's your reaction? >> Oh man, I was on a panel earlier today. And somebody was like, oh, this is great. And I wanted to go back to, back when we did the open API service with Alcatel-Lucent, when we roll out all this stuff for the telcos. I mean, it's just, it's a lot of hype, initially. But what I do like about it is it seems like there's a dogged commitment to creating all the different documentations necessary and bringing that in, I mean, if they really put the full marketing weight behind it, this could get really interesting really fast. I mean, they own almost every device in your home already. >> Well, I said the word hide-the-ball. Maybe I should take a step back and not be too harsh. What I mean by that is, they're not hiding the ball on purpose, I think they're, by design, and I think Greg mentioned this earlier. Greg Narain said, they're doing it by design. And I think that that's a good call. SmarterThings is a good positioning because it highlights multiple devices and connecting it together. I think if they played the data card and the cloud too much, they would've overplayed their hand, and it's not needed. I mean, do you think it's needed? I mean, I don't think it's needed. >> Well, one of the biggest problems with IoT right now is that you have multiple different silos creating data. And then all those data silos have to figure out how to come together and talk about it. I mean, it seems like they're taking a step out, and saying, hey, we want to build that solution. Which is great, I'm more interested in the orchestration between different OSs, like, how are they really going to do that? Because it, we talked a lot about, when you build one of these ecosystems, you're really just building an economy. And the more open that you let your economy, right, the more business models come in, the more people that can be there. And so, if we were to start thinking about these OSs as real economies, like what do you need to have economy work? >> Well, I think this is why, we were talking earlier, I think that you had a good point. I think that validates what I'm thinking out loud here, which is, why play the data card. They don't need to because it's still open-book. They still got to figure it out, and that's not a bad thing. They play with their best hand, which is the consumer hand. >> Redg: It's consumerism is where they're at >> The devices are awesome, the screen on the phones are phenomenal, they got TVs. They got a little bit of a family hub going on with the living room, kitchen thing, with the refrigerators. That's IoT, they got healthcare because it's a device issue. So they're working their way from the consumer edge into the industrial edge. Now, if you're in the IT world, you have security problems. So most people that we talk to, at the humans, they say, hey John, my plate is full, I got to staff up my DevOps and my application developers. I got to unbolt security from my IT department, make that report to the board as a profit center now. And I got all this machine learning and Cloud Ops, and you want me to do what? Like, instrument my entire factory with this IoT thing? So people are holding the brakes. >> Well, I mean think about it. Every day, right, you're confronted with another executive that has like fallen on a sword of a major security hack, a major security issue. And so, as an executive of a major like business unit, with a technology group in front of you, you're sitting there making all these decisions every day. And it used to, you used to come and say, okay, we're going to make decisions every eight, nine months. And you have this big waterfall thing in front of you. And you know that, from your vendors, that. >> John: It's predictable >> Everything was predictable, and now it's like, oh man, I got to get into this Google Glass stuff, and I've got, no, now it's wearables, and wearables, that doesn't work, I need my IoT infrastructure stuff. And so we're moving the court, you know, away from all these CIO, CTOs consistently of what they need to think about next. >> It's interesting, if you look at the stack, go back to the old 80s OSI model, you got the lower level stack, middleware, and then application stacks. If you follow the data, and the networks, and the packets, how it moves, you can almost see the trends, batch versus real time. And I think what we've seen in the big data world, in data sciences, which can be analytics, obviously specialty industry. But the role of data and realtime, self-driving cars, really highlights this really huge wave coming, which is how that people dealt with data and software, the relationship between software and data was different. You store it in a database, build the database, call the database, get the data out, load it in, slow, monolithic, siloed. But now you have data that you need in really low latency at any given time, in any different app, from any different database, in less than a millisecond how do you do that. >> Well, think of it. >> John: That takes intelligence. >> About two years ago, I had a great conversation with a big packet moving company that managed most of the packet movement for most of the internet. And we were talking about, what does it look like per person in the US in the next like three or four years? And it could be up to a petabyte a day at a per person. Now that sounds awesome because if you look at all the different like videos we watch, it's like, oh, that's great, really cool flying car. You know, connecting windows, no one's really doing the math on that. And if it's a petabyte per day per person, like in the US a year even, or you know. I could see models where it could be a month. Think about what that does to the network load. We just don't have the math to be able, you know, possibility to handle that. >> This is why the decentralization with Blockchain is interesting. Even though Blockchain is hyped up, I think it's fundamental to the internet, as this Dr. Wong from Alibaba, who told me that last week. He said it was like a TCP/IP, I agree with him because you have distributed computers, which we know about. We've been there, done that, but now you got decentralized and distributed, two different concepts at the same time. That's a fundamental paradigm shift. >> Well, I mean it's just, so, I mean, you got to. >> It's intoxicating to think about what that disrupts. >> No, no, I love it, I mean, honestly, I've fallen in love with narrow band networks the last week. For some reason, I'm the weirdest person on the planet. Because it's such a solution for security. It's such a solution for a lot of this back calling and data that we're going to have. It'll be interesting to look at, but when you think about the pure math on this. >> John: Are you back calling data or are you back calling compute? >> Oh, well it's so. >> That's a different conversation. The trend is, don't move the data. Throw the compute at it because compute is, this is an architectural renaissance happening, people are re-imagining. >> How many, how many startup. >> In global infrastructure. >> Execs can even like draw architecture? Right, with all the lame startups, I mean, when was the last time you saw like somebody pitch. When they came to pitch, it's like, let me talk about my architecture. >> John: That should be the first slide. >> It should be the slide that you talk about as an executive and everything, I don't see. >> If he can't get on the whiteboard. >> Startups deliver architecture. >> If you can't get on the whiteboard and lay out an architecture on fundamentally the core engine of your technology, you shouldn't get funded. >> Well, so that is a major issue that's happening right now because I do think that we have this group think where we've disallowed a lot of R&D thinking. We don't do longterm R&D before we get a product to market. And now, like all. >> John: Sometimes you can't. Sometimes you have to sprint out and put a stake in the ground and iterate. >> Think about all of the connected device product. How do you test the connected device product to scale? Right, I mean the iPhone, you know Samsung, everybody has all these devices out there, they're getting this data, it's coming in they can actually iterate on that product and make decisions, right? >> Well, that brings up a good point. We saw this at the Cube at VMWorld. For the first time we heard people grumbling in the hallways like, you know, I love the ENC tries, but they just haven't tested this use case. And the use case was a new workload that had unique characteristics. In this case they needed low latency. It was an edge device, so it was mandatory to have no latency with all this was trickling data in. But in this case, they had set up their virtual SAN in a tiered basis. And they needed a certain hardware configuration with vSAN. And they've never tested the hardware stack with the software stack. So it's just one of those things that the hardware vendor just never imagined, you can't QA the unknown. So this is where I'd see Samsung doing things like in-chip and seeing what Intel's doing with some of their FPGA stuff. You can see that these infrastructure guys got to bring that DevOps concept to the consumer world. >> Redg: Oh, it's going to be so hard. >> Which is programming the. >> Redg: So hard. >> The hardware at will. >> Yeah, well. >> John: Like the cloud DevOps ethos. What do you think of that? >> Yeah, no, no, no, look, I mean, I'm such a big fan of being able to get your product in people's hands, to be able to see the use cases, develop them out and push that forward. You know, big corporations can do that. You have 10 iterations of almost every iPhone right now, with thousands of engineers iterating on it. So when you look at like the competitor, which is your device right now, versus every other piece of IoT technology that isn't been perfected or anything. Our biggest issue is we're driven by the success of the smartphone for every other piece of technology today. And that's, that makes it hard to drive adoption for any other devices. >> So I get your thoughts on this, 'cause we wrap up day one. Obviously, let's talk about the developers that they're targeting, okay. >> Okay. >> The Samsung developers that they're targeting is the same kind of developers that Apple's targeting. Let's just call it out, however, you see voice-activated touch, you're seeing the services tools, now they're bringing in an IoT. You're not hearing Apple talk about IoT. This is unique, you got Google onstage, wink, wink, hey, everybody we're here, we're Google, Android, coming together. What is in the mind of the developer in the Samsung ecosystem right now, what's your take on it, what's the psychology of that developer? >> I built an app at one point in time. It was dating app a long time ago, right, with some other guys, they built it, I was just the mouth. It's called Scout and we were on the Simian platform, and the iPhone, and we were on web, we were on mobile web. And in the iPhone app store, all with one engineer. And it was really hard because we had real-time chat. It was just so much crazy things. At the end of the day, what always matters is, again, you're building economies, you're not building fun playgrounds or anything else like that. And if your economy is, your platform is the easiest to use, it has the capabilities and advantages that are the norm, right, you'll win. Bass Diffusion is great it's this guy out here, he won a Nobel prize, but what Bass Diffusion says, in order for you to win in a market, you need two things, imitation and innovation. Imitation, for instance, in TVs, is your TV black and white, is it color. As things move up, innovation eventually overtakes, and always becomes innovation. So when you look at like what's needed in market, the platform that is the easiest to use, the platform that has the most capable imitative qualities, it's just very easy for you to push things to market universally from OS to OS, along with certain pieces of innovation around business models, certain API capabilities that may make it easier for them to deliver revenues. If those are the things that are delivered, that we see pushed out, a good blend of imitation and innovation, the win. It's that person that actually can deliver it. >> Well, we're seeing gaming in entertainment really driving change, Netflix earnings just came out. They blew it away again, you're seeing the cord cutters are clearly there. >> So much for Disney, right? >> E-commerce, yeah, I mean, Amazon's still got to make some moves too, even though they were still winning. No one's really falling out of the chair for Prime. I mean, no, I don't know a lot of people who rigorously turn on Prime, they shop on Prime, but not necessarily watching any entertainment. So I'm a little critical of Amazon on that. But, then again, but Amazon's doing the right thing. Netflix, Amazon, YouTube, you're seeing a culture of digital entertainment shifting. E-commerce is shifting, and now you got web services. I think Amazon encapsulates, in my mind, a great strategy, retail and services, but if you extend that out to the rest of the world, voice-activated apps, you can blend in commerce entertainment, you can replicate Amazon. I mean, they could replicate everything out there in the open. >> Amazon is so good at understanding where they fit in the stack and then, pushing the edge case further and further and further along. They're really brilliant, versus like VMware that's like, oh man, we can make apps, no problem. They went to make apps, and it didn't work out so well, they're great with VMs, so. >> John: They're great with operators in the enterprise, not so much with DevOps. >> No, no, no, no, and it's. >> They got pivotal for that now. Michael Dell bought everyone up. >> Yeah, exactly. It's understanding where you fit in the stack and being able to take advantage of it strategically. I mean, like I said, I think Samsung's positioned really well, I mean, I wouldn't have come and hung out with everybody if I was like, ah, I'm going to be bored all day. There's a lot of really exciting things. >> We got a lot of eye candy, no doubt about it. I love their TVs, love their screens. The new Samsung phone, is spectacular, you what I mean. >> I'm pretty ecstatic. >> It was the first phone that wanted me to get transferred off my iPhone. And I ended up getting the little junior Samsung here, but. >> Oh no, well it'll be interesting as they start to connect their platform together as all a lot of these other developers start pushing the pieces of their strategy together. Remember, it's like whenever you throw a strategy out here like this, it's like you have a big puzzle with a lot of empty pieces. >> I mean, the question I have for you is, let's just close out the segment. What do you think, what area should Samsung really be doubling down on or peddling faster, I should say. What should be developing faster? Is it the open APIs, is it the cloud? And they got to get the open ecosystem going, in my opinion. That's my take, what do you think they should be working on the most right now? >> Yeah, I mean like look, cloud is going to be really, really, there's a lot of competitors out in cloud. There's a lot of multiple, there's a lot of choices, right. Where I've seen them like really do well, I'll go back to the fact that I firmly believe that Google never really monetized the Android that Samsung did that a lot better. And so, by looking at the different points in the market, where they're good, I mean, their ecosystem is solid. I mean, yes, I mean it seems like the sexy thing is Apple, but I've talked to several developers, and I know where they make their money, and they do a strong amount of revenue, if not equivalent to where the iPhone is, at least from what I've heard so far. >> The android market share it's not shabby at all. >> Not, so. >> Damn good. >> So they've, they've been able to do this, like, from that, taken that Android stack, applying that imitation and innovation on top of it, fascinatingly so, I wouldn't count them out for this. And I'm pretty encouraged to see all the other aspects, but I like the ecosystem built out too. >> Redg Snodgrass, ReadWrite Labs, quick plug for you. What's going on in your world? Got some recent activities happening, please share update. >> So, yeah it's great, so we just launched our IOT revolution event series where we look at the atomic unit of different markets. And what that means is, we find the real buyers and sellers, a lot like what Debbie Lann, who I love, did. And we look at the buyers and sellers together, along with the top series A startups, all around newsworthy issues. And so, whatever it's like, is it hacking and Russia. You know, then we'll get cybersecurity experts up, and we'll talk about those issues from an executive point of view. And that's the thing that's making me most excited because I get to have all these conversations with people. It will be on video, onstage, November 13th, is the first one, it's a private event, but we'll work out anybody. >> Where's it going to be? >> It'll be in San Francisco, around 100 Broadway. So it's kind of a quiet thing, but I'd love for everybody to come if you're interested. >> It's a quiet thing but I want everyone to come. It was, not going there, too many people are going. >> It's like my parties, right? >> It's like a Yogi Berra. Well, thanks for coming out, appreciate, wrapping up day one of coverage The Cube. This is Samsung Developer Conference 2017. Hashtag SDC2017, that's what they're calling it. Lot of great guests today go to YouTube.com/siliconangle for all the great footage. And also check the Twitter sphere, lot of photos. And shout-out to Vanessa, out there has like helped us set everything up. Appreciate it and great to the team. That's day one wrap up, thanks for watching. (upbeat music)