 Live, from Boston, Massachusetts, it's theCUBE, covering OpenStack Summit 2017. Brought to you by the OpenStack Foundation, Red Hat, an additional ecosystem of support. Welcome back, I'm Stu Miniman, joined by my co-host John Troyer. You're watching theCUBE, the worldwide leader in live tech coverage. Happy to welcome to the program, Darrell Jordan Smith, who's the vice president of telecommunications at Red Hat. Thanks so much for joining us. That's great to be here, thank you. All right, so Darrell, last year at the show, the telcos were like all in force. I got to interview Verizon. We're going to have Beth, who was on the keynote stage on Monday, on our coverage tomorrow. I know they're a Red Hat customer. When I hear at Red Hat Summit, there were some really big telcos that are Red Hat customers. So, tell us why telco and OpenStack, go so well together these days. Well, telcos are looking for an open source for innovation. They need to change the way that they deliver services today and modernize their network infrastructure to become more agile. And a lot of them are doing that because of 5G, the next generation of services that they will be deploying over their network infrastructure. They can't do that unless they have an agile infrastructure fabric and an agile software capability to deliver those applications over those networks. All right, well, there's a lot to dig into yet. Let's start with NFV was the use case last year. Well, 5G IoT, definitely want to get into though. But my understanding, I simplified it. NFV is just how the telcos can help deliver via software services that they have. I mean, think about how your set top box, I can get channels and I can get certain programming. Is that kind of what you see and how do they do their business models? Yeah, traditionally they bought appliances, hardware specific appliances. They put them in network operation centers and many thousands of those around the world. You know, in the U.S. there's tens of thousands of them. They're really moving more to a software based model where they don't necessarily need to buy a fixed appliance with its own silicon. They're going with commercial off the shelf X86 based technology. And they're actually deploying that in what I call next generation data centers around open compute platform being an architecture where you're looking at storage, compute, networking in a scalable fashion using open source technologies to deploy that in a massive scale. Yeah, very different from me. You think about like cloud might be a place where you have services run, but the telcos are pushing services with their software out to their consumers. Yeah, they're changing the core network infrastructure to support that. And at the mobile edge in these network operation centers at the edge, they're making those more agile as well in order to push as many services out closely to the customer, but also to aggregate content and data that their customers would acquire. So for example, you take a video clip on your phone. You know, there's no point in storing that in the core of the network. You want to maybe store that at the edge where maybe some of your friends would share it at that point in time. There's more efficient ways of driving that. I wonder if you can expand a little bit that term edge because we hear is that the edge of the network? Is that a mobile device? Is that a sensor for IoT in the telecom world? Is it all of the above? Well, a lot of people use it as all of the above, but in the context that I'm using it, it's at the edge of the network. It's not the device. That is a whole separate set of conversations and things that reach a very IoT centric. At the moment, the telecommunications companies want to make the edge more efficient. They want to build clouds around the edge. They want to aggregate all those different clouds and they want to build agile-based infrastructure. So similarly to the way that Facebook, Amazon, Netflix, Google deliver their services today, they need to get into that space in order to be agile enough to develop and deploy their next generation of applications and services. So at this point, open stack in its evolution with this customer vertical, it seems like we're not only talking about a cloud, but maybe a cloud of clouds. Yes, absolutely. I mean, telcos again, they typically have one of everything. They are looking at decoupled solutions in terms of the network-based infrastructure. They want to be able to manage every layer of that infrastructure independently of the other layers in order to drive maximum flexibility and agility into their infrastructure, but also so they don't let locked in to any one particular vendor. That's a big, big theme in the telco space. So you use the words agility and flexibility. So I, in a previous lifetime, I did work with some telecom providers and they were not known for those words of agility and flexibility. We're in a world now with open source, with CICD, we talk about upgradeability. A lot of the talk here at open stack is about manageability and flexibility and building, putting containers on top. Maybe we can go there next, but do you, as you work with your customers and partners in the telecom space, it seems like they've had to have a cultural shift. I see a lot of people from the carriers here, right? You know, the, and they are as long-haired and shaggy and barefoot as any other engineer here at that open stack summit. Has there been a real cultural shift inside telecom to accomplish this? Yeah, there's a real cultural shift that's ongoing. It's got a ways to go. You know, the telcos themselves are engineeringly orientated, so they traditionally have come from an environment where we build it and customers will come, where now they're looking at, we need to build it quicker and faster in order to attract customers. You know, get them to come and view our services, get them addicted to a certain degree, maybe the wrong word, but to our content. So building sticky services, you know, trying to reduce the churn they have in their business. You know, driving innovation through open source, because I think they've realized that innovation isn't necessarily within their own company, it sits elsewhere. So you know, which is the new Uber as it were? Which is the new Airbnb? What is the new WhatsApp-based application? They want to create a network infrastructure that's flexible enough with all of those attributes through API so those companies can develop innovative next generation content and services over their network infrastructure in order to attract and make services sticky for their customers. They're one of you can speak to the complexity of the solutions in the telcos space. Last year, you know, we spoke to Verizon and they love what they have, but they had to choose some glass, you know, walk over some hot coals to be able to get the solution together. These are big complicated solutions. You know, we've talked in general about OpenStack and trying to simplify some of the complexity, but can you speak to kind of some of the, how long it takes to roll these out and some of the effort involved for the telcos? Well, it's sort of a walk, you know, a cruel walk run process to a lot of them because A, working with open source is very different than what they traditionally have done. And as you mentioned earlier, traditionally they'll buy an application throughout the appliance. They'll take nine months to deploy it in all their centers and then another three to six months later, they might, you know, switch it on. In the software agile world, they got to condense that sort of 12 to 18 month period down to maybe three or four weeks. They may stand up a service, you know, for an event like the Olympics and then take it down after the Olympics. So there's a lot of complexity and change in the way that they need to deliver those services and that complexity isn't trivial. So it involves delivering quality of service through the deployment of next generation network infrastructure because they are regulated companies. So, you know, they've got to maintain that quality of service in order to be able to bill and meet the regulations that they have to adhere to in the markets that they operate their network infrastructure. Very different from the Googles, the Facebooks of the world. They don't have that sort of regulation over their head. The telcos do. So they have a level of discipline that they need to achieve in terms of availability of their network infrastructure, the availability of their services, the availability of their applications, and that links into a whole quality of service experience for their customers and it linked into their operation system support, into their billing system and the list goes on and on and on. So what we found at Red Hat is that, that is not trivial, that is hard. And a lot of the telcos are very engineering oriented. It's great working with them because they really understand the difficulties and the fact that this is particularly hard. They also know that they want to build it and own it and understand it themselves because of their business model. To them, the network is an asset. It's not something that they can outsource to someone else that doesn't necessarily understand that same degree of that asset. So they want to get their heads around that. So they need that reliability. From the eyes of a service provider, how mature is OpenStack right now? Is it in production? Can they trust it? We're more than a few years into the OpenStack evolution. So where are we in deployment? There are a number of operators that are in deployment. You mentioned one a few moments ago like Verizon. Yeah, AT&T was on stage. Absolutely, AT&T in production. The headlines found to be event. Exactly, I mean, and what they're doing is they're starting very pragmatically. They're looking at specific services and they're building slowly a service upon service upon service. So they go from a crawl to a walk and then to a run. I think what we're seeing in OpenStack is not if, but when these guys will deploy a mass scale. And we're beginning now to see a general acceptance that this is a methodology and or a technology that they can deploy and will deploy in the NFEI context. The other thing that's occurring in this space is they're looking at traditional IT workloads. So a telco based cloud, if you want to use that terminology, is just as capable of running IT based workloads and services as well. So a number of them are looking at their own enterprise and running those environments. And some of them are partnering with some of our partners to build OpenStack public cloud instances. So they want to try and attract services to that environment as well. Yeah, it's interesting you point that out. There's been that ebb and flow of can the telco players be cloud? As John pointed out, I worked in telecommunications back in the 90s. Agile and fast was not the thing of the day. One of the big companies who had bought a cloud company just sold off lots of their data centers. Do they feel that they're going to compete against the Amazon, Microsoft, Google's the world? Do they think there'll be service providers? Where do they see as their natural fit in the cloud ecosystem? So my role is on a global basis. In North America, they don't want to, I don't think they feel they can compete in the way that you were intimating in that regard. However, where they do think they can compete and since we're going to probably talk about 5G and IoT, that is the area where they see public cloud applications and services being developed. So they're looking at the insurance industry, the automotive industry, the manufacturing industry, and creating an environment where those applications can be built to many, many thousands of millions of devices connected to them. So I think the definition of in North America of public cloud infrastructure is going to evolve in that direction. In other markets such as Latin America and in Europe, some of the telecommunications companies believe that they can be competitive in that space. So more recently, Orange announced that they're working with OpenStack to deploy public cloud, Telefonica, Deutsche Telecom, China Mobile, America Mobile, they're all using OpenStack to try and enter that specific market space. Okay. Please talk to us about the 5G angles here. Obviously at Mobile World Congress, it was like the number one conversation when we went to the Open Networking Summit. It was there. You're the first person to talk about it that I heard. I didn't, maybe I missed it in one of the keynotes, but none of our interviews has come out yet. So how does that fit into the OpenStack picture? So 5G is the reason why telcos are building NFEI. That they're NFE, because they realize that to connect all of those devices to their network-based infrastructure, they need to do it intelligently, they need to do it at the edge, and they need to have a high degree of flexibility and agility to their network-based infrastructure to create an innovation environment for application developers to connect all those devices. So we talk about smart cards. There's a good example around 5G. You need low latency, you need the high availability, you need to be reliable, you need to provide all of that network infrastructure as an example, plus you need a portfolio of developers that are going to create all sorts of different applications for those vehicles that will be driving around on the street. So that without 5G, that does not happen. Some metropolitan areas, the amount of connectivity that you have access to in terms of the traditional cloud-based access networking infrastructure doesn't facilitate the amount of density that 5G will actually facilitate. So you need to be able to change the basis in which you're building that infrastructure to lower the cost of the network in terms of being able to drive that. All right, and I'm curious, I think about the global reach we were just talking about. Usually the global reach of a new technology like 5G lags a little bit in the rest of the world compared to Western Europe and North America. Well, I think in Asia, 5G is, if I look at what they're trying to do, the leading vendors, ZTE, Samsung, Huawei, they're heavily invested in 5G-based infrastructure and they don't have, their operators in those part of the world don't have an awful lot of legacy-based infrastructure to be able to have to replace. They can get there a lot faster. The other thing is with 5G for them, the applications and services in the way that people experience network-based access or the internet, if for one of another words, is very different than the way that maybe we experience it here in the US or in Europe. So I think you're going to see different applications and different business models evolve in different markets in Asia than you would say here in North America. In North America, I think that it's going to take a lot of the operators, different business models to look at maybe some of the higher order of applications and services that drive stickiness for their own infrastructure and network services, but also some of the more advanced applications like I mentioned, smart cars or smart homes or smart cities or energy or better ways of delivering products in terms of distribution to your home, those types of applications and services that won't necessarily, in some of those other markets, be there. And similarly for Europe. Daljord and Smith, really appreciate you joining us, giving us all the updates on telco, how it fits with OpenStack. John Troyer and I will be back with lots more coverage here from the OpenStack Summit 2017 in Boston. You're watching theCUBE.