 Live from Silicon Valley, it's theCUBE. Covering Mobile World Congress 2017, brought to you by Intel. Okay, welcome back everyone to our special two days of coverage of Mobile World Congress 2017. I'm John Furrier here in the Palo Alto studios covering what's happening in Mobile World Congress in Barcelona, Spain. Of course, this is our day two of wall-to-wall coverage, six 8 a.m. to 6 p.m. for two days. And of course, as we kick off our day two and get early morning here in California or mid-morning, they're ending the day in Barcelona and all the news is dropping. And again, it's continuing the theme of 5G, IoT, and the notion of these super demos, all the flair and glam around IoT, AI, and everything else. And on the phone right now in Barcelona, Spain, is our friend and analyst with the Futurum group, Scott Reinovich, who also be co-hosting with theCUBE at ONS Open Networking Summit, long-time industry analyst, guru in the space around mobile, certainly SDN and what's going on. Scott, welcome, and thanks for taking the time to call in from Barcelona. Thanks, John, great to be here. And also, I might add some color to one thing you said, so the day was winding down. Apparently in Barcelona, the day never ends. It goes all the way through. Well, the show is ending, but now the real action happens, all the hallway conversations at dinner, and certainly we know that you take a nap around this time and get ready to go out and burn the midnight oil till three in the morning. We have many stories in Barcelona, but let's get down to what's happened today in Barcelona. What's the big story? What are you seeing on the ground there? What's the vibe? Give us some insight into what's happening, the experiences you're having, and what's the big stories today coming out of Mobile World Congress. Yeah, sure, John. Well, as you know, there's a lot of hype about a lot of buzzwords, so you gotta throw all the buzzwords out there, IOT, 5G, self-driving cars, VR, AR, augmented reality. If you run through the halls, you see a lot of these gizmos and gadgets, and I would say the sea has shifted a lot every some years, as you know, a couple years ago, it was all about Samsung's new tablet or the latest phone, and now it's more about these kind of more advanced technologies. They're called interactive technologies that we're gonna see coming down the road the next few years. So the show has been very telco-oriented. Still, it really is a device and telco show, basically. The device guys had their moment in the sun on Saturday and Sunday, but Monday kicked off really the telco show, which is really about the telcos trying to figure out their future. Their core competency over the years has been how to provision subscribers and billing, and been trying to figure out the over-the-top, and now as you look at the software that's coming out with the 5G plus the end-to-end, some of the things happening at the network transformation area, there's some real action happening. I wanna just get your thoughts on, is this the time where we're starting to see the needle move on the progress of really bringing the kind of networks that are gonna power the cool technologies and promises of use cases, whether it's eSports up to driving cars that are essentially data centers, huge amount of data problems, huge amount of network reconfiguration. Is this the time where there's an inflection point? What's your thoughts? Yeah, that's a great point. You have the service providers for a number of years, it felt a little bit, I don't know what the word is, you're spurned by success. I mean, they created all this plumbing and they put this massive investment into LTE and broadband and really enabled all these applications, but there was more people like Apple and Netflix and Amazon that kind of stole the show by leveraging that bandwidth for these new services, cloud services, music services, of course, Netflix, the most popular internet service in the world. And so the service providers kind of feel like 5G is another opportunity that they don't wanna squander and so they're being very careful about how to position that, but to your point, they have realized that they absolutely need to virtualize their network because what's going to happen with 5G is you have this massive amount of bandwidth, but you need to slice it up into different, they call them actually network slices so that you can provide all these advanced services and that's where the service providers wanna figure out how they're gonna monetize that. So it's certainly a launch pad for the technology, the somewhat maligned technology known as NFV, network function virtualization, but I think that the pressure to get 5G out is going to accelerate their investment in NFV because they need that cloud platform to kind of serve up all these next generation services. Is the Telcos NFV efforts gonna make them more cloud ready in your mind? Is that the sentiment? Is it that they have to kind of do a lot of things right now and the question is, what are the use cases if they are cloud ready and they can get their act together, the network layer to power these apps that are gonna be running on 5G? So, you know. Yeah, yeah. I think so. I mean, they're progressing. AT&T makes periodic announcements that they've virtualized, whatever it is, 30 or 40% of the network and Verizon are from an interesting company, Radisys, which recently got a $70 million contract from Verizon to install NFV infrastructure. Now, that's not $70 million is a drop in the bucket in terms of capital spending, but for a small virtualization platform coming like Radisys, that's a pretty big move. And so I think you're seeing this stuff finally becoming real and they are gonna have, I mean, what NFV will bring to them is a much more flexible platform. It's built based on the cloud web scale model where you snap in a bunch of servers and all the networking is virtualized and you can move things around in the cloud and they wanna take advantage of these services that can offer whether that's say a virtualized enterprise security service, you know, security service in the cloud where you go into the Verizon data center and you wear it out and then they have a cloud security model that will protect you or, you know, other, what we call virtual network functions of another hot area you've probably heard of is SD-WAN. There are a lot of SD-WAN services being rolled out and what is that? That's a virtualized kind of LAN solution that doesn't require you to say you have a bunch of branch offices around the world, you don't have to ship them all routers and then hook them up with, you know, expensive lease lines. You can kind of plug them into the cloud if you will and, you know, there's a bunch of hot companies in that area including, you know, Ariaka Networks, Fellow Cloud, Viptela, which are all mentioned as active kind of acquisition targets these days. So there's definitely still a lot of virtualization thought going on, but I will say it took the backseat to, this year it took the backseat to 5G and IoT. Yeah, great, great commentary. I got to say, I talked with Intel at an exclusive interview with Sandra Rivera from Intel, GM of the Communications Network Platforms Group and, you know, we were talking about the dynamics and I think the big IoT thing has been the autonomous vehicles, obviously smart cities is, you know, you got some surveillance, you get cameras and stuff in towns and cities and certainly the smart home, you can't, you can't move an inch in the industry without hearing about Echo and Google, you know, in the home kind of voice activated automation and then you got a media entertainer, you mentioned Netflix, you know, all these things are essentially coming back to, you know, rear its data center-like environment. I mean, this is like the data center meets consumer and we were commenting that the autonomous vehicle is essentially a data center on wheels and that, you know, there's going to be trade-offs between, you know, low latency, high bandwidth and true mobility. You know, cars are not going to be dictated by millimeter, you know, wave technology because, you know, they might have different frequencies so this brings up this diversity of network and so I want to get your thoughts on how you see the market evolving with the pressure for open source software. You know, you mentioned SD WAN, software-defined WAN, software-defined radio, software-defined networks, software-defined data center. The whole world is software-defined so the role of open standards both on open source software as well as open wireless, if you will, meaning not one vendor is going to own it. How do you grok that? How do you pull that picture together and how do you advise your clients on what this actually means for them and their impact? Yeah, that's a great question. Well, I mean, you kind of hit the nail on the head with your question because I spent much of the show looking at all of the, if you want to break it up into two buckets of things here, you talked about cloud enabling, so the infrastructure that builds the data center but as you pointed out, this is a service provider show so a lot of the discussions around connectivity standards of course and it's really amazing, John, it's amazing. You know, we can boil these things down into these neat little buzzwords, IOT and 5G, but just this today, you know, I talk to people about at least five different forms of IoT standards and of course 5G today is a super controversial topic, so let me just break those off one by one. So with IoT connectivity, you have something called LORATWAN, which is a open standard, an IETF open standard, and there's about 500 members signed under the LORATWAN Alliance, including Cisco and IBM and Schneider Electric, so that has a fair amount of momentum, it has certain characteristics, very low bandwidth, but not real time, so I'll just give you one example if you want a connected cow, John, they saw a connected cow, you know, and the idea is that you are running a massive ranch operation, you want to track your livestock, so you need a very low cost device that does that. That's an example, you also have so-called NBIOT, which Cisco is pushing pretty hard, narrowband IOT, is another standard that's gonna be used for IOT applications, you have the 3GEP, working on LPWAN, which is kind of like a 2G recycled for IOT, you know, the characteristics of IOT have to be really cheap, it has to be really low power, so you can't use LTE, right, so that's another one, and then you have a couple of hot private companies, SIGFox, which has over $100 million funding, it might even be hundreds of millions of dollars in funding based in France, and then a company called Engineer, which is spun out of the San Diego Qualcomm hotbed with a lot of really interesting IP, they have a technology called RPMA, so those two companies are building networks worldwide based on proprietary standards, they said, we're gonna build an IOT, a network, a radio network for IOT all over the world, but it's gonna be based on our proprietary technology because it works better, so that, I just gave you IOT, right, okay, and then you have 5G, which, you know, dozens of service providers all announced different things about that, and actually argued about, 5G doesn't exist, right, so you have Verizon rolling out a pre-standard 5G trial, and then you have something called 5G NR, New Radio, which is a multi-spectrum flavor of 5G that Qualcomm and Ericsson are fooling around with, and they have people like Nokia saying, whoa, whoa, whoa, slow down, we gotta, we can't push 5G before it's time, we don't want it to fragment, you know, we don't want it to just splinter all over the place and pull like an Android, so, I don't know, that was a mouthful, but if you... So what does it mean? To get the idea of how the buzzwords, when you unpack them, they get really complicated. Is it forking, is 5G essentially a land grab right now, or is this all part of the evolution in your mind, because it does seem that, you know, you need a catalyst, obviously Intel's taking a leadership position, they've done a deal with Nokia, you've seen some Ericsson announcement, but then you've got Qualcomm on the other side with Snapdragon, you know the competition between Intel and Qualcomm's at an all-time high, certainly on the handset side, but at the end of the day, the network is the key at this point, and so the question is, is 5G is gonna be broken down by the forking? It's not a land grab. It's a hyper. Because 5G will not exist for at least, you know, they won't be rolling it out till 2020, and I heard several people argue today that it's really 2021, but so you can't, it's not a land grab, it's actually exists, right? So it's all about positioning, you know, your marketing around it, but just to give you an example, one of the controversies today was just accelerating, should we accelerate 5G? And you know, and then DT came out and said, well, we have to be careful because it's really expensive. 5G is actually gonna be more expensive than LTE, and if you don't have the return on investment, you know, you're gonna kill yourself. Well, Intel, Intel claims are gonna have 5G. Scott, Intel claims are gonna have 5G at the Winter Olympics in Korea. That is what they told me on the record. Not sure if that is a trial network, is that gonna be just a base station? Yeah, they'll have some form of 5G. I mean, what I'm trying to point out with all these things is when somebody said the buzzword, it doesn't mean one thing, right? It means like, yeah, it means like several things, and there will be, there will certainly be pre-standard 5G trials. I'm just saying right now, we don't even know what that is. We don't, nobody has even settled on what the spectrum is for 5G. You know, there's like been four different announcements about different spectrums, and then we have this 5G NR thing, which is a multi-spectrum technology. So it's really hard to say. I'd be shocked if anybody in Intel definitively knows what 5G looks like at this point. Well, certainly it begs the question for a follow-up conversation around what is 5G. Certainly people argue what that means in terms of bandwidth, but the question we had on theCUBE yesterday is what apps are even ready for a gigabit, and what does that mean? Is that fixed wireless? Is that true mobility? Is that latency versus bandwidth, et cetera, et cetera? You know, the debate will rage on. Honestly, I just want to see more bandwidth. I love connectivity, so. All right, Scott, thanks so much for taking the time. I've got to ask you a final question. You know, what's the best party so far in Barcelona? What's the best tapas you've had? What's the scene like in and around town? What's some of the buzz? Well, I haven't been to any big party, so I can say that I've also been to private dinners, but you know, the food is amazing, as you know, and so is the wine. So, you know, it's pretty hard to go wrong in Barcelona. It's probably like a foodies paradise, I would say. Yeah, it certainly is. When we were there last time, it was amazing. Great, great Gothic vibe. They're great little restaurants. Scott Reinovich here inside theCUBE, and you know, Scott, you got some new credentials here. You are still at Reino on Twitter, but you now have a new firm called Futurum, F-U-T-U-R-I-O-M. Research, congratulations. Futurium, yep. Futurium, so appreciate it, and thanks for taking the time, and I want to give you a shout out on the new gig, and you'll be hosting for theCUBE at the Open Networking Summit, ONS, coming up. Appreciate that, and thanks for calling in and sharing the insight, what's happening in Spain and Barcelona for Mobile World Congress. Thanks so much. Thanks, John, it's great. Thanks for having theCUBE cover this stuff. Great job. We'll be back with more after this short break. This is special two days coverage inside the Studios in Palo Alto live here in California, breaking down what's happened in Barcelona with all the news, the analysis.