 Live from San Francisco, celebrating 10 years of high-tech coverage, it's theCUBE. Covering VMworld 2019, brought to you by VMware and its ecosystem partners. Okay, welcome back everyone, live CUBE coverage here in San Francisco at VMworld 2019. I'm John Furrier, my co-host, the segment, Stu Miniman. 10 years, Stu, it's been a long run. A lot of CUBE alumni is around. We've got two here on our boardette. Vice President, go to Market Telco Edge Cloud at VMware and last to me, Maniam, Vice President, Product Management, go to Market Edge IoT at VMware. Great to see you, thanks for coming back. Thank you for having us. So I think IoT is going to be a pretty big deal. 5G, the jury's still out on 5G, but it's looking good. Looking Pat Kelsinger says it's going to be great. Yeah. It's probably going to be great. Yeah. What's new? What's the update? Well, just a commentary on 5G, when you say you think it's going to be great. There is some skepticism in the marketplace because if you go back and look at all the different generations of cellular technologies, it's the odd numbers that have never been successful and the even numbers that have from a monetary perspective for the telcos. Interesting thing about 5G is because it's such a system-oriented technology that we do believe that it's going to enable a lot of the capabilities associated with IoT, right? So there's an interdependency between 5G and IoT and 5G that I think is going to make 5G more successful than any of its predecessors. All of us are nerds that geek out on RF and physics. I mean, 5G is a lot of skeptics, but they're deploying 5G. It's not like it's vaporware. There are deployments going on in the United States, certainly outside the United States. So it is real. It's actually happening. The question is what will be the impact of the network effect and what's it going to enable which will certainly impact the industrial IoT and IoT markets? Sure, yeah. Well, so one of the things that's happening with the deployments of 5G isn't just the innovation associated with the spectrum technology of five generations of mobile technology, right? There is an entire transformation happening with the core infrastructure of the telco network. So the, and there's an interdependency there as well, right? So as the telcos software define the infrastructure on which they run all of their services, that then extends all the way through from the cloud to the core to the edge for all of the radio access and everything associated with 5G. And we're also seeing on the IoT side that there's a similar transformation going on. Cause right now, when you look at kind of example manufacturing, right? There's a real siloed, siloed infrastructure, siloed use cases and people are not able to scale. And especially when you start to see the business impact that IoT is actually going to have because most of the data that's being generated is actually being generated from the devices at the edge. And there's a viewpoint that a lot of the workloads that are actually being generated for the enterprise are actually going to be executed at the edge. And when you take those things into consideration it's really important to have an infrastructure that scales. And just like we've seen in other areas where a sprawl of infrastructure is really not going to be effective in terms of delivering business value. That's the same problem that we see here. That brings up a good point. You mentioned systems view. I think this is interesting. I think there's business model innovation as well as the architecture. I mean, you become what you're known for in the old infrastructure. You don't want that legacy to be dictating the new things you mentioned, backhaul. That's a topic that people talk about in the cellular business. You got the radios, you backhaul through a network, go to the core. But now you're getting at something different where if you're going to be backhauling which implies moving packets around, moving data has become a really big problem or concern because the cost to move data, the physics involved, latency is a requirement. Processing at the edge becomes the new architecture. Yeah, I mean, I think the old paradigm was around moving data to the compute but the new paradigm is going to be moving compute to the data, especially on the edge and the IoT. And this is where managing that whole compute infrastructure is going to be really, really important. And that's what the VMware Telco Edge means. Well, we're going to ask Pat Gelsinger a question that riffs off what Dave asked years ago. Stu, I don't remember what year it was. 2012 or 2013, Dave Vellante asked Pat Gelsinger, is security a do-over? And you know Pat's very opinionated. He's like, absolutely do a really risky bold take to say at that time, turns out he was right. The question I want to preview with you guys is, is the architecture a do-over? Because if you think about it, there's new capabilities you mentioned in the systems view. Is there an opportunity, not to throw it away, but like just rethink it, get a second chance at deploying large scale edge cloud versus backhauling through the data center. Maybe you backhaul through the cloud. So to me, it just kind of feels like a do-over. Well, there's very much an opportunity to, I'll say evolve rather than to do-over it because do-over kind of implies everybody's going to throw out everything that they have. But when you think about the beauty of software, is that now we can have inherent security in all of the aspects of the software defined network all the way through the edge. So if you happen to hear Pat's keynote this morning, he put up a slide of all the different security vendors across all of the different types of, the different areas of the clouds, the different cloud technologies, and basically said that there is an opportunity now for us to do for security, basically what we did for compute and networking and storage by software defining that. And so that's the opportunity for security is to leverage all of what you can do with a software defined approach and have security be intrinsic to everything from the cloud to the core to the edge. And specifically for IoT, if you think about, to Lakshmi's comment about pushing the compute to the apps and pushing the compute where the applications are going to be or the user is going to be, I think there's going to be a greater requirement for security actually at the edge than even what we see in the cloud today. Lakshmi, one of the comments we made is if you looked at the keynote this morning, the virtual machine is not the center of the discussion. There's VMware now plays a lot of places where that VM is not at the center. If you can bring us up to speed, when VMware looks at the edge architectures and how they're going to work with enterprises there, what are the solutions that you're going to bring to bear out of the portfolio? Yeah, so we have a, when you think about IoT and there's all these things that are out there, oftentimes when someone installed it in the factory, they didn't even update the factory settings. The threat surface of that is just expansive. And so what we're doing with the product that I'm going to talk about Pulse, we actually lifecycle manage these devices, software updating, making sure that they're compliant with IT kind of security and other requirements. And so what we see is the architecture is we see kind of this managed infrastructure at the device level that then feeds into kind of the thin edge and you heard Pat talk about it this morning, right? Pulse and NSX and VelaCloud for the thin edge and that kind of, it's a continuum really. You can't define, it's a continuum of compute ranging from very small footprint all the way up to our Dell EMC announcement. BMC on Dell EMC, sorry. We actually, we did some original research back when, you know, GE was putting together their industrial internet and one of the biggest stumbling blocks we saw is that huge gap between IT and OT. They don't talk, they talk about the telco, that telco world doesn't tie into the traditional data center world. It's at the edge and some expert comes in and does their piece, but, you know, smashing these worlds together is a real challenge. What's the interest, oh, I'm sorry. I was going to say 5G is the technology that I think is going to create the catalyst for those technologies to come together, right? So you have the enterprise edge, you have the industrial edge, and you have the telco edge. And over time, the more the telcos start pushing compute out to their edge, the enterprise pushed compute out to their edge. And then you have all of these industrial IoT devices. The definition of the edge is going to begin to blur. That's right. I think this is, I think the IoT, industrial IoT is probably the most important tech story of this generation. It doesn't get as much play as AI, because AI is kind of sounds cooler, attracts young kids to be coders, but IoT is really the most important thing because think about the industrial IoT, the threats, cyber threats, cybersecurity, one hole, one hole, and the attacker is in. This is big security and critical. I actually think it's beyond that, because I don't know if you heard Pat talk about his definition of the edge, which is actually that merging of the digital and physical worlds. When you think about that, most of the human problems can be solved by great technology, technology for good. And so you think about industries being pushed to produce more 70% more food with just 5% extra land or carbon emissions. All of these problems, which with good visibility, control, and management can be solved, and that's really what we're trying to do with boss. Yeah, but good intentions, I and Samir Pat's coming from this good marketing on the stage, but the reality is, is when you roll out the tech to make that happen, if you don't have that security intrinsically built in, this means that you got to have the zero trust. But IoT is a different animal on a thin edge than it is say a data center. So it's one of those things where we're watching because there's so many, the surface area is so large. Yeah, and in fact, one of the things that we're doing in terms of incorporating security in the management is looking at hardware root of trust right down to every device that's managed and being able to attest whether something is legitimate or not. So we're rolling all of those things into our technologies. So Pat brought up to Telco early on where we asked some of our guests about the business model on Telco because you know, Telcos have been struggling with their own infrastructure. So when you own infrastructure, it's hard to go out of business unless you actually run out of cash, but they have plenty of work in capital but they got to get their business model. You guys have any thoughts on as Telco starts to modernize, whether they migrate and modernize or modernize and migrate with cloud, what's hopeful things that you can share that's showing business models for Telco because 5G someone's going to pay for it. It's not inexpensive to roll out 5G. So what we're seeing with our Telco customers is that they're finally beginning to realize that they can actually accelerate their time to revenue with new services with a software-defined infrastructure. So I think when first we met, we were in the early stages of developing the market for Telco with software-defined, but we've crossed the chasm now to where we have over 100 discrete Telcos that are in production on our platform. And so we have proof points that says, okay, now they can accelerate time to new revenue. What we're focused on now is helping them extend that out to the edge. And as partners with Lakshmi, we see the Telcos as a route to the enterprise market for our Edge and IoT solutions. So there's an opportunity for Telcos to participate not just in the cloud economy, but the Edge economy. In terms of the business models, the change is driving the business model transformation. The technology is driving business model transformation, but it's an excellent point. It's operating models are transforming, business models are transforming, and interestingly enough, commercial models are transforming as well. Lakshmi, the app side is going to be where the growth is now getting back to the good thing. Once that infrastructure is stable, the apps can come out. So the application development, the microservices, that's kind of, to me, connects that Kubernetes piece to it. That is an opportunity for Telco providers, right? Yeah, absolutely. Again, it's all about deploying and managing applications right at the Edge. And so the infrastructure that we're building with all of the announcements that you heard and the features that we're adding into the product portfolio is really about how do you deploy and manage these applications right down at the device level? And that's really where I think it's going to transform the way people think. A study came out just yesterday that the Edge market is targeted to be a $4.1 trillion market. Yeah, it's going to be huge. Yeah, it's going to be huge. So wondering what you can say about the ecosystem because we've looked, VMware has always had ecosystem but it's many ecosystems and you've got a cloud marketplace and there's lots of different customers. So will some of your existing partners go along with this? Is it building out a new suite when you look at the Edge and IoT? I think there'll be a group of partners that come along for sure. But IoT, especially when you think about industrial IoT, it is a new space of players and we're building that ecosystem and trying to figure out what customers want, right? Because it's an ocean, you could boil it but that may not be the right approach. Yeah, I mean, it's like I said, there's a T on the TAM, huge TAM, it's going to be a huge application boom and IT culture's going to evolve from that perimeter based security to a surface area that's out there that's one light bulb on a factory that's IP enabled, could be a malware entry point it could be something for a worm to get in there. It's really like any device, was there any application? Any device, any cloud. Any cloud, I think in IoT, it's anywhere. Anywhere, exactly. Yeah, totally, totally. And to your very accurate point about the security associated with that, right? And the telcos actually owning that last mile, right? So when we talk about $4.1 trillion of opportunity and the need to develop an ecosystem that can support those edge and IoT solutions, the telcos really are in the cat seat to take advantage of that because they own that last mile of customer access, customer influence, they own the cell towers, right? So as we push compute out to the radio access, telcos have an opportunity to participate. You know, on Array, I want to get your thoughts while you're here, and watch me if you can chime in, that's cool too. I'm doing a big editorial on industrial IoT, national security. This all kind of leads into policy, potential regulation. You know, I mentioned tech for good, tech for bad, it's neutral, how it's shaped. I'm assuming you guys are going to take a shape in some of those conversations. Any thoughts on regulatory things happening because with cybersecurity, cyber war that's happening on our digital turf, the telcos are in prime position to assist and help shape that, you guys can do that. Any thoughts on how you see that, that conversation, anything you'd like to add? So VMware is participating in consortiums associate with those very topics. And of course we are developing technology with an appreciation and understanding respect for the governing agencies across every country as it relates to privacy and security. And so I'm sure, you know, and it varies from country to country, right? In terms of what data you have access to and how you deliver that data and what you do with that data. That's a really hot topic in Washington these days, right? And software helps too. Software does help, right? You have so much flexibility with software but at the same time you have so much risk that you have to prevent. What we've learned is it's really about the individual's information, whether that is a device or an industrial device or an end user or potentially a point of presence. It really does depend on what you do with that data. Who touches the data and where is that data going to be housed, right? And so each of the different countries, each of the different telcos depending on their location are adhering to the governmental requirements for who does what with the data. Yeah, it's interesting. We just did a power panel in our studio where experts come in talking about called the cyber-gedden scenario which is a hacker taking over not just malware and getting pensions with worm and getting access to data but actually taking over physical devices to harm people. So this is kind of a nation threat thing. It's not so much a corporate thing but there is a shaping opportunity here when we're trying to identify where good governance with deletion on policy standpoint, tech are coming together. More and more it's happening. Yeah, and of course we participate very actively here in the US because we're a US headquartered company. We try to participate where we can in some of the other countries for the regulatory agencies and we're part of the World Economic Forum. So through that vehicle, through that consortium we're also trying to influence for good of course. We just recently, we announced this morning that we acquired Juana and Juana is an artificial intelligence machine learning and specific to telco it will observe, analyze and report back on data all the way to the consumer level across a radio access network and the one question we get asked from every telco that we do business with is what do you do with the data, right? And of course we don't do anything with the data in that particular technology. We're observing it but we don't necessarily touch it. But you're exactly right. I think it's something that's going to be a hot topic for a time of a while. It's an opportunity for tech for good. Exactly. Guys, thanks for coming on, sharing your insights. Great to see you again. Thanks for coming on. Great insights, a lot changing and certainly very relevant. The IOT edge, telco, IOT is all happening. AI is part of it. It's theCUBE, live coverage. I'm John from Stu Miniman. We'll be right back after this short break. Thank you.