 from the Palace of Fine Arts in San Francisco. It's theCUBE, covering AT&T Spark. Hi, I'm Maribel Lopez, the founder of Lopez Research, and I am guest hosting theCUBE at the AT&T Spark event in San Francisco. And I have the great pleasure of being with Vishy Gopalakrishna. He is the VP of Ecosystems and Innovation at AT&T. And Vishy, I've known you for a long time now. I've known you through companies that are as diverse as SAP to AT&T. Could you tell us a little bit about what VP of Ecosystems and Innovation does in this concept of the foundry that AT&T has had? Sure, first of all, nice to see you again, Maribel. Nice to see you. House Cross, no new people, just different business cards. Yes, exactly, exactly. So Ecosystems and Innovation, so this organization has been around at AT&T for about seven years or so. And it was set up to fundamentally answer this question. How can AT&T systematically tap into innovation that happens outside the company and then bring it inside? And then over a period of time, become as good at adopting some of those principles of innovative thinking, innovative principles of problem solving into the company itself. So if you think about ecosystem and innovation, there are three key pillars to ecosystem and innovation. One of them is called ecosystem outreach. So this is a part of the organization that acts as the interface to the broader startup and VC community. Right. So this allows us to keep on top of innovation happening across a wide variety of technology, waterfronts, networking, security, virtualization, all the way up to AR, VR, AI, machine learning, et cetera. It wouldn't be innovation if they weren't together, right? People try to really parse them, but true innovation comes up looking at some of the intersections of technology. Absolutely, and we're also agnostic in some sense about where the innovation comes from. Because all we're trying to do is apply innovation to a particular business problem. And the Foundry is the second component of the ecosystem and innovation organization. Think of the Foundry as centers of innovation. There are six of them around the globe, four in the US, one in Tel Aviv, Israel, and then US one in Mexico City that we opened in March. And these Foundries represent fundamentally an environment within AT&T where we can rapidly prototype new technologies, de-risk new technologies before we introduce them into the rest of the organization, and actually also provide a way for us to bring proactively new promising areas of technology to the rest of the business. So the Foundries, if you will, serve as the leading edge of technology innovation within a company like AT&T. Well, I've been in the Valley for more than 10 years now. I came from the East Coast. And the concept of an innovation lab and innovation foundry isn't new. We've seen it come and go with established companies and with new companies. So I remember the launch of the Foundry. You said it's about seven years ago now. I can't believe it's even been that long. What have you learned in that time? And how are you making it work? Because I think everybody wants to be innovative and they want to take particularly established companies these innovations and bring them back into the corporation. Can you give us a little more color and context on what you think you've done well and what surprised you? Right, and that's a great point to make about the kind of the relative longevity of the organization within a company like AT&T. And it's grown apparently with all the... Yes, and we expanded to other locations outside. I think some of the lessons we've learned are that no organization stands still. AT&T, as we know it today, is different from what AT&T was seven years ago. The kinds of businesses we are in, the kinds of capabilities that we have to bring to bear, markedly different from what it was seven years ago. And the nature of the competitive kind of waterfront is also dramatically different. So which means that as an innovation organization, we've had to evolve almost lockstep and sometimes ahead of the organization itself. So that's been one thing that we've done is that we've made sure that we always are aware of where the company's going so that as we look at what kinds of innovation might apply, might be relevant, might be material for the corporation, we know that it's always grounded in what the company wants to do now in about two years from now. So that's very important. So forget the science projects and try to get something that's practical to the business but also the edgy, right? You want to be edgy. Yes, and it's an art and a science. We like to focus on innovation that's in context. So pure innovation is kind of interesting but we always like to bring it back to either an internal stakeholder or an external customer as a stakeholder to sign off and be almost the voice of reason to say, yes, this is interesting technology but this is how it might or might not apply to my business problem. Do they ask you for things? Does the organization come to you and say, hey, we're looking for blah and... Absolutely. In fact, a big part of what we do as an organization is actually keep the dialogue with the internal stakeholders kind of ongoing and active so that we always need to be aware of from a business standpoint, what are the imperatives that a business leader is facing? Because let's face it, a lot of these business leaders within a corporation as large as AT&T have are running P&Ls that are pretty large. So for us to bring relevant and material innovation to them, we have to be aware of what are the kind of the two or three top key problem areas that they're looking at. Is it cogs reduction? Is it operational simplification? If it's a big part of our network organization, what parts of network optimization are they most interested in? So being aware of that informs us better and in some sense helps us to curate what kinds of innovative solutions we bring to them. Now, you are talking about how you put these innovation engines around the globe and I imagine that you are learning and gaining different things and insights from these different groups because there are phenomenally different ways people use technology depending on where they are in the world. So can you share a little bit with us about what's exciting, what you're seeing in the labs today? Are there geographic differences that we should be aware of as business leaders when we think of trying to roll out technologies? Sure, I mean, I'll give a two-part answer. One of it from a kind of areas of kind of focus for us. One, as we just finished the panel on kind of edge compute. So that's a big focus for the Foundry Organization is trying to understand the use cases in which edge computing might actually give a pretty dramatic improvement in user experience. What is the role of the network edge in doing that? So working with a broad ecosystem of partners with established and startups to actually make that happen. So that's one big area of focus. The other thing we're doing is, a big part of H&T's business is actually focused on the enterprise side through H&T business. So we have two Foundry locations, one in Plano and one in Houston that are focused exclusively on customer co-creation with our enterprise customers. For the past five years, we focus exclusively on IoT and use the Plano Foundry to co-create around IoT for customers. In terms of differences across geographies, I think the most salient one is the one in Mexico City. We actually started that with the very explicit intent of innovating for emerging markets. Emerging markets have the need for high-performing, high-quality solutions. Exactly, so you need to deliver them at a much, much lower cost than the emerging markets actually will bear. So which means that you have to frame the problem differently. You have to go about innovation very differently and oftentimes you'll have to tap into the local innovation ecosystem as well. So that's a big, big part of what we're doing in Mexico as well. Trying to tap into the global network that we have as a company through all of these six Foundry locations, but making sure that we're tailoring it to what the local Mexican market needs. I'm actually very excited to see how innovation has been rolling out around the world. One of the things that comes up in every dialogue I have around innovation right now and frankly in most products is AI. Do you see a role of AI happening in the Foundry today? Yeah, we've been doing work on AI for quite some time. In fact, we've been doing a series of projects for our internal kind of organization around applying machine learning techniques to some very complex network optimization problems. And we've been doing that for about 18 months or so, yeah. And we've been looking at even ways to apply reinforcement learning to some very classic network problems as well. As part of some of the work that we're doing around edge, we're looking at ways to do inferencing at the edge for a variety of use cases, including, for example, a public safety or a first responder kind of a use case. So absolutely AI and machine learning continue to be one of the areas that we spend a lot of time on. Well Vishy, it's been great talking to you today here at AT&T's Shape and look forward to seeing you again soon. Thank you, medieval, likewise. Maribel Lopez, speaking with theCUBE. Thank you.