 Live from San Francisco, it's theCUBE, covering Samsung Developer Conference 2017. Brought to you by Samsung. Hello everyone, welcome back to theCUBE's live coverage, exclusive coverage of Samsung Developer Conference, SDC 2017, I'm John Furrier, the co-founder of Slavangle Media. Next guest is Patrick Moorhead, who's the president and principal analyst at Moor Insights and Strategy, friend of theCUBE. We see him everywhere we go. He's quoted in Wall Street Journal, New York Times, all the top publications. And today was just on Power Launch on CNBC, here for our PowerCube segment. Welcome to theCUBE, good to see you again. Hey, thanks for being here, and I appreciate you putting up with me, heckling you from outside of theCUBE. Always great to have you on, hard hitting. You're one of the best analysts in the business. We know you work hard. We see you at all the events that we go to. I got to get you to take Samsung. Obviously, now that you run Power Launch on Amazon, obviously winning in the cloud, Samsung downplaying their cloud, but calling it about smart things. I get that, the cloud is kind of fragmented, kind of trying to hide the ball there. I get that. But they talk about IoT, which you got to talk about cloud without IoT. What's your analysis of Samsung? Yeah, so first off, Samsung is a collection of really, really successful stove piped companies, right? You have displays, you have semiconductors, you have mobile phones, you have all these different areas, and they say a lot of times, your strength is sometimes your weakness, and the divisions just don't talk a whole lot. But what they did, and this is the first time I've seen this in a long time, is they got on the same page and said, you know, we have to work together because IoT and connected, and intelligent connectedness can't be done in stovepipes. We can't all go do our thing. So they're agreeing on standards, they're doing some really good stuff. Yeah, and also we know from the cloud game, obviously now go back to the enterprise, there's more consumer backing in from the edge, across the edge being devices and other things. I get that, but now the horizontally scalable nature of the cloud is the holy grail. I mean, we've seen Amazon success, continue to boom there, they do more compute than any other cloud, I think combined, you can make me say Google with their internal cloud. That horizontal resource pool, serverless as an example of a trend, IoT, you got to have the stovepipes got to be decimated. However, you need specialism at the application level. That's exactly right. And a smartphone will act a little bit differently from a camera, which will be different from a refrigerator, as we saw, right? Samsung wants the new meeting area to be, well not the new meeting area, we all meet in the kitchen, but the connected meeting area. So they all act differently. So they have to have, even though they're different devices, they have to connect into that horizontal cloud to make it efficient enough and effective enough for good responsiveness. And I like the message of smart things. I think that's phenomenal. I like that because it connects their things, which are consumer things. And people like that. Like you said, very successful stovepipes. The question that I asked here, and I try to get the execs to talk about it, but they weren't answering it. And I think it's by design. They're not talking about the data. Because again, at the end of the day, with different from Alibaba, again, last week when I was in China, they're very upfront. We're all about data acquisition and using the data to fuel the user experience. That has to traverse across stovepipes. So is Samsung baked in that area? They have things going on. What's your analysis of data traversal across? Is Bixby 2.0 the answer? So companies have to take, particularly consumer companies related to the cloud, have to have one or two paths. The one that says we're not going to mine personal data either sell you products or run ads. So Facebook, AWS, and even Google, that's their business model. And then the other side, you have people like Apple, who are only going to use the data to make the products and experiences better. I think, I'll just pontificate here, the reason you're not getting a straight answer is I don't think they know exactly what they want to do yet. Because look at the market cap of Facebook, Apple, and even AWS is, sorry, Amazon is planning to start and expand their own ad network. So I just don't think they know yet. Now, what I would recommend to them is. Or they might not have visibility on it product wise. So there's knowing what to do, or how to do it versus the product capability. Well, they have access to a ton of data. So if you're using Samsung mail, if you're using, they know every application gets deleted usage models of those applications. So they know a lot more than I think people think. They have a lot more data than people probably give them credit for. Yeah, so they're going to hide the ball. I think they're buying more time. I would agree with you there. All right, question on IoT. You think that hangs together that strategy? Obviously security updates to chip level, that's one thing. Can they succeed with IoT in this emerging stovepipe collapse fabric that they're bringing out? So I need to do a little bit more research on the security and also their scalability. Because if you're going to connect billions of devices, you have to have scalability. We already saw what GE Predix did, right? They didn't about face and partnered up with AWS realizing they just couldn't handle the scale and the complexity. And the second thing is the security model and how things like RM embed cloud and the latest announcements from Intel, which is how from a gateway perspective you secure this work. So I have to go do some research on this. And by the way, it's a moving train. You mentioned the GE thing. Great example. I mean, let's take that from Sam. I got to ask you about cloud because let's talk about Amazon and Cloud Foundry. Cloud Foundry became this thing and Pivotal tried to take it and shape it. Now they're claiming huge success. Some are questioning the numbers. What we mean, they're claiming victory on one hand. I hear record, record, record. But I just don't see any cloud on Cloud Foundry out there. I think the reason is PCF, Pivotal Cloud Foundry is a Fortune 500 thing, right? And if I compare Fortune 500 to startups and other people, there's not nearly as much activity in the Fortune 500 as there is with the startups and the cloud native companies. So I'm often used to- So you're saying Pivotal Cloud is more Fortune 500, less cloud native? Exactly, exactly. How about Amazon? What's your take? I know you are on Power Launch. Now you're on the power of Cube. Our new segment that you just invented by being here. What is the Amazon take? Because that re-invents coming up. What's the preview? Obviously we're going to have some one-on-one with Jassy and the team beforehand. The Cube will be there with two sets. It should come on. If you're going to be there, we'll let that be on. Again, what's the preview for AWS re-invent? Yeah, so AWS, right? They had a seven-year head start at almost everybody. And then Azure and GCP just recently jumped in. And if you notice over the past year, they've been firing cannons at each other. One vendor says, hey, I do buy the minute pricing. And then another one says, oh, I have to buy the second pricing, right? And I'm going to accept VMware. Oh, no, I'm not doing VMware. I'm doing SAP. So what you have now is a feature fast and a fist fight now. AWS is no longer the only man standing here. So what I'm expecting is they are going to come in and make the case that, okay, we still are the best choice, not just for IaaS, but also for Paz, okay? Because they have a lot of competition. And also I think they're going to fill in gaps in some of the regional services where, oh, they don't have GPUs in a certain country. Oh, I don't have FPGAs over here. I think they're going to fill that in to look better against GCP and Azure. I know you cover Intel as well. I was just over there. I saw some of the folks there. I saw some of the Linux Foundation folks. Obviously you're seeing Intel being more of a computing company, not a chip company anymore. They have that 5G end to end. You came on Mobile World Congress, talked a little bit about 5G end to end as big message here at Samsung. How is Intel positioned in all this? What's your take on Intel? Yeah, so I think related to Intel, I think in some areas, they're competitors because they have their own gateway solutions. They don't have cloud solutions, but they have a gateway solutions. Regarding to some of the endpoints, Intel has exited the small cork endpoints in watches. So I would say right now, there's less overlap with Intel now. From Samsung perspective. Exactly, now, on the back end, it's more than likely as a 99% chance that the back end doing the cloud processing is going to be Intel. If I'm Samsung, why wouldn't I want to partner with Samsung? Does it make their own chips? Is that the issue or is it more of? No, I think Samsung up until this point hasn't taken a lot of responsibility for the cloud. So this is a first step and I think it would make a good partnership. And Intel could get the home theater market, the home, I mean, how connected home is, but every CES go back 10 years has been a connected home theme. Finally, they could get it here. That's right. Now I have seen Intel get into things, a lot of Amazon's products with the cameras in the bedroom and in the bathroom, scary stuff, but Movidius silicon that's doing object recognition, that is a place where I think they compete, which frankly, Samsung could develop the silicon, but they just don't have it. Silicon doesn't have capability that a Movidius has that can be used in any type of camera. All right, so final question. I know we got a break here. I appreciate you coming on and making room for your PowerCube segment here in San Francisco. It's SDC 2017 ecosystem. We hear the host of SDC, Thomas Coe, come up and saying, we're going to be honest and transparent to the community here at large in San Francisco and around the globe, kind of incurring that, you know, they've been kind of stove piped and they're going to open up. They believe in open cloud, open IoT and talks about ecosystem. I'm not seeing a lot of ecosystem partners around here. What does Samsung need to do to, well, first of all, what's your letter grade on the ecosystem? And certainly they got an opportunity. What move should they be making to build in a robust, healthy ecosystem because we know you can't do it end to end without support in the white spaces. Yeah, so I go to a lot of the developer conferences, you know, whether it's Microsoft build, Apple, WWDC, and even the enterprise ones. And this is a smaller, low key event. And I think first and foremost, operating system drives a lot of the ecosystem. And other than Tizen, they don't have an operating system. So what they're doing is they're working on the connectedness of it, which is a different kind of ecosystems. It's farther up in the stack. But I think what they can do is they have to be very clear and differentiated. And I think back to our earlier, our first conversation, they're not going to mine the data. Therefore, they're the safe place for you consumer and our smart things ecosystem to put your data. And we're going to help you make money to do that. Because I don't think Google is as interested in that. And I don't think Amazon is as interested in that either. They were clear. They said permission-based. And even if they don't know what their permission is offering, we're going to take the conservative route and protect the data, but they still got to use the data. They got to get their cloud story together. If they want to do the data play, cloud has to be more clear, at least in my mind. Well, I think what they can do is they're sitting on and they will sit on a bigger treasure trove of data that can help their partners deliver better experiences and products. Because if you're at the epicenter and you're at that smart things hub, you know everything that's going on in that home, whether it's your stuff or your partner's stuff. And they got to be trusted and they got to be transparent. Okay, Patrick Moorhead from Moorhead Insights here on theCUBE, great analysts follow him everywhere on Twitter. Your Twitter handle is me, just get the Twitter handle. It's at Patrick Moorhead. Okay, at Patrick Moorhead on Twitter. He travels the world, gets the data, and so does theCUBE, traveled for you. This is John Furrier, more after the short break.