 Live from Silicon Valley, it's theCUBE. Covering Mobile World Congress 2017, brought to you by Intel. Okay, welcome back everyone. We're live here in Palo Alto, California, inside theCUBE's new studios, 4,500 square feet in Palo Alto. Just opened up this last month and excited to be here. Breaking down Mobile World Congress all day from 6, 8 a.m. to 6 today and tomorrow. As their day ends, we're going to pick up the coverage, do the analysis, give some commentary or reaction to all the news and also the big trends. And my next guest here in the studio is Sar Goli, friend of theCUBE, CUBE alumni and former HPE senior vice president, GM of the Telco business, ran the cloud, done a variety of things with Meg Whitman at HPE. Now he's independent board member and in between, gigs on the beach, clipping coupons, as we say. Sar, great to see you, looking good. Great to be here, nice studio. I'm excited that you can come in. This is exactly why we're having this show here in our new studio because a lot of folks that don't take the big trek to Barcelona who don't have to can come in and talk to us. And you've been a veteran of Mobile World Congress for many years. Again, you ran, actually built the cloud business and also built the, I won't say NFV business, but essentially the Telco communications division for HPE. So you know a lot about what's happening in the industry and more importantly, Mobile World Congress. This is the year that all the accelerant is coming to the table. All the rocket fuel is being poured out to the bonfire. The matches are gonna be lit. It's called 5G, it's called IoT, Internet of Things, Internet of People. The devices look good. They all wanna be Apple. They all wanna be over the top, running entertainment, smart cities, cars. 5G is the holy grail, we're done. Seriously, where's the meat and the bone on this thing? Is it real? Is this transformation hype or reality at Mobile World Congress? Yes. Yes, hype or yes, it's real? There's a lot of hype, there's some reality. I mean, I think first of all, 5G is just the latest thing. It used to be LTE, now it's 5G. What does 5G actually mean? Really, for people, what 5G means is you should have a lot more capacity, right? So 5B talks about even up to one gigabit in certain cases, lower latency and so forth. Now, the thing about wireless is there's no secrets in wireless, okay? It's a physics game. Yeah, it's a physics. It's not like Ethernet where you can go from one meg to 10 meg and all you have to do is run Moore's Law and you're good. If that was so easy in wireless, right now we'd all be getting one gigabyte, right? But we're not. So the only way you increase capacity in wireless is through smaller cells and there's some MIMO technologies and so forth. 5G talks about technologies that will enable you to do that but it's much more of an evolution than a revolution and the people need to understand that. There's no fundamental shift what they're talking about in 5G is adding a lot more bandwidth. So using other today, most of the frequencies being used are sub-5 gigahertz. Those are great frequencies to go through walls. They're not that great in terms of capacity and there's not that much of them. Like AT&T might have, I don't know, 60 megahertz entire capacity they have in the US and that's not much. And so they're talking about using millimeter waves, other things like 27 gig, 28 gig, 60 gig. Now, those do have a lot more capacity. They have other problems, they don't go through walls. So I think instead of thinking about 5G we need to think about, okay, what problems are we trying to solve? Like what problems is this going to solve? I think in some sense it's, while everybody wants more broadband some of it is a solution looking for a problem. Yeah, it's a field of dreams too dynamic. Build it, they will come. That has been a network operator concept, right? And then we know the operators and you and I have talked about this on theCUBE actually many years, the operators are having business model challenges, problems challenges, there are opportunities but at the same time there's a bigger picture I want to get your thoughts on. So in a vacuum 5G there's limitations, there's physics but now that you're looking at a connected network and this is the end-to-end concept. So under the covers of wireless, assuming wireless has its topology, architectural, things you could do, smaller cells, different frequencies, obviously going through walls is preferred, longer distance, lower latency through walls, that's the ideal scenario. But at the end there's a bigger picture around the difference types of wireless networks but there's cars, there's mobility, actual true mobility, 60 miles an hour in a car versus walking down the street or sitting in a stadium or at home. So these are the use cases. How much of it is a wireless problem versus another problem NFE, end-to-end virtualization? Well I think- Help us parse that through, how should we think about this? There's two issues, I mean, so there's a wireless problem we can talk about with different segments that make sense and don't make sense or how much they have to evolve to make sense. And then fundamentally the networks are very, they're not that agile as we know which is why NFV really, if you remove NFV and you just say NFV is about creating agility. Yes, you're doing it through virtualization, yeah they are, but it's about creating agility, creating automation, right? You can't have these, a lot of these networks were designed years ago, even 3GPP, this is a decade old. And so yes, there's a lot of work that has to be done in creating much more agility in that work because the network isn't built for that. Just if you think about even simple things like number of subscribers that can go on and off, right? Okay, if you have a cell phone, like today if you look in the world there might be 8 billion subscribers, let's say. If you look at number of cell phones and so forth. But once you start IoT, you might have 100 billion because every device will be in the network. That's a different management system, right? Also those devices may go on and off every day, right? Because you buy a new device, you plug it in the wall, okay? Phones, you don't start a new phone every day, right? People buy a phone to use it. So the network becomes much more dynamic, the back end has to be more dynamic, that has a side effect. And so there's a lot of work that has to be done in the back end to make it more dynamic. That's the back end problem. And then they are working on it. Again- And the bright spots they are what? I mean, what are the bright spots happening today this week at Mobile Congress and the trends? Well, you know, I mean, Mobile Congress is a show, right? And these are not sexy things, so we probably won't hear a lot about them. But you know, you hear about orchestration, automation, network virtualization, basically moving all this to sort of the cloud paradigm where you have a lot more flexibility. I mean, if you think about what's happening NFV these days, for example, you don't hear a lot about it, but what's happening a lot is onboarding work, right? You know, okay, we've talked a lot about it, we've from that hype, now we're in the build out, right? So you hear less about it, that stuff is actually happening. So it's operational? It's operational stuff. They're modifying the system so that they can be ready to work when you get to that point. On the radio side, I think the important thing to understand is like you said exactly, there's multiple use cases for 5G. The most interesting and immediate one potentially is to use wireless to compete against cable, which is fixed wireless access. You know, there, you know, the telcos for years have wanted to do it, there was this whole discussion about fiber, it didn't turn out fiber is expensive. Yeah, you gotta trench it, you gotta provision it to the home, you gotta roll a truck. So Google, if you were to figure that out, but even for Google, it's expensive. People have done that, they're crazy, but Google's had so many deep pockets and Facebook does the same thing with their kind of R&D projects. No, but they, yeah, so they figured it out, but there are technologies, millimeter wave is a bit hard because it doesn't go through walls, but I think, you know, when we talk about these capacities, it's not for your mobile phone, it's for other things, it's mostly for fixed wireless access. There's a whole discussion about cars. I personally, you know, because we're talking about opinions here, I don't understand the problem so much because the reality is, you know, the car is gonna be a mobile data center, okay? So 90% of the data that's generated by the car will be kept in the car and the car will be sending analytics and metrics up, so it doesn't need gigabits. It's not like every time you turn, you need to get an instruction. I mean, maybe that's what the network guys want you to believe, because then you need like zero latency, but you don't need that. It's much easier to invest in the better system in the car, right? So the car is not gonna figure out. The car is a computer, it's not a peripheral. Yeah, it's a data center to your point. It's a full data center. It's the edge of the computer. So I don't think that's an issue. I think the car will need good coverage and so forth. You know, so I don't see- But that's a different thing. So let's take, cars are great examples. Let's take on this, because this is a perfect mental model. A car is gonna have all this capacity, like a big computer or data center. Or data center. Many data centers. A lot of things, a lot of instrumentation. A lot of software, glue. It's gonna have 10 computers, big systems. It's like a little data center. That also moves fast. So it's a true mobile data center. Yes. Okay, so it needs mobility. So mobility has trade-offs, right? With the wireless at least. And you have to- You don't move. Depends how you're- Again, it depends the capacity. Mobility has certain elements when you get into Doppler effect and so on. And so, you know, it's always a capacity trade-off, right? But you know, you can, I mean, all of you have talked on your cell phone or used data on your cell phone in your plane. We know this when the plane's landing. That's 150 miles an hour on the plane lands, okay? And it works pretty well. It's good mobility. We all cheat. Don't turn on your cell phones. I'm texting my- Yeah, exactly. We all have done it. So again, if you want to run a gigabit, it's a problem. Yeah. If you want to run less, it's not such a big deal if a car is going 60 miles an hour. So it depends. Now, again, so if you define the use cases, I need a gigabit for every car, and there's a million cars, that's a problem. If you define the use case as something else, it's not a big problem. There is a problem, though, and I think that is something that the Fibes is trying to address in terms of more of the backend of density. Okay, so one of the- Density in terms of signal or density in terms of- In terms of support. So for example, when you can never, the one place you can never use a cell phone is in a conference. Because too many people are trying to get on the same time. It's right, it's a statistical model. And it's- Day station issues, all kinds of- Breaks, and so with a car also, you're going to have high density, right? Because you have a traffic jam. All of these cars are talking and receiving. So that's a bigger issue. And Fibes does talk about that as well, but that's a bigger issue than pure capacity. Pure capacity, great. I'll give you this much megahertz and I'll do gigabits. You can do that on your Wi-Fi today. I totally agree with that. Let's take a step back. I want to get the little color on Mobile World Congress. Talk about what's going on right now. So it's dinner, people at parties. What goes on? People won't always ask me, John, what always happens? First of all, Barcelona is a great city. So as you know, we've been there together from some HP events, but also as well as Mobile World Congress. What's happening? The show, you always make the comments of BizDev show, which means there's business development going on. All the top executives go there. Deals are being cut, but also it's also a large trade show, as you will for mobile mobility. I think, like you said, I mean, from my experience, the biggest value of Mobile Congress is not the show itself with all due respect to the show. It's the fact that everybody and anybody who's somebody is there. That's why we're not there. Is there. And so you can meet people. And so if you want to meet a bunch of people, telco leaders and so forth, that's what you do. This is the place. You all say, okay, we'll meet Mobile Congress. So like, for example, when I was down there and I'm sure this is what people are doing right now, I basically go back to back from 8 in the morning till 10 at night in meetings, dinners, whatever, was CEOs of various telcos or CEOs of partners and so on. Everybody's there. And I never actually got to see the show because I never got out of the meeting. Yeah. And most of what happens there is that. And that's amazing because again, everybody's there. And there's a huge ecosystem involved. Talk about that ecosystem because this is the dynamic. And first of all, we don't have to go there because we have the cube here. So we're there virtually, digitally. And that's what we do now. This is great. Save ourselves the three day flight to go to Barcelona. But it's crazy there. But I mean, it is about the community because you have that opportunity to get the feedback, do deals. This is a lot of deals happening. Also feedback, trying to connect the dots and having the right product strategies. What are some of the things that you think is happening right now from a business standpoint in these meetings right now? Are people still scratching their heads on over the top? Is it the classic problems? What's the current state of the union? Well, I mean, nothing. I mean, you actually saw some interesting, right? You saw Wimplecom, right? Changed their name to some other thing. So I think what you're seeing right now is there's sort of multiple dynamics going on, right? One dynamic is there's people maneuvering around how 5G ends up closing. And there was some discussions about that. There was some release done about, hey, we should speed it up. And then Enrique said, no, this is not, this is silly. I mean, so there's some discussions. There's some maneuvering going on like any time when you're doing a spec and when does it freeze? When it does not a freeze, the sum of the tacos want this and so forth. So that's probably, that's sort of in the background going on. They're still trying to figure out, business models is still an issue. The people are experimenting and you're gonna see a lot of that. Experimenting with apps, experimenting with these monetization strategies. So there's a lot of that going on, trying to figure out, okay, how do we monetize the network in a better fashion? What do you think the best path is from your perspective just putting your industry hat on? If you had to kind of lay down some epic commentary on to the telco bosses, hey, you got to cannibalize your own, get out in front, what would you advise them in terms of what to get out in front on, what to double down on? Well, I think some of them are actually doing this, but I think first of all, I think they should forget about worrying about the technology. I mean, technology is very important we need to take care of that, but really they need to know what are they good at, what are they are strong at, right? So they're strong at a customer relationship. They have customers that they quote unquote have as partners with those customers. They're very strong, so what can you do with that partnership as opposed to all kinds of other random stuff? Now, if you look at what they're doing, they're doing different things. Some of them are buying different media companies, so on. There's no easy path, but they're going to have to use their strength as opposed to try to become somebody they're not. They're not going to become Google. They're not going to become Amazon. They're not going to become one of those guys. They do need to become more cloudified just to be efficient, but that's because that's sort of the, just to play you have to pay that card, but they're not going to be better than the existing, but they do have a very strong relationship with customer. They could probably sell them more things if they focus on good customer service and very, you know, customer are happy to work with them if they get a good deal and a frictionless environment. So, you know, I would certainly encourage all of them. I know many of them are focused on this, improve your frictionless interaction for the customer. If the customer has a frictionless interaction and gets a good deal, they'll do business with them. Are you worried about the Telcos customer relationship when they have this decoupling kind of trend happening where the consumers want to take their phone or device and uncouple it from the network and just have more mobility across networks? So if there's better connectivity, I could be able to hop between Verizon, AT&T, whoever. That seems to be something that a lot of folks technically are saying from an architectural standpoint, having that personal centric view versus a network-centric tie-in. Is that on the radar at all? Is that still kind of way fancy? I think that's more, well, I think, look, it's like people are still using AOL, right? So, I mean, I don't think... Who? Who? The point I'm saying is, you know, just be... Dave, what if it's Trump's, you know? I'm not going there right now, but we can discuss that later, right? The point is, if you, if you, the primary area where there's problems in that area is roaming, and there's a lot of discussion about roaming, right? Because, you know, 55% or 60% of people turn off data when they go to overseas because the roaming fares are so incredibly expensive, which makes no sense, really, because you're just a local person. Like, why would I have a longer cost because I happen to have an AT&T contract in Europe? I'm not using more data than somebody in Europe and it's going through the back end of the internet anyways. So I think there... It's a great way to jack the user with more fees. Yeah, but, you know, that's not sustainable. So I think there you're going to see pressure of people and there's some companies who provide apps and cards and SIM cards, but there's now softwares they're doing it. There you're going to see pressure and I think eventually that will go the way of the messaging where they'll come up with some solution. Yeah, they'll come up with something that will allow you to have data at a much cheaper rate. I don't know that, you know, does it make sense to switch carriers in the local market if you have a good price thing? I mean, you know, what's the point? So again, it all comes back to, do they give you a frictionless service? If you give you a frictionless service that is at a reasonable cost, then you'll use it. And so you got to look at places where they're going to have people leave them is where they don't do that. And there are places they don't do that. Roaming is one of those places. So I got to ask you about IoT. Obviously it's the hottest trend. AI is more of the mental model that people get their arms around. They see virtual reality, augmented reality, they call that AI. More of a mental model, it's really not AI. But IoT is really with the action as people see networks where devices, as you mentioned, are coming on and off. You just don't provision those as static devices there. Very dynamic. Your take on the IoT market, what's your view on that? Because a lot of action happening. Yeah, so I've been involved in IoT and people, different people have different names for what T means, and I'll go there here. T and P, things and people. But I mean, watch out. IoT could mean things, it could mean other things too. But the point is, you know, the IoT, you know, and I was in a company that was doing IoT when we called it machine to machine, maybe if we were to call it IoT, it would be better, I don't know, but the point is that IoT is this is extremely fragmented. It's a super, super fragmented market and it has different ecosystems. The more complex part of IoT is not the front and it's the back end. How do you manage devices? How do you tie them to some app? How do you configure them, provision them, you know, in eight streets? Because the back end infrastructure are different. Some are IT based. So also there's nobody like, think about it, you got all these devices. How do you upgrade them? How do you make sure they don't start a denial of service attack on their own? How do you provision them? How do you manage their life cycle? Right, you know, HP has some product in that area, actually global connectivity platform, but other people as well. So this is a bigger problem. The back end is much bigger problem than the front end. Because you know, what's the problem? I mean, again, hypothetically, right? I can stick a SIM card into anything and it's an IoT device, okay? Most of these things do not have a high bandwidth and you know, low bandwidth coverage is pretty good in urban centers, not if you go to Utah, but other places, right? So the biggest problem is the back end. Now, obviously there's a lot of advancements that can be done in the front end too because of power issues, right? The biggest problem with IoT is depending what you want, you have a power issue, right? You don't want something, you know, if you put a battery, for example, you know, we used to do this back in the day, right? You built these, we built these little devices, you stick them on containers, right? And then, you know, you can find out where the container is at any given moment, okay? That's great, but you know, how long this thing lasts, right? So, I think IoT is a very big thing that's happening. I think most of the problem in IoT is not in the front end, it's in the back. Yeah, I would agree with that. Also, it allows you to get more data too, other problems is strong enough more data, which is security, data, IT management, basic stuff. Yeah, it's very basic stuff and that stuff is hard to fix because, again, usually IoT is not a green field that are going to connect to something that exists. You're just augmenting it with IoT, like if it's power meters or something. So now, you have this existing ecosystem that has to interact with something that's brand new and so there's various companies who build interfaces and how to solve it, there's management issues. But no, I think IoT is real. So let's talk about cloud. So cloud, you also had your hand at HP as well, you had a wireless background, the folks might not know that as well, going back before then. The cloud really is an opportunity. We see that with Amazon and then Microsoft now got their stock up and so obviously cloud, it's a bigger game, it's hybrid, it's happening and then you have all these other fringe things developing around the mobility piece. How does the cloud change in the IoT, I mean, I'm sorry, the Mobile World Congress game? I mean, because it's now a show that kind of blends, it feels like CES on one hand, it feels like Cloud World on another, it feels like IoT and telco world and all these things are kind of in a melting pot. Well, I think to me, when I look at Mobile Congress, I think of, okay, it's telco world really because it's whatever the telcos happen to be doing is what the show is about, right? And you think about the telcos, right? We're talking about companies that have a capital, like I think 18T spends like what, $20 billion a year or something in that range that's what we're talking about. So you're talking about hundreds of billions of dollars of capital budget and whatever those folks are interested in is what shows up in that show. So it's still a telco show, Dom, and you don't see that changing at all? No, but telco is, what telco is is changing, right? So, I mean, the telcos now, I mean, they have broadcast and have, so what I'm saying is whatever the telcos are interested in is what shows up in that show. Drones, I mean, cards, the telcos that have their hands on all these things and that's why it shows up in the show because ultimately, again, the show is about the telecom space and the primary players, if you go down there, you know, the big, the booth that are as big as the country club, you know, the Ericsson, the Huawei's and so forth, it's a telco show and people who wanna be relevant like Intel as they wanna be more relevant to wireless is building bigger and bigger booth over there. But what telco is really is about connecting things and if there's more things to connect, telcos get involved in other things. If they see a business opportunity, for example, drones, let's go back to talk about that because there's a whole drone day and all this other stuff there. I mean, drones need higher, I don't think they need so much bandwidth, although it depends what kind of video you wanna do, but they do need reliable connectivity. It's something useful, right? And today, you could argue connectivity, you know, it's not super reliable, it's pretty reliable, but you know, we all have drop calls every five minutes, right? I mean, if a drone drops a call, that may not be that easy. So there's use cases around these things that... And back to your earlier point, I think this is the most important for the folks to listen to and hone in on is that there's a use case in every corner depending on the view of the market. I mean, drones, this is one, take virtual reality, augmented reality, that's another. IT enterprises connecting, entertainment over the top, smart cities, I mean, these are all kind of... But I think what... Nuanced areas. You're exactly right, but when people wanna understand, you know, separate the hype from the non-hype, is see if you can understand the use case, right? If you can't understand the use case or if the use case seems out there, then the technology is probably out there, right? You know, the technology on its own is fascinating, but if you don't, if there's no use case that makes sense right here right now, like again, like for example, you know, if I got a gigabit to my phone right now, would it make a difference in my life? You know, extra 20 hours of battery life would make a difference in my life. Yeah, so this is a good point. Battery life's more important right now than connectivity, but as the network transformation, which is a big buzzword for this show, is coming to the surface, that's an end to end architecture with software. So if you think about per person cloud, software, delivering of apps and services, that's different. Now the apps might have more headroom, in that case, but then to your point, the back end's gotta be, under the hood has to be smarter. Or is network transformation not yet there? Is that still? Well, I think what's happened is that the OTTs, what the OTTs did, right, the OTTs started developing 20 years later. And surprise, surprise, when you develop 20 years later, you have advantages. Doesn't matter who you are. And so their back end is much further generation than the telco's back end. And so that's why when you connect to OTT services, it's a consumer experience. It feels seamless and so forth. When you connect to the telco's back end, it's sort of a mishmash. And so they need to sort of fix that. And that's part of the NFV transformation they're working on. And again, it's not because they had any limitations, it's because they had existing stuff. It's much easier to build from scratch. Final comment on Mobile World Congress this year and outlook for the next year, your thoughts? Well, I think we need to parse out what actually comes out of there. It's still early. I think 5G is going to be what people are going to talk about. This is the thing, and it means multiple things, but that's because the entire telco world, if you think about, if you look at the revenue of the suppliers and so forth, right, they've been on a holding pattern ever since 4G sort of in China, they finished 4G deployment. And so the next big capital spending is going to be 5G. And so you're going to see the providers push anything to get that going. That's just the bottom line. Great. Sargillai, a final comment. What are you working on now? Obviously, we got to know you at a personal level with HPE and for senior roles. And the last one was really handling that telco business, which you grew up from like a handful of people to hundreds of people. What are you looking at? Thousands of people. Your land grabber, kingdom builder. That's right, that's right. Empire builder. Empire builder. What are you up to now? What are you looking at for opportunity? I know you're doing some investing. You're on some independent boards. What's your world like now here in Silicon Valley? What's your activities look like? And what's your thoughts on the Valley in general and entrepreneurship and your activities? You have an hour to talk about that, though. You know, first of all, like what I'm doing, the good news is I'm sitting here in Silicon Valley. And so I'm very busy doing various interaction with the VCs, was start-ups, consulting, looking at different businesses. There's so much interesting things going on. It's every morning you can look at new things that people bring over, whether tug-related, not tug-related, there's some amazing things going on. Something from new wireless protocols to codification and so on. And I also sit on a few boards. So I'm spending a lot of time doing that, looking at different things. What's exciting for you right now? What's getting you jazzed up? Oh, there's so many different things. Like I said, I think the things that are- What's the coolest thing? The coolest thing. Some of it is, some of the most cool things are stealthy, I would say, but I'm looking at some wireless stuff that's pretty revolutionary. That I think could be new protocols that sort of change the whole dynamic of how wireless works. That's pretty interesting. And then I'm looking at some other things that are just how you apply cloud to different problems in the world, right? If you look at the cloud paradigm, it's existed for a fair amount of time now, but although we talk about it all day, most of the things in the world, most of the apps, most of the problem sets are not leveraging any of the cloud. They're still at best using old- Recycled IT, basically. Recycled IT, or sometimes even Windows 98, for all you know, right? So it's like in Africa, Africa went to wireless directly, they never did wired. So there may be a lot of industries that never go from Windows to proper data centers. They just go straight from basic Windows directly to the cloud. There's lots of opportunities that are interesting there. Looking at a few CO options, but it's very exciting. I mean, there's so much going on with AI. There's just so many things happening. It's really just- If you look into that tomorrow, you're going to come by tomorrow at 4.30, if the folks watching, tomorrow at 4.30. Pacific Times, sorry, we'll be back in here in the studio. We're going to dig into the entrepreneurial landscapes. I think one of the things that you highlighted that we were talking about earlier is that sometimes you have technology looking for a problem and the reality is most of the game-changing opportunities come out of left field that no one sees. These are the revolutionary game-changes, the new technology, the hard stuff, not just some app that gets built. There's some real hardcore tech that could be applied to some of these real problems. And I think that's going to be key. Sargalah here inside the studio, breaking down Mobile World Congress with theCUBE here in Palo Alto, covering what's happening in Barcelona. We've got some still phone-ins late night in Barcelona. We're going to make those shortly. We'll be right back with more coverage after this short break.