>> Announcer: Live from Silicon Valley,
it's theCube,
covering Mobile World Congress 2017,
brought to you by Intel.
>> Okay, welcome back, everyone.
Here, live, in Palo Alto, California,
the Silicon Angle Studio for the Silicon Valley coverage
of Mobile World Congress 2017.
I'm John Furrier.
We're in theCube.
We're here with Cube alumni and one of our favorite guests,
Alan Cohen, the Chief Commercial Officer of Illumio,
hot security startup,
coming in to share his commentary on Mobile World Congress.
Alan's a veteran in the industry.
Great to have you.
Been in the Silicon Valley Friday Show a few weeks ago.
Great to see you.
>> Thrilled to be back.
Beautiful environment.
You know, party.
>> It was great to see you on the Silicon Valley Friday Show
because after our segment the New York Times
ran that story Friedman had that the cross where
they took our content.
>> We're going to Freeport next.
>> Exactly. (laughing)
And great content, we're serving it up.
So I want to say thank you, it was great coverage.
Thanks to the New York Times for picking up our content,
taking it to the next level.
Always great to have a conversation.
You've got a good way to put the finger on the pulse.
Mobile World Congress, two days of coverage for us.
I'll just give you a quick Reader's Digest summary
of what we're seeing.
It's a bipolar show.
It's a device show and a telco
trying-to-figure-things-out show.
Then in the middle is a lot of money to be had
by whoever can help sort out the counseling
of the telco business.
Intel certainly is a big player in that with 5G.
And there's a lot of under the covers stuff.
SDN, NFV, new networks and new paradigms
of how to configure these architectures.
Not much mention of security, but that's essentially
what's going on.
You've got everyone's working out the devices,
the new LG, the Yahweh, all this stuff's going on.
Then you get the telcos well speeds and feeds
and build out and business models.
So what's your assessment?
>> I've been to the Mobile World Congress 10 times.
We never talked about this, but I actually worked
the cellular carrier in the 90s.
To me the show is the same every year.
It's drones, clones, and phones.
That's what people really focus on, right?
So the 11,000 versions of the Android phone,
even though Apple's still taking 89% of the profit
at the industry so it actually only one phone
you have to pay attention to on one side.
Then more bits, less money side of being on the carrier,
because what is being an ISP, wireless ISP
or a wired ISP.
Every year I give you more bits and I make less money.
I'm going to make it up in volume.
And I keep pouring all this capital into this.
So to me, they haven't really yet completely
broken out of that paradigm.
The key thing is that the mobile network
is the primary network.
So all the profitability in telco is in the mobile network.
Nobody says hey, I'm going to get up and build
a wired network and pull some more copper
to your house, right?
So that is the principle way that people are using it
and we have now an entire generation that don't know
you can actually plug a phone into a wall
or an ethernet connection.
I think that's the kind of competitive dynamics
that people go with.
>> And that's under pressure though, because now
the carrier's always in the operating,
always controlled the relationship to the user
via the contract.
Did you buy an iPhone lately?
There's no more relationship.
You just buy whatever device you want.
The subsidy ended ...
I'm not talking about subsidy.
I'm talking about like I have a contract with AT and T,
I can certainly change it to Verizon,
so I can certainly swap.
But for the most part the carrier views me
as a subscriber.
Pretty much that's it.
They bill me, I'm not really getting anything extra
from AT and T.
Maybe I'll get some hotspots.
But I mean come on, what value?
>> You are just our poo.
>> Where does it go from here?
We had the guys from Datatron
on who had an interesting proposition.
They had a ton of data.
So there really has been this struggle institutionally,
as you know, I mean core competency has been
provisioning, truck roll, and billing.
So what else can they do?
What's your thoughts, okay let's change the mental,
here's the exercise.
We get elected to be the CEO of the biggest telco.
>> You're Verizon, I'm A T and T.
>> We own the telcos, and what do we do?
Do we fire everybody?
Do we do what Donald Trump does and just fire everyone
and run it the way we want to run it?
Or do we build it?
What would we do seriously, what would we do
if we were telcos and we want to put
our business hat on?
>> I think you have to kind of deconstruct
the value chain of that.
So what telcos do is they offer up content,
for the most part.
These devices, I've had to teach my kids
that you can make a call with it.
But aside from a call mostly what people do
is use some form of internet application.
They don't get any other money for the internet application.
They don't get any money for hosting it,
they don't get any money for managing it.
They don't get very much money for making it perform.
So to me, the biggest challenge of the telcos
is actually Amazon because if you think about it,
Amazon is now becoming the supply chain
for so much internet delivery content.
If the telco wants to be something other than
the last mile and the wires connecting that last mile,
it takes a lot of wires to build a wireless network,
people forget that.
They're going to have to start to figure out
can I, whether it's cash and data center,
can I turn profitable services to the people who are
all competing at the edge of that universe
and applications.
I don't think they really have done that.
I mean they are some of the largest data center operators
in the world, but they haven't really thought it through.
I was in a studio in L.A. a couple weeks ago
and it's one of the large national studios.
It's an Illumio customer and they've now moved
all their content distribution into Amazon.
So they don't send the content from their network
to the affiliates.
They put it in Amazon, and Amazon delivers it.
How much longer is it going to before there's
actually studio that works out of Amazon?
>> Yeah, I mean the head end's dead.
This cable is kind of changing.
That's the media piece, but also you have all
these new use cases, the fantasy autonomous driving cars
which you can say it's a data center on wheels,
yes I could buy that.
Is it going to be uploading data every half mile?
Where's the wire?
So you have this new construction.
Smart cities is another one,
smart homes is an echo in there.
>> I made my living out of making data centers more secure.
But the data center is going to completely evolve.
The share perfusion of data that's going to come
out of these devices, and a lot of people have talked
about the edge architecture, is going to blow up
the idea of back hauling it to a centralized server.
Process it in a bunch of ways and spit it back out.
For me, if I wanted to write a smart or autonomous
car management system, let's say I was the city
of Palo Alto and I'm responsible for now
instead of just the traffic lights,
I'm also responsible for how autonomous cars
go through Palo Alto, I'm not sending something back
to some data center in Virginia for Amazon.
I'm going to have to figure out how to process
all that data closest to where those cars are.
Make intelligent decisions about them while at local,
and then send back out instructions.
What I think you're going to do is you're going to see
a shift from this central model to a much more
distributed model and I'm going to have to have
mini data centers.
So instead of having 10 mega data centers
I might have 1,000 mini mega data centers
that's going to make all of these things happen.
I don't think a lot of people have paid attention
to that architectural shift.
If you're in the process of,
business of selling server networks you're still thinking
client-server back haul it into the giant data center
next to the nuclear power plant.
But it's all going to have to move a lot closer
to where something, because I only care about that decision
right now with the 50 cars coming down middle field
and the streets that feed into it.
>> But there's a bigger architecture thing
that the Mobile World Congress is trying to point at,
which is an ecosystem.
Let me take a step back.
Is Mobile Congress a relevant show,
or is it becoming a CES sideshow, Biz Dev show?
I mean Cy Gerli was on yesterday saying look,
it's where everyone goes, who's who goes there.
It's essentially a Biz Dev show that happens to have
a trade show running with it.
>> It's the agora, right?
The Greek term for marketplace.
You go there to do business with people.
It's like RSA two weeks ago, right?
You guys were up at RSA.
It's like is it really fun to walk through
14,000 vendor booths, or is it like everybody
who make decisions on buying and selling security stuff
happened to be in the same two-square miles
of San Francisco.
I don't think that part goes away,
but I do think ...
>> It's a super important part.
>> Yeah, but I think the architecture of who plays
is going to change.
The the question you've got to ask is who's going
to be the Amazon of the mobile world
and disrupt the network model?
The network is now just something glued together
with software.
I mean years ago they had the same thing,
it didn't really work out, that they called the cloud
where I would rent my access point in London
to people and I'd use their wifi.
The stuff that glues it together is always
much more important than the infrastructure itself.
So if Mobile World Congress can be important
there's going to be a track on the people
actually glue all of that stuff all together.
>> All right, so I've got to get your take
on the business conversation,
the marketplace that runs there.
What are some of the conversations that you could imagine
that was happening at Mobile World Congress?
I know we're not there, I mean we've been seeing
and hearing some of the hallway conversations.
Obviously 5G's the big story.
What are some of the marketplace hallway conversations
or business meetings that are going on in your mind's eye
if you had to make a guess on what's happening?
>> What are the most important content that people
like to use today?
Pop quiz, do you know this?
>> Yeah, video.
>> Video, right?
So to me, one of the conversation Netflix was having
and Amazon Prime was having because they're not just waiting
for you to be in your TV, to consume, right?
People are consuming increasing amounts
of video content on mobile devices.
So I think there's the Hollywood influence
or the studio or what is it?
The National Association of Programming Executives,
NAPE right?
What you're doing, if you're a content producer
you're looking for eyeballs and people to pay for it.
There's nothing more ubiquitous than that piece of glass
we're all carrying in front of our nose
17 hours a day.
I think that's a big set of business discussions.
Your partner was talking about this, is okay,
is there just a dramatically different way to build
this network?
5G is going to give you the promise, more is a lot of work.
The physics are I'm getting a lot more bandwidth.
What am I going to do with it?
Well people are going to fill it up.
>> There's different use cases.
There's the mobility and then with dense areas.
Then things that are moving at a hundred miles an hour,
50 miles and hour, planes, trains.
>> I think there's an element of that.
I think there's the internet of things discussion.
I still think five years will take the internet
whatever things, right?
I call the IOWT, right, because it's like nobody's,
it's not really about connecting your lightbulb
to the network, but there are a lot of things in motion
that people want to better manage.
>> We just introduced a research agenda this morning
with Peter Burroughs, IOT, IOT people.
Things and people.
>> Have you gone back to the Furrier family
and counted up how many IP addresses you have
as a family?
The Cohen family has 111 IP addresses.
>> John: IPV6 for you. (laughing)
>> Yeah, we need a gateway man for the network router
that comes into the house.
But that is actually ...
>> We just bought the new Google access points,
the ones that have that little mesh instrument.
>> But yes, I'm just kidding you.
So there are a lot of things.
The other thing is that there is the interaction
of the mobile, actually I think Google is a great example.
If you think about Google produces the wifi
at Starbucks and a lot of retail.
They're interested in what's going on.
Today we think about the mobile network as a mobile network
and we think about the broadband fixed network
as a different network.
And like the interplay between those two,
it's like there's a lot more than Foursquare and Facebook.
>> Sure fibers of the home is very capital intensive.
We knew it would cost us to do a truck roll, the trench,
and connect to the home which we did.
Overlay wireless, fixed wireless would be fantastic there.
>> So you have the overlay and then when I know
that you're coming by, right, because the fixed network
is now actually a wifi network, I mean it has wires.
So you have the mobile network, you have the wifi network,
and you have people moving in and out of those environments.
I think I'm seeing a lot of companies getting funded.
People actually trying to say how do we monetize
that experience?
This is obviously was Foursquare and those other
location guys started years ago.
I mean, look at something like Wayce.
Wayce went from a GPS app with social interaction
to a car sharing, ride sharing going after Uber,
this Google company.
>> Well we had an NTD Delcomo VC, Chris McCoo,
talk about mapping as a huge app for these telcos.
>> Mapping is the killer app.
Almost everything on your phone local works
off a map which, by the way, is paid for by us as taxpayers.
The GPS comes from the United States government.
It's free.
The most powerful utility in mobility is location,
and GPS is free.
>> All right, final question.
Bumper sticker from Mobile World Congress
from your perspective this year.
Yawner, golf clap, or standing ovation?
>> I say golf clap because more bandwidth is good
and I think there's an insatiable demand.
We're a long way from ending the bandwidth drought,
and there is a bandwidth drought.
I think the other thing is there aren't camps anymore.
I think people will coalesce very quickly on 5G.
So good time to be in that business.
One hand clap maybe.
>> Yeah, not a hole in one.
Certainly more golf analogies coming on theCube.
Alan Cohen here, Chief Commercial Officer, Illumio.
We didn't get to security, but we'll do that next time.
I'm John Furrier, I'll be right back with more
Mobile World Congress coverage after this short break.
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