 Silicon Angle Media presents The Cube. Covering Alibaba Cloud's annual conference. Brought to you by Intel. Now here's John Furrier. Hello everyone, welcome to exclusive coverage from Silicon Angle Wikibon on The Cube here in Hangzhou, China for Alibaba Cloud's annual event here in Cloud City, the whole town is a cloud. It's their event with developers, music festivals, and again The Cube coverage. Our next guest is Deraj Malik, who's the vice president of the data center group and the general manager of innovation, path finding, and architecture group. That's a mouthful, basically the CTO of the data center group trying to figure out the next big thing. That's right John. Thanks for spending the time. It's my pleasure. We're here in China, it's, you know, in the U.S. we're looking at China, we say, okay, the fourth largest cloud, Alibaba Cloud. Yes. Going outside of mainland China, going global. You guys are strategic partners with them. Yes. They need a lot of computing, they need a lot of technology. Is this a path that you're finding for Intel? Yeah, so we've been collaborators with Alibaba for over 10 years, and we view them as a very strategic partner. They're one of the super seven, which is our top seven cloud providers. And certainly in China, they are a very relevant customer for many years. We engage with them on a variety of fronts. On the technology side, we engage with them on what their key pin points are, what is the problems they want to be solving three to five years out, and then we co-develop or co-architect solutions with them. So I want to get your take on the event here in China and how it relates to the global landscape. Because it's my first time here and I was taken back by the booth. I walked through Alibaba's booth and obviously Jack Ma's inspirational Steve Jobs-like of the culture and artistry and science coming together. But I walked through the booth. It's almost too good to be true. They got quantum computing, a patent wall, they got hybrid cloud, they got security. They have IoT examples with the city brain. A lot of great tech here at Alibaba Cloud. So I think the technologies that they're investing in are very, very impressive. Most cloud companies are probably not as far along as them in looking at such a broad range of technologies. The brain project is really exciting because it's going to be the nexus of smart cities, both in China as well as globally. The second thing that's very interesting is their research and investments in quantum. While quantum is not here today, it's certainly on the frontier and Intel also has significant investments in sort of unpacking where quantum will go and what promises it offers to address. What I find interesting is also hearing the positioning by kind of squint through the positioning. They're almost talking cloud-native, DevOps, but they have all this goodness under the hood. And they're kind of talking IT transitioning to data technology. Everything's about data to these guys, not just collecting data, using data with software. Now that's really critical because isn't that software-defined, data-driven is a hot trend? Yes, software-defined and data-driven is a very hot trend. In fact, at Intel, our CEO and us all believe that we've entered the data economy and that the explosion in data is, and the thirst for analyzing that data to be able to drive smart business analytics is really the key to this digital revolution. I was reading an industry report by one of the analysts that said by 2019, there would have been over $100 billion spent on business intelligence. And so the real key is this data economy. The intersection of things, and even industrial Internet AI IoT, industrial IoT, with artificial intelligence, AI, intelligence, Intel inside that word, interesting play on words, is coming together. And we covered what you guys are doing at Mobile World Congress this year, where 5G was clearly an end-to-end architecture. You got FPGAs, all this goodness here going on. So that's 5G and that's going to fuel a lot of IoT and think of it like that way. But now AI, software, how does that connect? So that's the path we see forward on the Wikibon analysts side. We see software eating the world, but data eating software. And now you got 5G creating more data. Yeah, so the way we look at it at Intel is we have data center technologies that are fueled by the growth at the edge by IoT devices because they're creating demand for more processing capability to be able to unpack and analyze that information. And it's a self-fulfilling circle. We call it the virtuous cycle of growth because the data center feeds IoT demand and then IoT feeds the data center. And so it's the combination of those. What 5G does is 5G forms the connectivity fabric between the data center and the edge. It allows data to be pre-positioned at the correct places in the network so that you minimize latencies through the network and can process or do the analytics on it as quickly as you possibly can. So we were talking before we came on camera about Jack Mao. They call him Jackie Mao here. Kino being very inspirational, talking about moving to a new industrial era, a digital economy, all that good stuff, very inspirational. Let's translate that into the data center transformation because we're seeing the data center in the cloud with hybrid cloud become really critical to support what you were just talking about, which is how do you put it all together? It sounds so easy, but it really is difficult. It is, and so our vision is that in order to be able to fulfill this data economy, we will need to have five key innovations in the data center. The first innovation in no particular order is that the data center will be frictionless. And what I mean by frictionless is that there will be zero to low latencies in order to provide that real-time experience at the edge. So latency is extremely critical and the way we believe that that can be achieved is by moving from copper to light. And Intel has significant investments and leadership products in silicon photonics that will enable switches to be based on photonics. It'll enable CPUs and server hosts to be based on light. So we believe that light is a critical aspect to this success. The second aspect of frictionless is the need for liquid cooling and that was in the keynotes from Simon Hu this morning that the liquid cooling is going to be essential to be able to enable a lot more horsepower in these data centers to be able to handle the volume of data that's coming. So you guys obviously with the photonics and the liquid cooling, you guys been working on this in your labs for a long time, straight R and D. But you need the connective tissue because with 5G you're not talking about ubiquitous RF cloud, powering autonomous vehicles, we're seeing the brain project here, ET brain, the city brain, which is essentially IoT and big data, being a big application that they're showcasing. What's the connective tissue? How does that work from the data center to the edge? What's Intel's position? How do you see it? And what's going to unfold in front of our eyes? Yeah, so two things. So number one, I believe that the data center is boundaryless. It's not based on four physical walls. It's a connected link between the data center and all the edge devices that you called IoT. In order to fulfill this, you have to have 5G technology. We're invested in silicon, in radio technologies, as well as in driving the 5G industry and consortia to be able to bring 5G solutions to market. We think that 5G, as well as a tiered architecture between the edge to the center, where you do some processing at the edge, the radio stations, some in intermediate data centers, and then some in the back and cloud data center is what's going to be essential. And Intel has significant investments, both in developing this distributed hierarchical architecture as well as in 5G. That's a great point. I want to just unpack that and double click on it a little bit because you mentioned data at the edge. And you also said earlier, low latency, okay? A lot of people have been talking about it costs you speed and time to move data around. So there's no real one general architecture where you have to kind of decide the architecture for the use case. Yes. So beauty's in the eye of the beholder. Whoever has the workloads or the equipment, how do you look at that? Because now you're thinking about if I don't want to move data around, maybe you shouldn't, maybe you want to move data around. How does that fit with the cloud of model? Because we're seeing cloud being a great use case for IoT in one instance, and maybe not in another. How do you think about that? How should practitioners think about the data architecture? Yeah, so our vision is that the cloud changes from a centralized cloud to a distributed cloud and is amorphous between the edge where the IoT devices are and the back end. And the way to think about it perhaps is to say that storage as people have envisioned it as being centralized, that paradigm has to change and storage has to become distributed such that data is available at different points in the network. And my vision is that you don't want to move data around. You want to minimize data movement for most use cases and you want to have it pre-positioned on the 5G network and you want to move the compute to the data. That's more energy efficient. So I got to ask you, as someone who's doing the pathfinding which is the future path for Intel and innovation and architecture, I was talking with some practitioners recently at another event and trying to find some ones here and I don't speak Chinese very well. But they asked me the same question. It matters what's in my cloud and what they mean by their cloud with their on-premise private cloud that they're putting together, operating model of their business, now going cloud-like. But also as they pick their cloud provider, they want to have multi-cloud and so what's in their cloud and their cloud providers matters? You guys are the inside of the cloud across many spectrums, Intel. Yes. How should a customer think about that question? What's in my cloud? Why should it matter? And it should matter. What's your take on that and what should they look for? Yeah, so my take is that for years we've had the debate of whether it's public cloud or private cloud or on-prem cloud. Our view is that the world is hybrid which is why we are big supporters of Alibaba and the hybrid cloud movement. And as such, if it's hybrid, it sort of suggests that the end state is that there'll be about an equal amount of applications that run on public versus private. And so I think the number of applications have an affinity to moving to the public cloud like mail and then there's other applications that you might care more about the compliance and security that you would say have an affinity to being on-prem. Well, so you mentioned that there's no walls, it's boundary less than the data center. Okay, there's no door, there's no moat. You can't put a firewall on that door. Unlimited access surface area for security. Obviously security hacks are big. We found out today that Israel had hacked and notified the NSA. Hacking is a huge problem. Equifax is going to be another one. How should customers protect themselves? It's a very fair question, John. This is one of the side effects of saying that the data center will be boundary less. We now have to have security technologies that can, we've effectively expanded the attack surface for security in a significant way. But I don't think the answer is to say we need to move backwards and not adopt this boundary list cloud. I think we want to adopt it and we want to develop technology. So at Intel we're developing multiple isolation technologies that allow different VM and container tenants to be isolated from other tenants. And this is your point earlier, making the device more intelligent, whether that's more onboard memory and more chips. Yes. That's what you were kind of referring to. Is that right? That's correct. Okay, great. So I want to get one kind of off the wall question since I have you on here. It's just a brain trust here from Intel, which is great to have them here. Distributed computing, we've been around for a while. We know all about that. Network effects, distributed computing, the computer industry. But now we're seeing a trend with decentralization. Blockchain is one shiny example. Russia just banned cryptocurrency. This poses an architectural challenge. What's your thoughts on the decentralization and distributed architectures that are emerging? Opportunities, scary? How should customers think about decentralization? Well, certainly there's a security challenge as we just spoke related to this. But I think the computer industry has oscillated depending on the era and the needs between centralized and decentralized a number of times now. And we're going through an era where decentralization makes sense because we expect 30 to 50 billion devices at the edge. And so you can't handle that with the centralized model primarily due to three reasons. Number one, just moving that volume of data would be very expensive to do over the network. Second, there'll be a number of applications that are latency sensitive. And third, you might care about data federation and crossing country boundaries in a number of cases. So I think for the use case that we have with IoT, we have to adopt decentralized and distributed. So if the brain is processing in data and you've got plenty of it at Intel with more compute power, what's the central nervous system, the metadata? Well, actually look at the central nervous system as the 5G distributed network that enables the end points or the nerve endings if you will to be connected to the spinal cord. Okay, so final question for you. I really appreciate you spending the time. Sure, pleasure. Intel's been a wave company in its generation. It's obviously more law. It's not well documented. It seems that Moore's Laws every year, some journalist claims Moore's Laws dead and then it never goes away. So we expect more and more innovation coming from Intel. You guys have surfed many waves. In your opinion, what waves are coming? Because it feels like the waves are big now, but a lot of people think that there's bigger waves coming. That the big waves set is coming in. What's the technology wave that you're looking at from a path-finding innovation standpoint that customers should look for, maybe prepare for? Could be further out coming in. What's the big wave coming? And I was seeing these things. What's your focus on that? So a number of them, I think distributed computing is not a solved problem yet, but certainly it needs to be solved to be able to address these endpoint challenges. Another great example I think is around visual computing. So in the past, most of the type of data that people handled was textual, but that's moving to visual very rapidly. And there's so many examples. You brought up the city brain project as an example, but video and analyzing images requires a different kind of art, different compression techniques. If a human doesn't need to see it, you perhaps don't have to have as high a resolution. And so there's a number of shifts in the assumption space. And so I think for me, visual computing is a great opportunity, as well as a wave, that's coming at us. And the software too. So final question, final, final question. Ali Baba here are connecting the dots. You can see where it's going. How do you see the cloud service provider opportunity? Because obviously there are cloud service providers on paper, but they're big. They're a native cloud now, like with the big guys like Amazon, Google, Microsoft. But we're seeing an emergence of new class of cloud service providers. Certainly our research is showing that what was a very thin neck in the power laws is now expanding into a much bigger range, where vars and valuated software developers are going to start doing their own cloud-like solutions with the native clouds, because they need horizontally scalable data infrastructure, connective tissue and edge devices from Intel, but they're going to provide software expertise that's vertically specialized. Whether it's traffic, IoT, or oil and gas, or financial, fintech. The specialism of application developers combined with horizontally scalable cloud, it seems like a renaissance in the cloud service provider market. Do you see that as well, and how should the industry think about this potential renaissance? So I think there's two possibilities. One is for the vast majority of functions that people run in the public cloud, I think one possibility is that there's a consolidation amongst a few players. But I think your point's a very good one that there are specialized services that companies are able to provide, where they're able to carve out a niche and become a cloud provider for that particular set of functions, as well as there's a second reason that motivates regional cloud providers to succeed. Again, because of data federation requirements, as well as local proximity to the endpoints, I think these two phenomena are likely to drive the emergence of regional clouds, as well as specialized clouds, like you described to perform certain functions. And potentially a new kind of ecosystem development. Yes. And you guys are all about ecosystem, so is Alibaba. That's right. You guys, thanks so much for coming on theCUBE. This is exclusive CUBE coverage with SiliconANGLE and Wikibon here in China with Intel's Boothier, talking about AI and the future of the data center in cloud. I'm John Furrier, thanks for watching.