(cheerful orchestral music) >> Hi, I'm Peter Burris and welcome once again to the CUBE Conversation from our studio in Palo Alto, California. With all CUBE Conversations, we pick a topic and we get down to the meat of it and we're going to do that today as well. The topic today is the role that data's playing in an organization, but even more importantly, the changes that the organization has to make to take advantage of data assets. And to have that conversation, we've got Harry Glaser, who's the CEO and Co-Founder of Periscope Data, with us today. Harry, welcome to theCUBE. >> Hey, it's great to be here, thank you Peter. >> So introduce yourself. Who are you? >> Yeah, I'm Harry, I'm the Co-Founder and CEO of Periscope Data. So, we started this company gosh, six years ago in my CTO's second bedroom. And we've scaled it to about 1,000 customers, about 150 employees, all in downtown San Francisco. >> And Periscope Data does? >> Yeah, we make a platform for data teams. So data teams play this increasingly important and powerful role in organizations where they drive the way the company makes decisions with data. And we make their system of record, their source of truth, the platform that they use to do all their work within those organizations at places like HBO, and Uber, and Harvard. >> Okay, so let's talk about data teams. >> Sure. >> 'Cause it starts there. A lot of organizations are trying to adopt practices >> Yup >> Associated with better utilization of data and are failing partly because it's catch-as-catch-can. >> Sure >> It's everybody's responsibility to figure out what data is, where it came from, what the value is, and how their going to use it. >> That's right. >> That sounds to me like, the notion of a data team says, No, we have to bring some degree of >> Yup >> At least centralization in thinking >> Yup. To make sure that we're exploiting data properly. Have I got that right? >> Yeah, that's exactly right Peter. So, often an organization will start working with data 'cause someone somewhere in the organization wants to. Maybe it's marketing. They hire a business analyst into marketing, then sales decides to do it, then they hire someone into sales. But to your point, it's catch-as-catch-can. So, marketing is looking at one view of data from the marketing world. Sales is looking at another view of data from the sales world. They get into big fights about what the truth is. There's no-one to arbit. It goes all the way up to the CEO, who has no fucking idea what's going on with this fight. Right? And that ultimately gets solved when you hire a centralized data team, ideally reporting to a Chief Data Officer, who can form a source of truth and form best practices in the organization for how they work with and make decisions with data. >> And presumably, take some responsibility for diffusing those practices >> Yeah >> And diffusing the data about the data to the rest of the organization. So you get more common utilization. >> That's right. So if you fast-forward a few years, now all the data is centralized and the data team is centralized, and they have formed a source of truth. Maybe they got into a fight about how many leads marketing delivered to sales. Marketing analyst says 10, sales analyst says we only got five. Now you have one source of truth, one piece of data that tells you how many leads. Analysts farmed out to the rest of the organization but farmed out from that central team where they have best practices and sources of truth. >> Okay so, presumably, there is some degree of maturity or questions of maturity >> Yeah >> Associated with these teams. Let's start with day one, I'm going to do this. What's the difference between that and someone who's a little bit further along? >> Yeah >> What's the first thing that a corporation needs to do day one? >> Yeah, day one is, if you're doing it right, day one people do all kinds of things that turn out to be wrong. But day one, if you do it right, you hire that Head of Data first and you empower them first to build that organization and to build that sort of center of excellence. A big mistake that you'll see is either hiring data people to fuse the organization or hiring a data team but stuffing it somewhere like Finance or IT. Those are service organizations. They are not driving their own, sort of, source of truth and business practice through the organization. You want your data person reporting to a COO or a CEO, and you want them to be empowered throughout the organization. >> So the way I've always thought about chief, and you tell me if this corresponds. >> Sure >> A chief is an individual who's in a business, who has responsibility for generating a return on the assets under their control. So the Chief Financial Officer is responsible for generating returns on assets. >> Yeah >> Returns and capital. You know, the COO is returns on people and the operations of the firm. Chief Data Officer, presumably then, would be responsible for generating a differential >> Yeah >> Return on data assets. >> Absolutely. So the CDO will take control of all the data being generated by all the various systems in the firm. Right? And then they'll be, like to your point, they'll be responsible for generating a return. Which is the returns from the improved decision making at the company. If we spend all this time hiring this data department and spend all this time logging and storing this data and we don't actually make better decisions at the company. What is the point? The whole point is that everyone else at the company now has an ability to make much better decisions. And that, those decisions lead to profits which are the return on the data. >> So, I'm the CEO Board, I don't have this today, my first job is to hire a CDO >> Yes. >> And give them responsibility for increasing the returns on the data assets within my business. >> So you'll, yes. >> So lets talk about, one year later >> Yeah. >> We've hired a bunch of people. How is a more mature data team operating? >> Yeah, so there's a number of things and they all happen in lockstep. You will have data people, who are much more mature and advanced in their careers and their skill sets. People are advancing in their maturity. Your first analyst might be really good with Excel pivot tables. Few years later, you're going to have people under the Chief Data Officer who are data scientists who work with machine learning and AI capabilities, miles beyond your Excel pivot tables. So that's one thing. The other thing is how are decisions made throughout the company? So on day zero, your chief revenue officer maybe comes into a meeting and goes, you know we're going to sell this way, because this is how we sold this way at my last company, and I know it's the right way to sell based on my years of experience. Fast forward five years and they're going to go, the data shows me that we need to sell in a different way. That we've been selling in a couple of different ways and this is the most profitable way, and I can see that in the data. And so the CEO should expect as a return on hiring this data organization, the people who are coming to him or her with their decisions are backing it up with data, as a result of this CDO and their organizations work. >> Yeah, and that doesn't diminish the value of that Chief Revenue Officer's experience. >> Of course not >> But it just gives them an opportunity to test a proposition, see if it worked, test a proposition, and improve things over time, right? >> A good test is, the CDO and their people should be the most popular people in the organization. Everyone loves them, because they bring free value all the time. The CRO has probably almost certainly comped on the revenue they generate for the company. So if they've got data scientists helping them generate more revenue, that's awesome, that's money for the CRO. That's great, so they should be very popular. If you have a CDO who's getting in everyone's way and causing friction, you probably don't have a good one, or something is wrong. >> Okay so the CDO is now installed, their power and their influence and their authority is accepted >> Yep >> By the organization. >> Yep >> Practices are changing. >> Yep >> Now, the next level of maturity, what are they focusing on? >> Yep >> Let me give you a little bit of a background as I think about this because I look back at history and you see over and over and over functions that have processes. >> Yep >> Some that come from the outside, some might be developed inside, and they try to instantiate, they try to manifest those processes in software. >> Yeah >> Because it helps improve the productivity of their people, the certainty of the operation, the certainty of execution. >> Yep >> So I'm into this process, but it's taken me some time. What do I do to accelerate my maturity? >> Yeah so I think there's a number of things that it's driven from the people. But if you start, you know, day zero, maybe you can't even get the data that you want or you don't know that you want the data. The CDO helps you, gets the data and helps show you what it is, and you at least understand the data and you can start making some decisions. Then they start joining the data together. So maybe I was like, okay, now I can see what I'm spending on marketing and what the return is, whereas I couldn't before. But you still can't say, okay what's my total spend to acquire a customer? Until you merge the marketing and the sales data. So now you merge into a single source of truth, you resolve all the conflicts and differences between the organizations, that's good. Then you start predicting the future. And this is where the CDO kind of takes control of the discussion. Because previously we were going, maybe we started from a place of sales and marketing, we wanted a thing and can't have it. Then, the CDO staffs up, builds the technology and answers the questions, and this is where they get popular. But then they start driving the discussion. Well, hang on, I can hire some data scientists and I can build some machine learning, and I can actually predict based on all the inputs, run all the scenarios for the future of the business, and go, this scenario is best. So let's actually invest this way. And so now they're proactively bringing differentiated value based on technology that the company, and the capabilities of the company, did not even know about until they started hiring this team. And so you know, in a very mature organization the data team is actually driving the business towards what decisions they should be making, and is kind of in a much more powerful position, even than some of the other chiefs. >> But I want to talk a little bit about that notion of the future. >> Yeah sure. >> Because as someone who has been something of a student of the way that business uses data historically, it's interesting that a lot of the OLTP generation was recording what happened. >> Yes >> So it's really using technology to better understand the past. >> Yep. >> And then personal productivity in many respects, was how do I build a consensus amongst different thinkers about what's going to happen a little bit further in the future. >> Sure. >> So the Excel pivot table, often is used to forecast two, three years out. >> Yeah. >> Get people to agree that that's where we want to go. >> Yep. >> But you're talking about a more immediate notion of a future. The future that's relevant to the Chief Revenue Officer. >> Yeah. >> Like in the next quarter, or the next couple of quarters, have I got that right? >> It's both. I would say yes the Excel pivot table is used to forecast the future, typically in a relatively straight line fashion from what's happened in the past, and that's great. But when you really have a mature data team and you really have a strong source of truth, you might say actually, you know, the thing that drives revenue more than anything is not the historical revenue trend, but it's the number of active users of your product. Let's say, for example. Or does the viewership of your video get past the halfway mark? Those are your best customers and if we can drive more of those customers we get a sort of differentiated value. And so that requires a more sophisticated technical approach than the simple Excel pivot table. >> Right but still, at the end of the day what you're doing is you're allowing data to drive your next action. >> Yes, that's right. >> And that's different from a historical process orientation. >> That's right. >> Where you let the process drive your next action. >> That's exactly right. And to your point you end up requiring a more agile organization, because you're going to be getting more and more insights over time, and changing direction based on those insights. As oppose to saying, here's my process, let's just run the process. >> Okay so, you've mentioned a couple of times the notion of a system of record for the CDO. >> Yeah >> And you know, ERP was kind of the CFO's software platform for running the finance of the business. What role does Periscope Data play in the world of the CDO? >> Yeah I mean I think your analogy is exactly right. So all of these chiefs, all of these departments will have their systems of record. ERP for the finance team, CRM for the sales team, marketing automation system for the marketing team etc. And we provide that system of record and that source of truth for the data team. And that looks like a lot of different things. Tooling around, integrating the data so that you can build a single source of truth with data. Storage options, in fact, multiple storage options for the data itself, so that you can run the analyses. The actual system that runs the analyses, so you might be writing SQL code or Python code in the product to perform the analyses, integrations with machine learning systems so that you can predict the future. And all the different ways that you want to share and publish the data out in the organization, all that happens together in Periscope Data, Chief Data Officer is managing all of those workflows so they can manage the whole flow of data through the organization within the product. >> So as a CEO, you know, pretend CEO right now. >> Sure. >> I hire my CDO, I empower them to generate a return on data. >> Yep. >> I give them the authority to do so. >> Yep. >> And at some point in time I have a team that's being diffused into the organization, but all this can be accelerated if I get the software that will help my people be more successful. >> Yes, in fact I would say you probably can't get past a certain level of maturity without differentiated software like Periscope Data, because it simply breaks. The volume of data you want to be working with in that top end of the maturity curve is so large, and the sophistication is so large, that you really do need differentiated tooling at that point. >> Okay so how is this going to change industries? >> (laughs) Yeah. >> So I've got all this stuff organized, because I have a thought I want to run by you. >> Sure. >> But from your perspective, how is this going to change the notion of industry? >> Yeah so I think that in every industry you at this point have sort of digital disruptors and you have the old guard. And the old guard is not necessarily dead, and I think you can see, we were talking moments ago about Walmart and the transformation they've made to digital and how that's become a real focus of the company. Great example of a company from the old guard that is by no means dead. But you do have to embrace the idea that the way you made decisions 10 years ago is not the way you're going to make decisions now. And by hiring this organization and empowering them with differentiated tooling, what you can do is have a much more data driven culture as a result. So you will watch them, as they get more mature with data, transform the way your company makes decisions. And it is a cultural change, right? The company becomes much more nimble and agile, probably has less management hierarchy and fewer layers, all of that kind of stuff. And it enables you to survive and thrive in a world where you are constantly being challenged by new digital disruptors. >> Yeah and I'll tell you, here's my observation on the whole concept of industry. Industry is a general way of describing how assets are organized. >> Makes sense. >> So a financial services forum has certain classes of asset, so your airplane manufacturer, >> Yep. >> Certain classes of assets, or a bottling company. And you can look at each of these different industries and say, oh, they have this common approach to thinking about what is valuable and how the assets get work, perform work. >> Yep. >> Data reduces asset specificity. >> Yep. >> Asset specificity is the degree to which an asset can be applied to a limited number of purposes. >> Yep. >> Data reduces that, makes assets more programmable, gives us a better job of monitoring. >> Yep. >> If we think about that so that the industry is a function of assets, therefore asset specificity, as more people do more data it reduces the barriers. It takes certain respects, it limits the impact of industry, and you end up with new types of competitors. >> Yep. >> New types of disruptors, that you didn't know about. What do you think about that? >> I think that makes sense, I mean we were talking also moments ago about the return on these assets right? And so, the CFO of a major public company will be primarily responsible for investing the company's financial assets across the globe, in a way that maximizes the return on those financial assets or minimizes the loss of those financial assets. And similarly with data, you will start to think about data as an asset, it will be the CDO's primary asset and the return on that investment in that asset will be the profits from the better decisions across the company that you wouldn't have had, if you hadn't had a CDO to steward those assets. >> And the options that are created. >> Absolutely. >> So it's a profit now, but also the additional options that are created. >> Yep, yep. >> And that's where the industry notion starts to get very fuzzy. >> And like all assets, the return on those assets will compound over time. We'll get the increased optionality, we'll make better decisions. You know, because of the increased optionality and the better decisions, there's now even more optionality, we make a good decision again, right? Then it starts to build on itself, and you end up in a much better position relatively quickly. >> Okay so Harry, one last thought, one last question. What's 2019 hold for Periscope Data? >> (laughs) A lot of growth first of all, so it's nice to be a high growth technology startup, lots of good things happen. But it is a little sort of mind boggling, how much the company changes and how much the team changes, the software changes every sort of six months. And so we will almost certainly double or more our business again, we will move into, I mean, I've mentioned some of our customers, Uber and HBO and Harvard. That is indicative of a trend where we are starting to work with larger and larger customers, and real true enterprise customers for the first time. So I expect that trend to accelerate. And I will say the conversations for us are getting easier, when we started six years ago and we were talking about platform for data teams, people were like, data teams? You know? And now I think everybody understands that there's a big wave happening, and that's been sort of propelling the company forwards. So that's been a lot of fun. >> Alright, Harry Glaser, CEO and co-founder of Periscope Data, thanks very much for being on theCUBE. >> Thank you Peter, I appreciate it. >> You bet. And once again, I'm Peter Burris, and this has been another CUBE conversation. Until next time. (cheerful orchestral music)

>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR, this is Braking Analysis with Dave Vellante. >> Intel's big announcement this week underscores the threat that the United States faces from China. The US needs to lead in semiconductor design and manufacturing. And that lead is slipping because Intel has been fumbling the ball over the past several years, a mere two months into the job, new CEO Pat Gelsinger wasted no time in setting a new course for perhaps, the most strategically important American technology company. We believe that Gelsinger has only shown us part of his plan. This is the beginning of a long and highly complex journey. Despite Gelsinger's clear vision, his deep understanding of technology and execution ethos, in order to regain its number one position, Intel we believe we'll need to have help from partners, competitors and very importantly, the US government. Hello everyone and welcome to this week's Wikibon CUBE insights powered by ETR. In this breaking analysis we'll peel the onion Intel's announcement of this week and explain why we're perhaps not as sanguine as was Wall Street on Intel's prospects. And we'll lay out what we think needs to take place for Intel to once again, become top gun and for us to gain more confidence. By the way this is the first time we're broadcasting live with Braking Analysis. We're broadcasting on the CUBE handles on Twitch, Periscope and YouTube and going forward we'll do this regularly as a live program and we'll bring in the community perspective into the conversation through chat. Now you may recall that in January, we kind of dismissed analysis that said Intel didn't have to make any major strategic changes to its business when they brought on Pat Gelsinger. Rather we said the exact opposite. Our view at time was that the root of Intel's problems could be traced to the fact that it wasn't no longer the volume leader. Because mobile volumes dwarf those of x86. As such we said that Intel couldn't go up the learning curve for next gen technologies as fast as its competitors and it needed to shed its dogma of being highly vertically integrated. We said Intel needed to more heavily leverage outsourced foundries. But more specifically, we suggested that in order for Intel to regain its volume lead, it needed to, we said at the time, spin out its manufacturing, create a joint venture sure with a volume leader, leveraging Intel's US manufacturing presence. This, we still believe with some slight refreshes to our thinking based on what Gelsinger has announced. And we'll talk about that today. Now specifically there were three main pieces and a lot of details to Intel's announcement. Gelsinger made it clear that Intel is not giving up its IDM or integrated device manufacturing ethos. He called this IDM 2.0, which comprises Intel's internal manufacturing, leveraging external Foundries and creating a new business unit called Intel Foundry Services. It's okay. Gelsinger said, "We are not giving up on integrated manufacturing." However, we think this is somewhat nuanced. Clearly Intel can't, won't and shouldn't give up on IDM. However, we believe Intel is entering a new era where it's giving designers more choice. This was not explicitly stated. However we feel like Intel's internal manufacturing arm will have increased pressure to serve its designers in a more competitive manner. We've already seen this with Intel finally embracing EUV or extreme ultraviolet lithography. Gelsinger basically said that Intel didn't lean into EUV early on and that it created more complexity in its 10 nanometer process, which dominoed into seven nanometer and as you know the rest of the story and Intel's delays. But since mid last year, it's embraced the technology. Now as a point of reference, Samsung started applying EUV for its seven nanometer technology in 2018. And it began shipping in early 2020. So as you can see, it takes years to get this technology into volume production. The point is that Intel realizes it needs to be more competitive. And we suspect, it will give more freedom to designers to leverage outsource manufacturing. But Gelsinger clearly signaled that IDM is not going away. But the really big news is that Intel is setting up a new division with a separate PNL that's going to report directly to Pat. Essentially it's hanging out a shingle and saying, we're open for business to make your chips. Intel is building two new Fabs in Arizona and investing $20 billion as part of this initiative. Now well Intel has tried this before earlier last decade. Gelsinger says that this time we're serious and we're going to do it right. We'll come back to that. This organizational move while not a spin out or a joint venture, it's part of the recipe that we saw as necessary for Intel to be more competitive. Let's talk about why Intel is doing this. Look at lots has changed in the world of semiconductors. When you think about it back when Pat was at Intel in the '90s, Intel was the volume leader. It crushed the competition with x86. And the competition at the time was coming from risk chips. And when Apple changed the game with iPod and iPhone and iPad, the volume equation flipped to mobile. And that led to big changes in the industry. Specifically, the world started to separate design from manufacturing. We now see firms going from design to tape out in 12 months versus taking three years. A good example is Tesla and his deal with ARM and Samsung. And what's happened is Intel has gone from number one in Foundry in terms of clock speed, wafer density, volume, lowest cost, highest margin to falling behind. TSMC, Samsung and alternative processor competitors like NVIDIA. Volume is still the maker of kings in this business. That hasn't changed and it confers advantage in terms of cost, speed and efficiency. But ARM wafer volumes, we estimate are 10x those of x86. That's a big change since Pat left Intel more than a decade ago. There's also a major chip shortage today. But you know this time, it feels a little different than the typical semiconductor boom and bust cycles. Semiconductor consumption is entering a new era and new use cases emerging from automobiles to factories, to every imaginable device piece of equipment, infrastructure, silicon is everywhere. But the biggest threat of all is China. China wants to be self-sufficient in semiconductors by 2025. It's putting approximately $60 billion into new chip Fabs, and there's more to come. China wants to be the new economic leader of the world and semiconductors are critical to that goal. Now there are those poopoo the China threat. This recent article from Scott Foster lays out some really good information. But the one thing that caught our attention is a statement that China's semiconductor industry is nowhere near being a major competitor in the global market. Let alone an existential threat to the international order and the American way of life. I think Scotty is stuck in the engine room and can't see the forest of the trees, wake up. Sure. You can say China is way behind. Let's take an example. NAND. Today China is at about 64 3D layers whereas Micron they're at 172. By 2022 China's going to be at 128. Micron, it's going to be well over 200. So what's the big deal? We say talk to us in 2025 because we think China will be at parody. That's just one example. Now the type of thinking that says don't worry about China and semi's reminds me of the epic lecture series that Clay Christiansen gave as a visiting professor at Oxford University on the history of, and the economics of the steel industry. Now if you haven't watched this series, you should. Basically Christiansen took the audience through the dynamics of steel production. And he asked the question, "Who told the steel manufacturers that gross margin was the number one measure of profitability? Was it God?" he joked. His point was, when new entrance came into the market in the '70s, they were bottom feeders going after the low margin, low quality, easiest to make rebar sector. And the incumbents nearly pulled back and their mix shifted to higher margin products and their gross margins went up and life was good. Until they lost the next layer. And then the next, and then the next, until it was game over. Now, one of the things that got lost in Pat's big announcement on the 23rd of March was that Intel guided the street below consensus on revenue and earnings. But the stock went up the next day. Now when asked about gross margin in the Q&A segment of the announcement, yes, gross margin is a if not the key metric in semi's in terms of measuring profitability. When asked Intel CFO George Davis explained that with the uptick in PCs last year there was a product shift to the lower margin PC sector and that put pressure on gross margins. It was a product mix thing. And revenue because PC chips are less expensive than server chips was affected as were margins. Now we shared this chart in our last Intel update showing, spending momentum over time for Dell's laptop business from ETR. And you can see in the inset, the unit growth and the market data from IDC, yes, Dell's laptop business is growing, everybody's laptop business is growing. Thank you COVID. But you see the numbers from IDC, Gartner, et cetera. Now, as we pointed out last time, PC volumes had peaked in 2011 and that's when the long arm of rights law began to eat into Intel's dominance. Today ARM wafer production as we said is far greater than Intel's and well, you know the story. Here's the irony, the very bucket that conferred volume adventures to Intel PCs, yes, it had a slight uptick last year, which was great news for Dell. But according to Intel it pulled down its margins. The point is Intel is loving the high end of the market because it's higher margin and more profitable. I wonder what Clay Christensen would say to that. Now there's more to this story. Intel's CFO blame the supply constraints on Intel's revenue and profit pressures yet AMD's revenue and profits are booming. So RTSMCs. Only Intel can't seem to thrive when there's this massive chip shortage. Now let's get back to Pat's announcement. Intel is for sure, going forward investing $20 billion in two new US-based fabrication facilities. This chart shows Intel's investments in US R&D, US CapEx and the job growth that's created as a result, as well as R&D and CapEx investments in Ireland and Israel. Now we added the bar on the right hand side from a Wall Street journal article that compares TSMC CapEx in the dark green to that of Intel and the light green. You can see TSMC surpass the CapEx investment of Intel in 2015, and then Intel took the lead back again. And in 2017 was, hey it on in 2018. But last year TSMC took the lead, again. And appears to be widening that lead quite substantially. Leading us to our conclusion that this will not be enough. These moves by Intel will not be enough. They need to do more. And a big part of this announcement was partnerships and packaging. Okay. So here's where it gets interesting. Intel, as you may know was late to the party with SOC system on a chip. And it's going to use its packaging prowess to try and leap frog the competition. SOC bundles things like GPU, NPU, DSUs, accelerators caches on a single chip. So better use the real estate if you will. Now Intel wants to build system on package which will dis-aggregate memory from compute. Now remember today, memory is very poorly utilized. What Intel is going to do is to create a package with literally thousands of nodes comprising small processors, big processors, alternative processors, ARM processors, custom Silicon all sharing a pool of memory. This is a huge innovation and we'll come back to this in a moment. Now as part of the announcement, Intel trotted out some big name customers, prospects and even competitors that it wants to turn into prospects and customers. Amazon, Google, Satya Nadella gave a quick talk from Microsoft to Cisco. All those guys are designing their own chips as does Ericsson and look even Qualcomm is on the list, a competitor. Intel wants to earn the right to make chips for these firms. Now many on the list like Microsoft and Google they'd be happy to do so because they want more competition. And Qualcomm, well look if Intel can do a good job and be a strong second sourced, why not? Well, one reason is they compete aggressively with Intel but we don't like Intel so much but it's very possible. But the two most important partners on this slide are one IBM and two, the US government. Now many people were going to gloss over IBM in this announcement, but we think it's one of the most important pieces of the puzzle. Yes. IBM and semiconductors. IBM actually has some of the best semiconductor technology in the world. It's got great architecture and is two to three years ahead of Intel with POWER10. Yes, POWER. IBM is the world's leader in terms of dis-aggregating compute from memory with the ability to scale to thousands of nodes, sound familiar? IBM leads in power density, efficiency and it can put more stuff closer together. And it's looking now at a 20x increase in AI inference performance. We think Pat has been thinking about this for a while and he said, how can I leave leap frog system on chip. And we think he thought and said, I'll use our outstanding process manufacturing and I'll tap IBM as a partner for R&D and architectural chips to build the next generation of systems that are more flexible and performant than anything that's out there. Now look, this is super high end stuff. And guess who needs really high end massive supercomputing capabilities? Well, the US military. Pat said straight up, "We've talked to the government and we're honored to be competing for the government/military chips boundary." I mean, look Intel in my view was going to have to fall down into face not win this business. And by making the commitment to Foundry Services we think they will get a huge contract from the government, as large, perhaps as $10 billion or more to build a secure government Foundry and serve the military for decades to come. Now Pat was specifically asked in the Q&A section is this Foundry strategy that you're embarking on viable without the help of the US government? Kind of implying that it was a handout or a bailout. And Pat of course said all the right things. He said, "This is the right thing for Intel. Independent of the government, we haven't received any commitment or subsidies or anything like that from the US government." Okay, cool. But they have had conversations and I have no doubt, and Pat confirmed this, that those conversations were very, very positive that Intel should head in this direction. Well, we know what's happening here. The US government wants Intel to win. It needs Intel to win and its participation greatly increases the probability of success. But unfortunately, we still don't think it's enough for Intel to regain its number one position. Let's look at that in a little bit more detail. The headwinds for Intel are many. Look it can't just flick a switch and catch up on manufacturing leadership. It's going to take four years. And lots can change in that time. It tells market momentum as well as we pointed out earlier is headed in the wrong direction from a financial perspective. Moreover, where is the volume going to come from? It's going to take years for Intel to catch up for ARMS if it never can. And it's going to have to fight to win that business from its current competitors. Now I have no doubt. It will fight hard under Pat's excellent leadership. But the Foundry business is different. Consider this, Intel's annual CapEx expenditures, if you divide that by their yearly revenue it comes out to about 20% of revenue. TSMC spends 50% of its revenue each year on CapEx. This is a different animal, very service oriented. So look, we're not pounding the table saying Intel's worst days are over. We don't think they are. Now, there are some positives, I'm showing those in the right-hand side. Pat Gelsinger was born for this job. He proved that the other day, even though we already knew it. I have never seen him more excited and more clearheaded. And we agreed that the chip demand dynamic is going to have legs in this decade and beyond with Digital, Edge, AI and new use cases that are going to power that demand. And Intel is too strategic to fail. And the US government has huge incentives to make sure that it succeeds. But it's still not enough in our opinion because like the steel manufacturers Intel's real advantage today is increasingly in the high end high margin business. And without volume, China is going to win this battle. So we continue to believe that a new joint venture is going to emerge. Here's our prediction. We see a triumvirate emerging in a new joint venture that is led by Intel. It brings x86, that volume associated with that. It brings cash, manufacturing prowess, R&D. It brings global resources, so much more than we show in this chart. IBM as we laid out brings architecture, it's R&D, it's longstanding relationships. It's deal flow, it can funnel its business to the joint venture as can of course, parts of Intel. We see IBM getting a nice licensed deal from Intel and or the JV. And it has to get paid for its contribution and we think it'll also get a sweet deal and the manufacturing fees from this Intel Foundry. But it's still not enough to beat China. Intel needs volume. And that's where Samsung comes in. It has the volume with ARM, has the experience and a complete offering across products. We also think that South Korea is a more geographically appealing spot in the globe than Taiwan with its proximity to China. Not to mention that TSMC, it doesn't need Intel. It's already number one. Intel can get a better deal from number two, Samsung. And together these three we think, in this unique structure could give it a chance to become number one by the end of the decade or early in the 2030s. We think what's happening is our take, is that Intel is going to fight hard to win that government business, put itself in a stronger negotiating position and then cut a deal with some supplier. We think Samsung makes more sense than anybody else. Now finally, we want to leave you with some comments and some thoughts from the community. First, I want to thank David Foyer. His decade plus of work and knowledge of this industry along with this collaboration made this work possible. His fingerprints are all over this research in case you didn't notice. And next I want to share comments from two of my colleagues. The first is Serbjeet Johal. He sent this to me last night. He said, "We are not in our grandfather's compute era anymore. Compute is getting spread into every aspect of our economy and lives. The use of processors is getting more and more specialized and will intensify with the rise in edge computing, AI inference and new workloads." Yes, I totally agree with Sarbjeet. And that's the dynamic which Pat is betting and betting big. But the bottom line is summed up by my friend and former IDC mentor, Dave Moschella. He says, "This is all about China. History suggests that there are very few second acts, you know other than Microsoft and Apple. History also will say that the antitrust pressures that enabled AMD to thrive are the ones, the very ones that starved Intel's cash. Microsoft made the shift it's PC software cash cows proved impervious to competition. The irony is the same government that attacked Intel's monopoly now wants to be Intel's protector because of China. Perhaps it's a cautionary tale to those who want to break up big tech." Wow. What more can I add to that? Okay. That's it for now. Remember I publish each week on wikibon.com and siliconangle.com. These episodes are all available as podcasts. All you got to do is search for Braking Analysis podcasts and you can always connect with me on Twitter @dvellante or email me at david.vellante, siliconangle.com As always I appreciate the comments on LinkedIn and in clubhouse please follow me so that you're notified when we start a room and start riffing on these topics. And don't forget to check out etr.plus for all the survey data. This is Dave Vellante for theCUBE insights powered by ETR, be well, and we'll see you next time. (upbeat music)

>> Narrator: Live from Las Vegas, it's, theCube. Covering NAB 2017, brought to you by HGST. (upbeat techno music) >> Hey, welcome back everybody. Jeff Frick hear with, theCube. We're at NAB 2017 in Las Vegas, California. 100,000 people all talking about broadcast industry, media industry, and tech. Met is the theme because the technology is completely interwoven in with media and entertainment. And we're excited to have a great representative from the Hollywood Section Manager, Society Motion Picture and Television Engineers. That's a mouth full, Steve Wong. Steve, welcome. >> Welcome, or SMPTE, that's the easiest. >> SMPTE, I'll go with SMPTE, he's from SMPTE. Alright so you had an interesting talk earlier about blockchain. It's interesting, we've been here for three days and a lot of conversations of kind of, similarities with trends we're seeing at other shows that we cover with democratization of data, and access to the data, and abilities of cloud, and integrated security. But we haven't really talked about blockchain. But I think that's kind of funny, that now we're hearing the blockchain conversation come in too as we hear in many places. Where does blockchain fit? >> You know it's really interesting, because originally I had heard of a blockchain for folks in the financial industry. And that's where the real big push is. And a lot of VC's were talking about blockchain. So I started to look at blockchain and median entertainment, and I said, "You know could this fit? "You know what would be an interesting fit for this?" And when you look at making a movie or a television program, it's just a lot of transactions. And that's where blockchain is absolutely perfect. >> Right. >> You know blockchain is basically a general ledger entry. So when you think of you know, why is that important? You know, I looked back to the origination of content, you know, for moving images, and that's a feature film script or a television script. >> Jeff: Right, right. >> So imagine when you write that, the first thing you do is you go and you register it with the copyright office. So my thought is, that's your first chain in that link of ownership. And so the next thing you do, is you want to option that script off. So you're going to send out a document, your PDF to your agent, and he's going to send it out to a bunch of other agents. And then you'll have a track record of that next transaction, whoever received that. >> Jeff: Right, right. >> So as you go down through that production, you know I envision being able to tie it back to that original ownership for that script. Whoever options his script to go out into the production. To actually take that all the way down to the storage, to the camera, and be able to pull even all of that meta-data together. Link it to the ownership into that chain, all the way to the distribution to the actual viewer at the end of it. >> So, the greatest descriptive term I've heard of blockchain is trust as a service. >> Steve: Right. >> Which is really an interesting way to coin it. And what's interesting about this industry, is the transient nature of the way, you know, kind of groups of people and resources are assembled around a particular project, this script in which you described. They create this asset, and then they go, you know, poof, they go back from whence they came. >> That's the challenge, right? >> So it really begs, it begs for better trust solutions. >> So imagine you get a deal with a show, and they say, "You know what? "We're going to pay you rate, "but we're going to give you percentage of the back end." And you say, "Fantastic." And then you go on to your next project. How do you find that out? >> Jeff: Right, right. >> Right now it's really difficult to track that all the way back, residuals or whatever. This will be an easy way to basically see who's seen it, who gets paid, what you're owed, and everything else. >> Right. Now it's pretty crazy now you said before we turned on the cameras, that it's all very, very still old-school paper based at this point and time. >> That's the crazy thing about, you know, you look at other industries, you know, and I touch a lot of industries. And you think, wow, you know, we've got basic things. Such as when I start with an employer, I can go online and download all of my stuff, and I never touch paper. But even today in the television industry and the motion picture, you know, for 99% of it, it's all paper. So basically all my stuff I have to physically give them, and fill out, you know, documents at the end of the day. You know, a PA checks me in when I show up. A PA signs when I send out, on a piece of paper, they send it in a football back to the financial office at the show. And they do all these things manually. You know, it's coming to where they're doing digital onboarding. >> Right. >> But all this stuff is still paper. Because really it's like we've been making movies for the last hundred years. >> Right, and yet we're surrounded at this conference with hundreds of thousands of square feet of new technology, and new innovation, and computer based stuff, and IP based stuff, and crazy cameras, and 360 cameras, and 4K, and 8K, and HDTV. So clearly there's no holding back the technology edge. That there's three leverages, but then you got to check-in with the PA right? >> If you make billions of dollars the same way that you did a hundred years ago You know, who's going to be the guy that going to change that? Or a girl, right? That's the challenge, if it's, you know, not broke, don't fix it. >> That's why I love Clayton Christensen's book. It's still my all-time favorite book. Right, it hard to change when you've been making money, that same old way. So what are some of your other impressions of the show? You've been coming here for a number of years. The vibe's different I keep hearing. It's our first time, but I'm curious to get your kind of general impression. >> You know the interesting thing is, you know, again following the trends in other industries, you know, to move to a true digital IP workflow. So I'm seeing that really starting to materialize around here. You know, I think that the challenge is... You know, when I started off a hundred years ago on television I was a, you know, de facto MIS manager and director of research at ABC. And back in those days, in the 90s, you know, I connected our sales team to the internet. And then you could actually send emails to the buyers, and that was like a big, big jump. >> That was a bad day though, in hindsight. >> Yeah, so um. >> (laughing) Too much email ack. >> So you see folks that, you know, understand video and BNC cables, and things like that. >> Right, right. You have another group that understand ethernet, you know, NIP. And they have always been in two different worlds. You know, at every TV station, you have your IT guy that would never touch the broadcast equipment, he was forbidden there. >> Jeff: Right, right. >> You know, a long time ago. But now you see that merger. You know, where you really have, you know, a manager or VP that understands video and understands IP, and says, "You know there's a better way to do that." And it's secure now a days, and you know, if you take the right precautions. So that's the trend that I've seen change around here. Because the cameras are all digital, right? >> Right, right. >> Everything is digital along that path, why would you have to go back to video? >> Jeff: Right. >> You know, we have things like Periscope. We can do live video to millions of people. >> Jeff: Right. >> So the technology's clearly here. >> It's just so amazing, you know again, the themes are consistent wherever we go. This just democratization of access, and ability. That I can go sit in the front row of a Dodger, Giant's game, and you know, hold up my Periscope and pretend that I'm Vin Scully, you know, for a minute. Which clearly I'm not. And people probably are not going to watch me like they love Vin Scully. But it's so interesting that at the low-end, you know, there's so many tools available for people, for creators, that they just have access that they didn't have before. At the high-end, I mean, the amount of stuff in this conference room. Again with the 360, and VR, and the IR, and the 4K, and the 8K. You know, it's fascinating. But I sometimes wonder is it too much? Are we still managing, you know, the story telling? And is it-- >> And that's what it comes down to. You have to tell a story, that's the most important thing. >> It's so competitive for the audience, right? Because the alternate is just a quick swipe away, you know. So it seems like the pressure to perform, and to get your ROI's, especially on these bigger projects, has got to be higher than it's ever been. >> Alright, this is an interesting thing, because what we've seen in Hollywood is an increase in production. You know, it used to be you'd wait, you know, for a TV season, and they'd pitch the shows to the advertising agencies in New York. But now with the increase of Netflix and Amazon, there's always a season. >> Jeff: Right, right. 'Cause they're always buying things. You know, whatever YouTube channels. You see YouTube stars that are making money, and that's a valuable audience now. Where people are saying, "I'll just watch YouTube tonight "and see what's going on there, "from the people I like to follow." >> Jeff: Right. >> So that drives production, you know, goals and costs down because you can't do a hundred million dollar YouTube production, or you can I guess, right? But you probably won't make any money with it. >> (laughing) I'm sure they are. But the other thing is just strikes me, just is the compression around, for feature movies, around the opening weekend. 'Cause there's only 52 weekends a year. >> Steve: Right. >> And, you know, some of those are probably not so great from a marketing point of view. And this just compression to make that number. Because the next weekend, or two weekends from now it's another movie, or it's another movie, or it's another movie. And so it's seems just crazy. On the other hand, the long-tail opportunities with VOD, and multi-forms of distribution, multi-language, multi-format, multi-channel are bigger than they've ever been before. So it's this interesting dichotomy in terms of the way the market's evolving. >> The interesting thing, because of that pressure, we see huge growth in analytics. You know, there was a great article from, About Netflix, talking about the genres. You know, in Hollywood we've got like 13 genres or something like that. But Netflix has like 73 genres. >> Jeff: Right. >> So they've broken down their audience 'cause they have the device. You know, they know exactly what they're watching. So they use those analytics to their benefits when they buy. You know, the studios are at a disadvantage, unless they have the same things. >> Right. >> So you see guys like Legendary investing in analytics teams and, you know, all these other folks out there that are investing in these analytics teams to make that, you know, smarter investment for those movies. >> Right, it is interesting is, again, as it gets consistent, right? Is that now, if you can track to the consumption of the material, you're not just shipping the product anymore. And it's going to a theater, and hopefully people are watching it or not watching it. But now if they're watching it on their phone, you know, where they're watching, who's watching it, you know what time, how often, how deep they go-- >> Well now that's the key. >> Jeff: It's pretty interesting. >> If you have that application, and you have the ability, you know, like Netflix does that's awesome. >> Jeff: Right, right. >> But remember most of the studios and networks, they're creating it and licensing it off. So they may not get that information. But that's where you see the other trend, where folks like HBO, they create the content, but they also want to have that application device so they can get that information. So I think that's another trend you'll start seeing. >> So will the ones that are still independent that don't have the channel, you know, start to get back as part of their channel deal, some of that data? >> It's challenging, right? Because cable companies typically don't want to release that data. You know, a secondary OTT app may not want to release that data. So it really forces a creator to own that distribution chain, so they can get that valuable data, so. >> Interesting time. Somebody said earlier, I think in the week, that Netflix, I think, is now the largest producer. I don't know what genre of category, but they're like one of the largest studios now of all. Which is pretty fascinating, when they were simply, you know, DVD rental service not that long ago for people that remember what a DVD was. >> Steve: Right. Having difficulty getting contracts with studios. >> Jeff: Right, exactly. >> But-- >> So make your own I guess, that's the ticket. >> Steve: There you go. >> Alright, Steve, so I'll give you the last word. As you look forward to 2017, if we meet again here next year-- >> Steve: Yes. >> What do you think the topics going to be? >> Again, I think what you're going to see is more folks moving to a public cloud, trusting that, and really working with it, using analytics. And the most important thing, that we touched on, is managing that security. Making sure they don't get hacked, so. >> Alright, Steve. Well, Steve from SMPTE. That was the shorter way. >> There you go. >> Steve Wong, I'm Jeff Frick. Thanks for stopping by. >> Steve: Thanks so much. >> Alright, you're watching, theCube, from NAB 2017. We'll be right back after this short break. (upbeat techno music)

(light techno music) >> Hello and welcome to our special Mobile World Congress '1, #MWC17. I'm John Furrier inside theCUBE Studio breaking down all the analysis we're going to be covering at Mobile World Congress. We kind of know some news is coming out, that's Monday and Tuesday all day coverage. We're here with @rUvreuv, Reuv Cohen, an entrepreneur I've known for years. Going back to when we first met in the cloud days back in '08 timeframe, '09, when dev ops was really the beginning of the movement. You've been an entrepreneur, you've sold multiple companies, multi-time successful entrepreneur. But you've been deep in the cloud game. Welcome to theCUBE special coverage of Mobile World Congress. >> Thanks for inviting me, I'm happy to be here. >> The other thing, too, is we just tried to get the Periscope thing working so we have our little Periscopes going here. But this is really the media landscape that's going to be one of the themes at Mobile World Congress that certainly will be front and center. These service providers have to have a business model. And media entertainment has been on their to-do list. Just a lot of the plumbing hasn't gotten done. And the new trend that's going to be really front and center is AI. We were joking about that. But seriously, you're doing a lot of discussions around AI. And then Intel's 5G now, which they pre-announced this week, prior to Mobile World Congress with 5G. Their positioning is a step-up game changer. So you got 5G overlay network, you have real plumbing that's getting done with NFV, Network Functions Virtualization. You have the app market exploding. Will the service providers ever make it? Will the telco's actually figure out a business model? >> Well, you know, they're always the pipes, and you're always going to need pipes. There's an endless amount of opportunities for those people figuring out what to do with those pipes. I don't know, this is the question we've been asked for 20 years. Do they want to be more than dumb pipes, right? >> Well, they've yet to find a business model. I mean, I think one of the things, I was looking at the Intel announcement, was, is 5G a technology looking for a problem, or does it really actually create a step-up function in terms of capability. I mean 4G is just an evolution of 3G, LTE is getting some speeds there. But, I mean, my family hits their caps on all the data we're doing. People are hitting their data caps, we need more data. So the question is, is that going to be ready for prime time? Your thoughts on? >> Well, there's almost like a Moore's law of data, right. The more data you have available to use, the more things you can do with it. You know, Periscope's a prime example. Now they're doing a whole variety of different video-related things, Facebook lives, there's a YouTube lives, everyone wants to do live. And all that requires massive amounts of data, especially if you want to do high definition related things. We were actually trying to set up a Periscope before the broadcast this morning. And one of the first things that became apparent was we had to limit our bit rate to 800 kilobits, which is relatively small when you think about it. >> Yeah, that's the bandwidth issues. I mean, at the end of the day it comes down to the last miles, we always say. But let's get into some of the analysis of Mobile World Congress and let's get down under the hood. Is could truly ready for prime time? And when I say cloud, I mean, obviously, full-stack infrastructure because network virtualization has been one of those kind of shifting sands, if you will. NFV has been one of those things that's been kind of evolving. OpenStack is seen to be much more of a telco use case at some of the OpenStack summits we've covered. Your thoughts on the progress of cloud-ready telcos? >> You know it comes down to, if you're going to build an application, whether you're an enterprise, whether you're an individual developer or something in between, you're probably not going to build it in your own data center. Whether that's a closet in the back of your office, or your own... You're probably going to go and build something that's quick and fast and efficient. And that really is starting to look like things that are server-less, things that are event-driven and that isn't really sitting in your own data center anymore. >> So what's your take on the ecosystem? Do you think that the ecosystem play for the Mobile World Congress is going to shift at all? I mean, I was commenting to Dave Vellante just last week and Jeff Frick, here on theCUBE team that CES, which we don't go to anymore because it's gotten too big. But this year we did cover it here in the studio like we're doing with Mobile World Congress. It just seems that CES is no longer a consumer electronics show, it's more of a car show. Autonomous vehicles are, obviously, front and center, that's the glam, that's the eye candy. Mobile World Congress doesn't seem to be a device show anymore, or it's shifting away. Last year Mark Zuckerberg gave the keynote speech, and you saw that shift. What's Mobile World Congress turning into, in your opinion? >> It's an app show. So, where CES still sort of has this focus on the actual physical things that you can touch and build. The mobile apps of the world are now the things that dominate mobility. Is a phone interesting? Not really. (John laughs) What you do on your phone is definitely interesting. >> It's interesting to look at also, and talking to folks about, Mobile World Congress is one of those shows, it's a biz dev show, too. A lot of people who fly over to Barcelona don't really go for the pure content. There's more business deals going on. All the top executives of the big technology companies go there. Your thoughts on landscape of the vendors out there that are suppliers to this new consumerized market. You see deals happening that you think would be interesting? Where do you see the formation of the industry lining up? Obviously, some things have to get done at a technical level. 5G's great, great hope for that. But some companies are trying to transform look at Cisco, companies like Cisco, companies like Hewlett-Packard Enterprise, VM Ware, AWS, Google, Intel, Qualcomm. I mean there seems to be a feeling of posturing and a reef-set, if you will. >> 2017, so far, is shaping up to be the year of Snapchat, if you ask me. With a pending IPO they're saying that their revenues are going to be increasing 5x. It looks like everything we've been talking about, the app-based world, is sort of culminating in this Snapchat thing. So the question is, is Snapchat going to live up to all the hype that's surrounding them as this sort of, next generation of you know, the next Facebook, the next Google, the next whatever. >> Well it's interesting, Snapchat brings up the conversation of, the people who have their head in the sand versus people who are riding this wave. Facebook was totally pooh-pooh'ed during the IPO. I remember leading up to the IPO, it was like, oh my God, there's no way they can do it. They can never be the next Google, that was kind of the comparison. Google was compared to Microsoft, and then Facebook was compared to Google. And then everyone was like, no frickin' way that's going to happen. Why would anyone want to seed that company? It's a social net for college kids, and now some adults are coming on. And then look what happened, so the world changed. Snapchat's the same way, so it's interesting, it's not what you think. The core competency shifts and the user consumption becomes democratized. So the question is, what does Snapchat mean for telcos? Does that mean that they're just pipes? What do they do? How do they get in front of this? You got Netflix, you got Amazon out there with, now, the video stuff. >> People want content and they want it fast, they want it in high quality and they want it on the go. So, yeah it is the question. I think that the challenge that a lot of these telco's are having is the fact that they still have a bit of a monopoly in many parts of the world and they use that monopoly to inflict quite a bit of pain. So it's, I don't think that's something that they're going to be able to get away with very much longer. >> So what's your take on AI? Since you've been doing a lot of AI. And obviously, AI's been around. In the 80's when I got my CS degree, LISP was out there, neural networks, object-oriented programming was hitting the scene. You know, you had this kind of mind-set, and it was still, AI was this elusive academic mental model and some coding. Now it's all the rage, when you look at autonomous vehicles and you look at IOT, drones, a new landscape is here, connected consumer. Your thoughts on where AI, is it, right now, certainly it's hyped, we all agree on that. >> There's been several iterations of AI over the last 40 years. Every time technology appears you hear about AI. In the 70's you saw things like Space Odyssey and there was this rush to AI-related activities around the first generation of computing. Then that sort of, we realized it wasn't really possible and it disappeared for 25 years. Then it reemerged in your early days of internet, oh, it was still too early. (John laughs) So now 15, 20 years later, again, we are in this, another dawn of AI. But there is some critical differences. Now there are tooling that allows you to do the sorts of things that we had only dreamt of before, whether it's natural language processing, generation of information and other various forms of analytics. So all these things are culminating in these opportunities that were really never possible until now, including things like cloud computing. >> Machine learning certainly is the center of that. I love the machine learning rates. But machine learning's been around for a long time as well. I mean machine learning isn't necessarily new, it's mostly software that has to do with algorithms. But now you have data to compute. This is the new thing, right? Data's available and you got tons to compute. >> Yeah, it was hard >> Yeah. >> It was really, really hard. And anyone that's actually tried to go out and do a machine learning system, neural net, realized quite quickly that you had to be a phD to figure out how to use these tools. So now all these tools are being put together into platforms and end-user applications. So no longer do I have to go and try to put together a Lego, you know, erector set of stuff. I can go, I can get mostly everything I need to solve a problem and I can be off to the races quite quickly. >> So what's your up work you're doing now, Reuv? You've been an entrepreneur, give us the latest update on what's in your world right now. You were, obviously, instrumental in a lot of cloud ventures and, obviously, you've been in the industry, certainly as an influencer as well, you've got the little blue check on Twitter, which I don't have yet. Twitter rejected me twice, I got to get to the... Stu has it, Stu Miniman on our team. In all seriousness, this is a new world and you're on the front lines both as a media producer, you've got a great podcast, but also you're in the industry. Where is cloud going and where's that top of the stack action because that really is, you mentioned apps, that's where the action is right now. What do you see happening and what are you up to these days? >> Well, you know, a couple areas. One of the things they don't tell you is, after you sell your business, you lose a little bit of your purpose. (laughs) Personal problem, for sure, but. >> You make some good cash. >> Yeah, exactly. Put it in the bank there, bank some cash. >> Yeah, so after Anomaly and Virtual Stream exited there was this period where I get to do things that I want to do. And investing in other start ups was, you know, the thing that apparently, you do. I focused heavily on AI-related companies. Actually I just recently did an investment in a company called Zoom.AI, which is really doing some cool stuff around enterprise-focused AI work. Also, I've got a day job as well outside that. I recently joined a company here in San Jose that focuses on security for containerized environments. So, sort of policy-based security, very low level stuff. >> At the orchestration layer, or at the docker layer or where would you...? >> It's at, it's even lower than that. It essentially orchestrates the policy around things like system calls and networking itself. So, rather than having to focus on the complexities of all the various parts of an environment, what we do is we basically say, hey, look at the tags that exist and things like Kubernetes. And then those tags define the policies in which things can communicate with one another. Let's say it's a layer three network, or what has read or write access to the system calls themselves. >> Is that a new company for you, that you guys launched? >> Well, we're in the process of launching. >> So stealth? >> It's stealthy, I'm telling you about it right now. (both laugh) >> What's the name? >> Appareto. >> Appareto, so there it is. We're launching on theCUBE here, on Periscope, pre-recorded for our Mobile World Congress special coverage. Alright so this is, basically, this is the cloud native goes to full scale cloud, for apps. >> Exactly, so containers, we've come full circle. Anyone that's been around for a while knows containers is certainly not a new trend. Solaris, you know, 25 years ago doing containers. The implementation of it around micro-services and the tooling around dev ops and docker and other various Kubernetes-types deployments have made it much more readily attainable, in terms of using it within an enterprise or a run of the mill application. >> We were talking with a lot of folks leading up to Mobile World Congress prep for our special coverage and micro-services comes up heavily, and micro-services as an integration layer. And one of the things that we're seeing, I want to get your thoughts on this, is you see IBM just announced this week here in San Francisco at their IBM Connect event, oh, it's our Lotus Domino and Verved, which is their collaborative software. But the key to all this collaborative software, even to the Oracle's of the world and to Amazon, is integration with third party apps. And micro-services and containers become a critical component of that. So, for entrepreneurs and/or app developers, a new kind of third party developer is emerging and they need to integrate. What is the role micro-services play in all of this? This is a really key point, because this will point right at the telcos. Because whoever can embrace an ecosystem of app developers from an integrations standpoint will win, in my opinion. Your thoughts, do you see it in the same way? And how does micro-services and all this stuff play into that? >> Well, there's two... >> It's the glue layer? >> Yeah, it's the glue. Lego is, again, is kind of the thing that pops in my mind. There are these two, sort of, battling schools of thought. One is micro-services which allows you to easily plug and play these various components. The other is server-less, these things that are very event-driven, they're transient. They allow you to, again, act as a kind of glue that puts everything together. One's based on, predominantly, the idea of containers which is kind of a lightweight OS. And the other is basically saying, I don't need an OS. All I need is the functions that I need, when I need them, and I put them together and I'm off to the races. I think that most applications aren't ready for a whole choice of just doing one or the other, it's kind of a combination. So the exciting thing now, is you can do what used to take weeks or months, in a matter of days with these types of technologies. >> So your final thought on Mobile World Congress. What do you expect to see in the hype cycle noise and where's the signal? Where do you see this event happening, what's your thoughts? >> I think we're going to see a lot more in the focus of things like media and convergence. I think video-related activities is certainly going to remain to be hot. I think the tooling around enabling that type of high definition video focus is going to be a priority for a lot of these companies and the tooling around that will be a priority. >> We're here with Reuv breaking down the Mobile World Congress analysis and preview and all of what's happening in the news. Obviously, Intel, with the 5G, big announcement. I think they raised the curtain early. Obviously, they're competing with Qualcomm which has a different licensing agreement than Intel. Which is, you know, you see Apple as a big customer of Qualcomm and Intel. Interesting because as the price of the hardware goes down the chip guys want more cash, Qualcomm wants more cash than Intel. Very interesting dynamic, I think this ecosystem is going to be something that's going to watch. I think there's going to be a battle. I'm predicting that at Mobile World Congress we'll see a battle of the ecosystem. You're going to see whoever can make the market and shift the game, will be the winner. Reuv, thanks for spending the time, appreciate it. This is SiliconANGLE broadcasting here in Palo Alto for Mobile World Congress '17, special coverage. Thanks for watching. (light techno music)