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>> Okay welcome back, we are live here in Moscone North
VMworld 2019 Cube live coverage.
I'm John Furrier with Dave Alante,
Shekar Ayyar who's here, EVP general manager
Telco and Edge of Cloud for VWware.
Thanks for coming out,
I appreciate the time. >> Thank you,
thanks for having me.
>> I know you are super busy, we don't have a lot of time,
I'll get right to it.
5G, big part of the keynote discussion.
That's going to enable a whole bunch of stuff.
Pat called the pre-game show,
pre-game, not even an inning yet.
So we are going to talk about that.
Also Telco and the Edge computing, big part.
Michael Dell said, "Edge is the future".
These are two emerging areas for you guys.
What's the positioning, what's the update?
>> No absolutely.
I mean if you look at telecom infrastructure
for the longest time, telcos have played a role
just as pure basic connectivity providers.
And with 5G coming on board,
they finally have an opportunity to break out of that
and redefine the cloud of the future.
So for us, the big opportunity around 5G is not just
the better provisioning of like higher bandwidth services
to consumer for voice and data,
but a whole set of new enterprise services
that can be provided on top of this 5G network.
And in order to be able to do that,
you really need to go in with
a virtualized telco cloud architecture underneath that.
And so we are working with carriers globally now,
preparing them for 5G with an architecture
that's going to help them deploy new services faster,
for both their consumer as well as enterprise customers.
>> Might be the white knight, so to speak
for these telcos because they've been
struggling for years over the top,
and any kind of differentiated services,
even in the network layer. >> Exactly.
>> They've had tons of rack and stack machines,
so they are well stacked up in terms of computer storage.
Also connectivity to the Edge that's the back hall,
so you have back hall which is connectivity,
companies that have massive expertise in scale,
but fumbling in operational cloud natives.
>> But not just that,
but I also think that having the idea
of an application platform that allows them to go
and deploy services faster,
and then decide whether the are just going to play at
the network connectivity level or at the application tier
or a full SAS tier.
These are all options that are open to them now,
with this notion of telco 5G coupled with an NFV
and telco cloud infrastructure underneath that.
And never before, have they had this option to doing that,
and this is now open to them with this 5G last time.
>> Yeah, the cloud native is their green field for apps
support or having applications on top of it.
>> Exactly >> Icing on the cake, right?
>> Exactly, and so they are all looking at core architectures
and then potentially they are radio architectures
now all being opened up to deploying new services
that are much faster to provision,
and then extending that to Edge and to the enterprise.
>> And 5G is deploying, so we know it's out there.
So it is pre-game as Pat Gelsinger said.
You know not even in the inning yet,
in the metaphor of baseball innings.
I got to ask you about >> Dave: I got it on my phone.
>> But no, that's fake, >> I know!
That's what I'm saying.
>> They did that with 4G too.
>> I'm a skeptic.
>> The E stands for evolution, which means it's coming soon.
That's vaporware for telco language.
The surface area,
>> Yeah.
>> is going to radically get bigger with this capability.
Security is got to be baked in,
this is the number one concern for IOT
and more importantly industrial IOT,
we've been reporting on slokenagle.com.
This is a national security issue,
because we're under cyber attacks.
Towns getting locked out with ransomware,
critical infrastructure exposed.
We are a free country, we want to be free,
we don't need to lock down.
So you got to have security built into this
new promiscuous landscape that is called the IOT Edge
because you want to have no perimeter,
you want the benefits of cloud but
one hole, malware's in there,
one take over of a physical device could cost lives.
There's a big concern.
What's your thoughts?
>> Yeah, so I think there are two ways of looking at it.
One is the way you looked at it
in terms of the security perimeter expanding
and then us making sure that we have the right level
of infrastructure security baked in to enable this
to be an easier, manageable security architecture.
This is sort of the pitch you heard from VMware,
even in the context of our acquisition of Carbon Black
and how we're thinking about baking security
into the infrastructure.
The other way of looking at this is,
if you think about some of the concerns around providers
of telecom infrastructure today and how there might be
or might not be security back doors.
This is happening into today's hardware infrastructure.
So in fact I would argue
that a software defined architecture
actually ends up providing you greater levels of security
because what you now have is the option
of running all of these network functions
as secured as a software workloads,
in a policy envelope that you can introspect
and then you can decide what kind of security you want
to deploy on what kind of workload.
>> That's an innovative approach, but it doesn't change much
really, from an infrastructure standpoint does it?
Or does it?
>> No it does, because now instead of having a hardware box
where you have to worry.
I mean if it's closed hardware box
and you don't quite know what is happening there.
The question is, is that more secure than a infrastructure
where you are running the software
that you can actually introspect?
I would argue that the software defined approach,
is more secure than having a hardware box
that you don't know.
>> I would buy that premise,
and certainly we know supply chain concern.
You know, the speculation of Supermicro
which never was proved but still you don't know.
>> Exactly, I mean it doesn't matter who the vendor is
or what the country is.
It really is a concern in terms of
not being able to introspect what is happening inside.
>> So my IT shop and I'm running VMware,
operating and I want developers.
So now you go into telcos.
You revitalize their business model,
they got to rule out apps now.
Where do you guys see that connecting,
is it going to be connective tissue between?
>> Well think about it,
if you go at Telco we look at really three stakeholders
in the there, one is IT, the second is their B to B
or enterprise facing business.
And then the third one is their
core and access network or the CTO.
We are now have a value proposition of having
a uniform architecture across all three stakeholders,
with the uniform ability to create applications
and drop it on top of each of these infrastructures.
With the ability to manage and secure these again,
in a uniform way.
Not just that, but also make this work well
with other cloud infrastructures.
Private, hyper scale public, as well as Edge.
>> That's table stakes, you have to do that.
Cause telcos have to operate whatever.
>> Well it is but it's not,
I mean if you think about what the infrastructure
of a telco today is, it's far from that
because it's sort of a closed environment,
you can't access anything from a telco environment
in order to go build an application to it.
And it does not resemble anything
like any cloud environment.
>> Well, you could enable a telco.
I'm just kind of thinking connecting the dots here,
real time in the Cube is.
If I'm a telco I mean hell,
I'll take that VMware on a Dell EMC model.
Make me a cloud and I'll sell cloud services to the market.
Is that kind of a business model?
>> It is actually,
it's a very important part of our business model
because most telcos would not move their own infrastructure
from a network stand point onto public cloud.
But they are eagerly awaiting the ability
to operate their own network as a cloud.
And if they can have somebody manage that for them,
then that is very much within the house.
>> So you are enabling them the increase in the number
of clouds service providers potentially,
depending on the make up of the telco tier one, tier two,
tier three size, pretty much.
>> Potentially it's taking an existing operator
and having them operate in a more agile way,
and potentially increasing a new form
of a cloud service provider.
>> And the telcos wouldn't move into the public cloud
because of they want the control and the cost?
Is that right or are there other factors?
>> It's mostly control, it's not about cost.
It's about taking what is your sort of core netting
for a packet core or for a radio network.
>> Dave: Specialized networking.
>> Yeah, and there is also an angle on competition,
I think telcos are worried about the Amazons of the world
and the Azures of the world,
potentially becoming a service provider themselves.
>> And that's what I wanted to ask you,
the business impact of all this
discussion you guys are having is you know
you got the cost per bits coming down,
the amount of data is increasing faster,
you got over the top providers just picking off the telcos.
Telcos can't compete, their infrastructures are so hardened.
Will this all change that?
>> Absolutely, so I think that it has the potential
to changing all that.
I don't think all the telcos will take advantage of it,
some of them might end up being more traditional
and sort of sticking to where they were.
But for those that are willing to make the leap.
I mean as an example,
Vodafone is a customer that has actually gone in
with this architecture with us.
AT&T is working with us with the VeloCloud software
from VMware, bringing a new form of
branch connectivity through SD-WAN.
So these are all examples of telcos that are
actually leading the charter away.
>> Yeah but if they don't lean in to this vision,
it's either because they are protected
by their local governments,
or they are going to go out of business over time.
>> No, I would agree,
I mean it's sort of silly from our stand point
to be talking about 5G
and not thinking about this as the architecture for 5G.
I mean if you only focus on radio waves
and your wireless network, that's like a part of the problem
but you really need to have the ability
to deploy these agile services,
otherwise you could get killed by the OTTs.
>> So how do you compete against the competition,
what's the business plan that you have?
I see 5G, we see that in the horizon.
It's evolving, it's evolution, so to speak, pun intended.
Edge is certainly relevant for enterprises,
whether it's manufacturing or industrial, or just people.
>> I'd say there are two things.
One is, as I'm sure you heard from folks at VMware,
our vision is notion of any, any, any.
Where we've talked about any cloud
and any application and any device.
So that becomes one of the strongest differentiating
factors in terms of what VMware can bring
to any of our customers compared to the competition.
Right, nobody can actually make it real
across these dimensions.
If you then take that architecture
and use that to deploy a telco cloud,
we're now making investments that are telco specific,
that allow the telco to then take this
and make the most out of it.
As an example we are investing in open stack,
we're investing in containerization,
we just bought a company called Ohana.
And Ohana essentially allows the operator to go
and provide metrics from their radio access networks.
Use that to train a learning engine
and then feed that back so that the operator
can tune their network to get like
fewer dropped calls in a region.
So if you combine technology like that
with this any cloud infrastructure
that we have underneath that,
that's the best in class deployment methodology
for any telco to deploy 5G.
>> And your business metrics for you internally is,
get more deployments?
What stage of developing a 5G certainly at a certain stage.
But you know Edge is there.
Where is the progress bar if you had to kind of?
>> It's actually moved phenomenally.
I mean every time we have conversations like this,
we are moving the ball further in terms of how many carriers
are deploying on VMware on a telco cloud architecture,
how many subscribers are basically being serviced
by an architecture like this,
and then how many network functions are being deployed
to a VMware architecture.
So we are over a hundred carriers now.
We are over, we have about eight hundred million subscribers
or so, that globally are being serviced
by a VMware supported network.
And then we have essentially over 120 network functions
that are operating on top of VMware.
>> You are bringing all the things all the same stuff
that has been announced at the show,
all the stuff that's going to fold into the operating platform.
Or do telcos have different requirements
on the core of VMware.
>> It's both.
We take the best of what is there
from the overall VMware factory
and then as a team,
my team and then builds other widgets on top,
that are telco specific.
>> How big is your team, the opportunity for you?
>> Well, so the best way to look at it is
telcos globally spend about a trillion dollars
in capital investment and then probably 2x that
in terms of their operating expenditure
over the course of all of the things that they do.
And out of that I would say probably a tenth of that,
so if you take about 100 billion dollar opportunity,
opens itself up to infrastructure investment
in term of the kinds of things we are talking about.
Now they are not going to move
from like zero to 100 overnight right?
So if you take some period of time,
I would say a good subset of that 100 billion dollar
opportunity is going to open itself up
to this kind of infrastructure.
>> And there are business cases eliminating that 2x factor
or at least reducing it, is that right?
>> Exactly.
It's not just that >> More services.
>> That's a cost reduction alternative
but then you have the ability to go deploy services faster.
So it's really a combination of both
sort of a carrot and a stick.
I mean the carrot here is the ability to go monetize
more new services with 5G faster.
The stick is that if you don't do it
OTTs will get there faster and your costs
of deploying just simple services will increase.
>> Do telcos in your opinion,
what do they have to do to get the DNA chops
to actually be able to compete
with the over the top OTT providers and be more agile?
I mean it's obviously sort of new skills
that they have to bring in, and new talent.
>> Yeah, well first and foremost they need to get
to a point where their infrastructure is agile
and they get into a business model of knowing
how to monetize that agile infrastructure.
So for example, they could offer network as
a service on a consume as you go basis.
They could offer a platform as a service
on top of that network in order for OTTs
to go build applications so they can do
rev shares with the OTTs.
Or they could offer full services,
where they could go in and say,
we are the conferencing provider
for video conferencing for enterprises.
I mean these are all models that they can look at.
>> Great conversation, loved to do.
You're in Palo Alto? >> Yes, I'm based in Palo Alto.
>> We're going to have you in our studio,
we want to do more of a deep dive.
We love this area, it's super provocative
and it's important.
Final question for you though.
Pat Gelsinger here on the Cube, I asked him,
look back at the past ten years,
look back at the next ten years,
what waves should everyone be riding?
He said three things.
Networking, security, and kurbenetes.
Kubernetes being number one obviously,
he's promoting kubernetes heavily,
for obvious reasons cloud data, I get that.
But networking, that's your world, that's changing.
Which events do you go to
where you meet your audience out there in the telco?
Because networking is a telco fundamental thing.
You're moving packets around.
This is a big thing.
>> So for operator networking related stuff,
I would say, I mean the biggest shows for us
would be Mobile World Congress as an example, right?
That's where many operators are
but I would also say that when we do our own events like,
this is VMworld but we do vFORUMs in
in the Asia Pac as an example.
A lot of the telco conversations,
I find they are best done on one on one.
>> Yeah, vFORUM?
>> Yeah, vFORUMs are forums where we will go to have
one on one conversations or small group conversations
with our telco customers locally.
>> John: Shekar thanks for spending,
I know you got a hard stop, very busy person
>> Thank you very much, thanks for having me here.
>> Shekar Ayyar who's here inside the Cube breaking down 5G,
which is still pre-game mode.
A few innings coming, first inning's going to come up soon,
but Edge is super hot, a lot of telco customers.
We'll be back with more live coverage from VMworld
after this short break.
(upbeat electro music)