MWC Barcelona 2024 | Day 1 Analyst Angle

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Shelly Kramer

Tech Analyst

theCUBE Research

Telecom’s tipping point: Monetization, AI and the power of partnership at MWC

It’s clear that the telecom industry stands at a pivotal juncture, with artificial intelligence, 5G and collaboration at the forefront of its evolution.With the potential of AI to revolutionize business models and the emphasis on collaborative efforts to navigate the challenges of monetization and technological integration, the future of telecom appears both challenging and promising. Industry analysis during theCUBE’s opening coverage of this week’s MWC 2024 event in Barcelona shed light on the complexities and opportunities that lie ahead

play_circle_outline AI as a wake-up call for the telecom industry

play_circle_outline User experience and new solutions in healthcare and IoT

play_circle_outline Data as the differentiator and the focus on data value

play_circle_outline The potential winners in the industry (Microsoft, Amazon, Nvidia, etc.)

play_circle_outline Exploring the Evolution of Cloud and AI native Networking: Insights from the HPE and Juniper Deal

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Day 1 Analyst Angle

Shelly Kramer

Tech Analyst theCUBE Research

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(upbeat music)

>> Good morning Nerd Fam and welcome to Barcelona. We're here at Mobile World Congress all week reporting live with "the Cube." My name's Savannah Peterson, joined by the fabulous Shelly Kramer, John Furrier

and Dave Vellante. >> Hey, hey.

>> Thank you so much for being here with me today. I don't know if you all know it is my first MWC.

>> Welcome. >> Wow.

>> Very excited to be here. It is buzzing. The energy is crazy. Dave, I'm going to open up with you. I know you were listening to the keynote. What are we going to hear about all week?

>> Yeah, so a lot of the same story. You've got the telcos are all about connectivity. They spend tons of money on CapEx, and then you have the over the top vendors. I think one of the speakers said the five OTT vendors account for more than 50% of the network traffic. So traffic's going through the roof. Revenues are not, but the CapEx is and that's the conundrum. So the big question, this time around, is can the telco operators actually monetize 5G in a way that they weren't able to with the last wave in mobile? They monetized through connectivity, but everybody else sort of bogarted the network.

>> You had an interesting analogy, John, you talked about some of these companies being glaciers. Do you think we're going to see an acceleration due to the new technology here? Like AI or some of the collaboration?

>> Yeah, I think the big story here from my standpoint is the wake up call that AI has given the industry. And you look at all the news and announcements, Open Gateway, collaboration, kind of a unification theme around, we got to get our act together. There's so much CapEx investment and more coming, where the monetization points that Dave brought up are huge, because now AI is an acceleration on the business model opportunities as well as technology capabilities. So the story here is the speed of what could happen, from a change standpoint, will be significantly different than what we've seen over the past decade. And telecom is known to be, you know, goes very slow and I've called them glaciers move faster than the telecom industry. And so I think that's going to change. I think AI is the wake up call and the opportunity. It presents some challenges, but the opportunities far outweigh the challenges. And I think people are going to wake up and the ability to put together the old technology, back office and edge, with owning their own data will allow the operators and anyone in the telecom business to actually create really good new business models to add on top of the previous business models. So I think it's going to be a huge opportunity, not without its challenges.

>> Yeah, I think you're absolutely right. Shelly, you were here bright and early, listening to the pulse, what do you think we're going to hear this week? What are you most excited about?

>> You know, the funny thing, when you talk about monetization, is this is not a new conversation. We've been talking about monetization for CSPs

for the last kind of five, >> It's kind of fundamental in business in general.

>> Yeah, it is, but it's been a challenge for telcos to figure out how we can help CSPs. How we can monetize it. And so yeah, sure. Now it's AI. But the reality of it is, AI does present some opportunities, it does present some challenges and they got to figure it out. And I think vendors who are able to work with CSPs and help them figure this out. That's the path forward.

>> I mean the thing to watch is the customer experience, because you look at Open Gateway, for instance. Technical issues, they bring the networks together, but you've got to solve the security problems. And also enhance the customer experience. So if you get hacked, that's a bad customer experience, Dave. (Savannah laughing) And nevermind the money that you lose.

>> Shelly: That's, yeah. Highlight.

>> But also the new new opportunities for the users. There's new user expectations around AI seeing all the momentum. And I think that's going to be a big part of the shift is what's in it for the end user and what's the experience like, certainly speed and also latency and also with capability.

>> I think it's also important to point out that these glacial telcos are really good at what they do.

Connectivity actually works. >> Yes, 'cause it's there. And you think about what happened during the pandemic, when so much of the network traffic had to shift back to landlines. They didn't miss a beat. And so as they talk about openness, everybody talks about O-RAN and Open RAN and it's very exciting. But that O-RAN has to perform the same way that these reliable hardened networks have. And that's a big reason why it takes so long in fairness to the telcos.

>> Yeah. I mean we like glaciers. We're all polar bears. We need that. It's good. I'm excited to have that analogy coming through. One of the things for the rest of the week, one of the things that I am noticing and that you're all touching on here is the theme of collaboration. We're entering an era when in terms to accelerate, it's not going to be everyone reinventing the wheel. There's going to be a ton of collaboration, not just in terms of full-stack collaboration, but across multiple different teams pulling into APIs. Are there any interesting colabs that you've seen or that you're expecting to see in this space that we might hear more about at the show? Dave, I'm going to bring it to you.

>> I think the big collaboration is cloud. And it's both the collaboration and it's something that scares the telcos a lot, because again, they got disrupted

by the over-the-top vendors. >> Savannah: Totally.

>> And now here's cloud building out their own networks. And so they're stepping in, but they're doing so, carefully. But the fact is the cloud is going to dominate this business. The cloud operating model is a big wave that's washing over the telco industry. And the market is enormous. When Andy Jassy, John, talks about only 10% of the workloads are in the cloud. He has to be including Telco for that, because we know the traditional IT, it's much higher, but telco's not. And so he's eyeing that opportunity.

>> The partnerships remain critical in this industry. You're going to see that in the ecosystem immediately. I think this year you're going to see a lot of emphasis on partnerships, because the cloud hosting is growing with AI. However, hybrid, Dave, is also growing. If you look at the rise of Nvidia's GPU and now their software stack as well as the GPU clouds that are emerging, they're their own clouds that's going to benefit the telcos because you've got the hybrid model on the implementation. So I think one of the issues here is going to be What are the implementation options for these new architectures around AI? The telcos will be involved. You're going to see on-premise hosting. The grow ups, so new clouds are going to emerge. David Linthicum calls 'em micro clouds. These micro clouds will work with the big public clouds like AWS and Azure. So you're going to see a diversity in hosting options, Dave And I think that's going to be the AI story that no one will talk about in the cloud world, because it's like, "Wait a minute, that's not public cloud. "It's kind of a new cloud." So the super cloud model is emerging, as we had talked about for years. And not exactly like we've said, but kind of the same. Micro clouds are the new clouds. The telcos will reap that opportunity big time.

>> Shelly, what do you think?

>> Well, I don't think we can talk about collaboration without talking about GSMA's Open Gateway.

>> Exactly.

>> And that's all the big news today, right? And so I think there's 47 vendors, John, you mentioned that number earlier. You know, this whole initiative is about supporting CSPs and, you know, stronger, better together. And so I think this is a perfect time to be talking about that. I think we're going to hear a ton, we heard a ton about that already in the morning keynotes. And so I think this is a very cool thing, a cool initiative that will help a lot.

>> Yeah. And I think it's going to matter. I mean, we're going to need to see this collaboration both in terms of regulation and progress and governance when it comes to AI as well as the development of these new projects and stuff that's going on.

>> The thing about the Open Gateway project, Shelly, is that not only does it highlight the partnership conversation in the ecosystem, but it's open source. So the role of open source will be a big factor, Dave, too, in this AI model as LLMs and foundation models growing on the open source, it's going to be interesting to see how the AI development stack emerges. With all the open source. So the Linux Foundation's driving a lot of that Open Gateway activity. But if you've got the 47 operators running in that network, that's over 270 networks. Okay. So now you got open integration that's going to help on security standards, fraud detection. There's a lot of benefits that come from that. So the open source world is coming like a freight train into this world as well, Dave. So it's got open source, you got cloud, you got hybrid.

>> And there's another data angle here too. 'Cause the data is locked inside of these telco stacks today.

And so open data, >> Savannah: Yep. That's a great point.

>> Open data formats are really going to change that. And especially, I mean, we know it's AI, you can't do AI without data. And the data has to be of high quality, it has to be consistent and coherent. And so these open formats are going to evolve such that people, that applications will have access to that data and those applications will be intelligent, because as we've been talking about on the road to intelligent data apps, Shelly, we're layering that AI, that intelligence on top of existing apps. To now create digital representations of our business, people, places and things. There's a whole, whole new wave of innovation coming.

>> Yep, a whole new world.

>> Yeah. There absolutely is. Now we're talking a lot at very high level how this is affecting the telcos and the big companies. One of the things that stood out to me when we were listening to the keynote on our way in this morning, was how all all of these efforts are translating to the user. And I saw big themes around humanity. They were talking about how here in Spain, they actually have bracelets that detect, they're IoT bracelets, that detect if you are experiencing domestic violence and they're able to get you resources and help. Now those are the kind of solutions that I think are going to be incredibly interesting. It's not just going to be high level connectivity and speed and latency like you're talking about. We're going to have new solutions, that actually save lives. In a similar technology, I heard them also mention that they were decreasing maternal mortality using AI as well. So when we, it's,

>> Well and also just think about elder care

and we've got this massive >> Absolutely.

>> Aging population and how we can serve that part of the population in terms of health monitoring and all that.

>> So when everybody talks about AI of course everybody talks about training in the cloud. Jensen, on the earnings call last week talked, he said that at least 40% of NVIDIA's workloads are for inference they're shipments for inference. And so when you talk about like the bracelets and we think about IoT and all these connected devices, those are going to be intelligent and there's going to be inference being done at the edge.

>> Shelly: Yeah, a hundred hundred percent.

>> And collectively, that's massive amounts of computing power. AI will be trained in the cloud and then those models pushed down and then iterated in near real time. I mean, that is a whole new paradigm, sorry to use that word, I feel like we're back in 1999. (all laughing) But it's radically different than how we think about the edge today.

>> And that's the user experience issue we were talking about. That's a new net new experience and a revenue opportunity. Again, back to the health, the edge data use cases, the intelligent edge in smart cities is expanding rapidly. I think, again, AI brings a massive accelerant option to the table and again, I think the telcos are going to reap the benefits, but it's going to be developers, it's going to be the applications that sit on those networks. The next watch, the next wearable device, bracelet, whatever that is, sensor. This is now going to be the realization of edge, intelligent edge, Dave, we've been expecting for a decade.

>> And things like private 5G, the 5G build out. The other really important point is the traditional IT vendors like the Dells, the HPEs, IBM, they've always sold into telco, into telco data centers. But now they are eyeing an opportunity to go after that hardened telco equipment. And it's a multi, it's a trillion dollar opportunity for them. So you're seeing the disaggregation of the telco network, that's where O-RAN comes in. That's where private 5G comes in. And you're seeing a whole spate, to your point about collaboration, a whole spate of either acquisitions, HPE bought Athonet last year, which was a Dell partner. You're seeing other partnerships evolve. You're going to hear more from companies like NTT in these types of partnerships. Red Hat, as you mentioned, is a big player in this whole equation. So the traditional IT vendors, they're sharpening their knives, licking their chops, trying to get into this business in a big way. (all laughing)

>> Yeah. Big time.

>> You're making me hungry. We're here in Spain, tapas. Now I'm ready for lunch already. Thanks a lot, Dave.

>> John: After that dinner last night, I dunno,

>> Great food here.

>> Oh, no, I'm excited. Shelly, are there any standouts to you in this space do you think are going to be clear winners over the next few years?

>> Oh, that's a really tricky question.

>> Savannah: You're a really brilliant person, so I feel you're inclined.

>> You know, I think there's so much opportunity here. I'm not going to point to any one person. I think there's so much opportunity here. I think we've got to see whose glaciers can move more rapidly. And really understand that this is about delivering for CSPs and monetization and also customers, because as you were talking about serving customers, you know, one of the things that occurred to me is customers have no patience. Okay, I'm not going to wait for you to get your act together. If you can't deliver what I'm expecting in an experience, I'm gone.

>> The real winner that I see, Savannah, is data. Not any one company, 'cause it's a rising tide. The data will float all the boats, the data value will become the differentiation. And the telcos own their own data. And the question I've been asking everyone and the telcos and the operators, is that, what are you going to do with the data, net new business model, so the foundation model success in AI is coming fast to data value. Taking that data exhaust as we used to say during the big data days, Dave, and turn it into gold. So I think if the data aspect of it will become a foundation model, 5G will have a model around, I think you're going to start to see AI get infiltrated quickly into the key operational data, user data. And that's going to spin into business model opportunity. And I think that's going to be to me, where the secret sauce will come out of and the winners will emerge that take care of their data in a new way.

>> I'll name some names, but first of all,

>> Hey, thank you. Let's put stakes in the ground.

>> Microsoft is going to be a big winner here, because they've got the massive software estate, they've got the AI play. And they're collaborating with those guys. I think Amazon as well is going to be a big winner. Google is a sort of a distant third in cloud. And they're sort of under attack now with their search franchise. So we'll see how they play. Nvidia is also going to be a big winner.

>> Shelly: Oh, well, absolutely.

>> And now you've got Cisco kind of defending its base, trying to modernize its network, bringing its networking and security business together. So they're an interesting one to watch. And then you've got guys like Arista powering the cloud and you've got these newcomers like Extreme Networks. I said newcomers, they've been around, but still they want to get a piece of that pie. Now HPE and Juniper coming together. And I think a company like Dell is going to do very well in this space. And other companies like Super Micro, some of the ODMs are really going to start to take off. And then you have these specialized telco companies like Rakuten who are going after, Open Dish Networks

is transforming. >> Mavenir.

>> We'll see if they can actually become a player here. Avenir you mentioned.

>> Yeah, Mavenir. Yeah,

>> Mavenir, right?

>> Yeah.

>> The HPE angle's interesting. We're going to have Antonio Neri coming on next, will talk to us. But the Myst portion of the Juniper acquisition points to what I've been saying about the data.

>> Explain that. That's the AI piece.

>> There is an operational infrastructure in all the edge and scenarios where you had old technology or operating technology and IT coming together, the classic OT/IT edge conversation that now has shifted to back office and actually edge itself. So I think what Myst did with Juniper was they used AI to help operate the devices, to be more efficient based on traffic patterns. That is an example of using data and AI to make operational efficiencies come in. That's going to lower costs and increase revenue opportunities. So I think the Myst is a tell sign to where this industry's going where AI will be used as an operational lever. And I think that's going to be where the efficiencies come from, Dave. That's where the user experiences will come from and it'll be interesting to see what investments

>> Savannah: AI has in OS with that.

>> AI in the operating systems themselves. Whether it's the OSS themselves and then what implementation approaches. So GreenLake points to, as a service. Myst points to this. So I think HPE's got a great networking opportunity and I think that's a tell sign of where the industry goes, because that's where the ball moves down the field.

>> So Juniper paid, I think it was 400 million for Myst. It's like the VMware of that world. Okay. So now, HP I think is paying, what is it, 12 or 14 billion for for Juniper? I got to look it up. But somewhere, it's substantial, I think it's 14 billion. A big part of that value is the AI in Myst that HP gets. And now HP's going to bring Aruba and Juniper together and we have Antonio Neri coming on, we're going to ask him about that.

>> John: 14 billion.

>> 14 billion. How it fits into GreenLake. That's a major, major play for HPE.

>> It is totally.

>> Subsequent to the breakup of HP and HPE. HPE has made some tuck-in acquisitions. This is a major transformative move for them. And it's something to watch.

>> I wrote an article on this and it's 14 billion, it's an all cash deal, but the more important thing that I noted was that it signals the shift in the landscape, Dave, between cloud and AI native networking. AI native networking, AI stacks, AI native applications will be the most talked about thing in the next couple years, because we're seeing the beginning of that. We saw cloud native come in and now we're seeing AI native stacks come in. So the HPE, Juniper deal was a shift on cloud and AI native networking. So cloud native moves to AI native. So, edge to cloud really makes sense. And that's a good move for HP. I was really bullish on their deal.

>> Yeah, right?

>> Yeah, I think it's going to be one of many exciting conversations that we're having. Excited that we start the show with that. We've got great guests on all week. I want to talk about hardware for a second. We're talking a lot about software data and AI right now. But we saw the Vision Pro recently came out from Apple. There was actually, I knew I was on my way to MWC, 'cause someone had their Vision Pro on, on my aircraft.

>> Awesome.

>> Which was interesting. Qualcomm just announced something this morning called the XR Hub, which is essentially their competitor, or at least their show car product in this space. That allows you to, that connects any AR glasses to a pocket smartphone situation, which is essentially what Apple did. But what they're trying to do is decouple the battery issues and the weight from that into a mixed experience headset. Do any of you think there's going to be any other cool hardware? We've got Clicks in the keyboard coming on, which, you know, I'm very excited about this morning. So full disclosure, I'm excited about that.

>> When you walk around this show, I've never been to CES, you did CES just recently, but you, you see all these companies that you've never heard of. You'll see robots and there's just amazing things. This IoT explosion is really underscored by some of these cool innovations that are coming. Like I say, they're companies you've never heard of, they're not household names, but they've got big booths so they're obviously doing business. And some really cool activity and robotics and edge devices, as part of the telco network, it's all connected.

>> Yeah. I'm really excited to do a good walk of the show floor. For those of you folks at home who don't have the opportunity to see what we're able to see. This is very similar to CES. We've got tens of thousands, 70,000 people here right now with us and the investment in these booths. This is the entire marketing budget for some of those small companies that you're talking about. (all laughing) for the year.

I mean seriously. >> Believe me, I know.

>> This is their chance to show off, to meet with this global audience, with all of these worldwide thought leaders, as well as buyers. There's a lot of buyers in this room right now, milling around. I see badges flipped over and it's exciting. I mean, it's really exciting. I can't wait to see some of the new stuff that we haven't seen yet. And yeah, I'm just super thrilled with my first MWC.

>> Shelly: Yeah, it's going to be great.

>> This is great. Well, Dave, John, Shelly, I can't wait to interview so many fantastic guests, right here on this beautiful stage. Here, live on "The Cube," in Barcelona. My name's Savannah Peterson. You're watching "the Cube," the leader in enterprise tech. (upbeat music)

Day 1 Analyst Angle

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(upbeat music)

>> Good morning Nerd Fam and welcome to Barcelona. We're here at Mobile World Congress all week reporting live with "the Cube." My name's Savannah Peterson, joined by the fabulous Shelly Kramer, John Furrier

and Dave Vellante. >> Hey, hey.

>> Thank you so much for being here with me today. I don't know if you all know it is my first MWC.

>> Welcome. >> Wow.

>> Very excited to be here. It is buzzing. The energy is crazy. Dave, I'm going to open up with you. I know you were listening to the keynote. What are we going to hear about all week?

>> Yeah, so a lot of the same story. You've got the telcos are all about connectivity. They spend tons of money on CapEx, and then you have the over the top vendors. I think one of the speakers said the five OTT vendors account for more than 50% of the network traffic. So traffic's going through the roof. Revenues are not, but the CapEx is and that's the conundrum. So the big question, this time around, is can the telco operators actually monetize 5G in a way that they weren't able to with the last wave in mobile? They monetized through connectivity, but everybody else sort of bogarted the network.

>> You had an interesting analogy, John, you talked about some of these companies being glaciers. Do you think we're going to see an acceleration due to the new technology here? Like AI or some of the collaboration?

>> Yeah, I think the big story here from my standpoint is the wake up call that AI has given the industry. And you look at all the news and announcements, Open Gateway, collaboration, kind of a unification theme around, we got to get our act together. There's so much CapEx investment and more coming, where the monetization points that Dave brought up are huge, because now AI is an acceleration on the business model opportunities as well as technology capabilities. So the story here is the speed of what could happen, from a change standpoint, will be significantly different than what we've seen over the past decade. And telecom is known to be, you know, goes very slow and I've called them glaciers move faster than the telecom industry. And so I think that's going to change. I think AI is the wake up call and the opportunity. It presents some challenges, but the opportunities far outweigh the challenges. And I think people are going to wake up and the ability to put together the old technology, back office and edge, with owning their own data will allow the operators and anyone in the telecom business to actually create really good new business models to add on top of the previous business models. So I think it's going to be a huge opportunity, not without its challenges.

>> Yeah, I think you're absolutely right. Shelly, you were here bright and early, listening to the pulse, what do you think we're going to hear this week? What are you most excited about?

>> You know, the funny thing, when you talk about monetization, is this is not a new conversation. We've been talking about monetization for CSPs

for the last kind of five, >> It's kind of fundamental in business in general.

>> Yeah, it is, but it's been a challenge for telcos to figure out how we can help CSPs. How we can monetize it. And so yeah, sure. Now it's AI. But the reality of it is, AI does present some opportunities, it does present some challenges and they got to figure it out. And I think vendors who are able to work with CSPs and help them figure this out. That's the path forward.

>> I mean the thing to watch is the customer experience, because you look at Open Gateway, for instance. Technical issues, they bring the networks together, but you've got to solve the security problems. And also enhance the customer experience. So if you get hacked, that's a bad customer experience, Dave. (Savannah laughing) And nevermind the money that you lose.

>> Shelly: That's, yeah. Highlight.

>> But also the new new opportunities for the users. There's new user expectations around AI seeing all the momentum. And I think that's going to be a big part of the shift is what's in it for the end user and what's the experience like, certainly speed and also latency and also with capability.

>> I think it's also important to point out that these glacial telcos are really good at what they do.

Connectivity actually works. >> Yes, 'cause it's there. And you think about what happened during the pandemic, when so much of the network traffic had to shift back to landlines. They didn't miss a beat. And so as they talk about openness, everybody talks about O-RAN and Open RAN and it's very exciting. But that O-RAN has to perform the same way that these reliable hardened networks have. And that's a big reason why it takes so long in fairness to the telcos.

>> Yeah. I mean we like glaciers. We're all polar bears. We need that. It's good. I'm excited to have that analogy coming through. One of the things for the rest of the week, one of the things that I am noticing and that you're all touching on here is the theme of collaboration. We're entering an era when in terms to accelerate, it's not going to be everyone reinventing the wheel. There's going to be a ton of collaboration, not just in terms of full-stack collaboration, but across multiple different teams pulling into APIs. Are there any interesting colabs that you've seen or that you're expecting to see in this space that we might hear more about at the show? Dave, I'm going to bring it to you.

>> I think the big collaboration is cloud. And it's both the collaboration and it's something that scares the telcos a lot, because again, they got disrupted

by the over-the-top vendors. >> Savannah: Totally.

>> And now here's cloud building out their own networks. And so they're stepping in, but they're doing so, carefully. But the fact is the cloud is going to dominate this business. The cloud operating model is a big wave that's washing over the telco industry. And the market is enormous. When Andy Jassy, John, talks about only 10% of the workloads are in the cloud. He has to be including Telco for that, because we know the traditional IT, it's much higher, but telco's not. And so he's eyeing that opportunity.

>> The partnerships remain critical in this industry. You're going to see that in the ecosystem immediately. I think this year you're going to see a lot of emphasis on partnerships, because the cloud hosting is growing with AI. However, hybrid, Dave, is also growing. If you look at the rise of Nvidia's GPU and now their software stack as well as the GPU clouds that are emerging, they're their own clouds that's going to benefit the telcos because you've got the hybrid model on the implementation. So I think one of the issues here is going to be What are the implementation options for these new architectures around AI? The telcos will be involved. You're going to see on-premise hosting. The grow ups, so new clouds are going to emerge. David Linthicum calls 'em micro clouds. These micro clouds will work with the big public clouds like AWS and Azure. So you're going to see a diversity in hosting options, Dave And I think that's going to be the AI story that no one will talk about in the cloud world, because it's like, "Wait a minute, that's not public cloud. "It's kind of a new cloud." So the super cloud model is emerging, as we had talked about for years. And not exactly like we've said, but kind of the same. Micro clouds are the new clouds. The telcos will reap that opportunity big time.

>> Shelly, what do you think?

>> Well, I don't think we can talk about collaboration without talking about GSMA's Open Gateway.

>> Exactly.

>> And that's all the big news today, right? And so I think there's 47 vendors, John, you mentioned that number earlier. You know, this whole initiative is about supporting CSPs and, you know, stronger, better together. And so I think this is a perfect time to be talking about that. I think we're going to hear a ton, we heard a ton about that already in the morning keynotes. And so I think this is a very cool thing, a cool initiative that will help a lot.

>> Yeah. And I think it's going to matter. I mean, we're going to need to see this collaboration both in terms of regulation and progress and governance when it comes to AI as well as the development of these new projects and stuff that's going on.

>> The thing about the Open Gateway project, Shelly, is that not only does it highlight the partnership conversation in the ecosystem, but it's open source. So the role of open source will be a big factor, Dave, too, in this AI model as LLMs and foundation models growing on the open source, it's going to be interesting to see how the AI development stack emerges. With all the open source. So the Linux Foundation's driving a lot of that Open Gateway activity. But if you've got the 47 operators running in that network, that's over 270 networks. Okay. So now you got open integration that's going to help on security standards, fraud detection. There's a lot of benefits that come from that. So the open source world is coming like a freight train into this world as well, Dave. So it's got open source, you got cloud, you got hybrid.

>> And there's another data angle here too. 'Cause the data is locked inside of these telco stacks today.

And so open data, >> Savannah: Yep. That's a great point.

>> Open data formats are really going to change that. And especially, I mean, we know it's AI, you can't do AI without data. And the data has to be of high quality, it has to be consistent and coherent. And so these open formats are going to evolve such that people, that applications will have access to that data and those applications will be intelligent, because as we've been talking about on the road to intelligent data apps, Shelly, we're layering that AI, that intelligence on top of existing apps. To now create digital representations of our business, people, places and things. There's a whole, whole new wave of innovation coming.

>> Yep, a whole new world.

>> Yeah. There absolutely is. Now we're talking a lot at very high level how this is affecting the telcos and the big companies. One of the things that stood out to me when we were listening to the keynote on our way in this morning, was how all all of these efforts are translating to the user. And I saw big themes around humanity. They were talking about how here in Spain, they actually have bracelets that detect, they're IoT bracelets, that detect if you are experiencing domestic violence and they're able to get you resources and help. Now those are the kind of solutions that I think are going to be incredibly interesting. It's not just going to be high level connectivity and speed and latency like you're talking about. We're going to have new solutions, that actually save lives. In a similar technology, I heard them also mention that they were decreasing maternal mortality using AI as well. So when we, it's,

>> Well and also just think about elder care

and we've got this massive >> Absolutely.

>> Aging population and how we can serve that part of the population in terms of health monitoring and all that.

>> So when everybody talks about AI of course everybody talks about training in the cloud. Jensen, on the earnings call last week talked, he said that at least 40% of NVIDIA's workloads are for inference they're shipments for inference. And so when you talk about like the bracelets and we think about IoT and all these connected devices, those are going to be intelligent and there's going to be inference being done at the edge.

>> Shelly: Yeah, a hundred hundred percent.

>> And collectively, that's massive amounts of computing power. AI will be trained in the cloud and then those models pushed down and then iterated in near real time. I mean, that is a whole new paradigm, sorry to use that word, I feel like we're back in 1999. (all laughing) But it's radically different than how we think about the edge today.

>> And that's the user experience issue we were talking about. That's a new net new experience and a revenue opportunity. Again, back to the health, the edge data use cases, the intelligent edge in smart cities is expanding rapidly. I think, again, AI brings a massive accelerant option to the table and again, I think the telcos are going to reap the benefits, but it's going to be developers, it's going to be the applications that sit on those networks. The next watch, the next wearable device, bracelet, whatever that is, sensor. This is now going to be the realization of edge, intelligent edge, Dave, we've been expecting for a decade.

>> And things like private 5G, the 5G build out. The other really important point is the traditional IT vendors like the Dells, the HPEs, IBM, they've always sold into telco, into telco data centers. But now they are eyeing an opportunity to go after that hardened telco equipment. And it's a multi, it's a trillion dollar opportunity for them. So you're seeing the disaggregation of the telco network, that's where O-RAN comes in. That's where private 5G comes in. And you're seeing a whole spate, to your point about collaboration, a whole spate of either acquisitions, HPE bought Athonet last year, which was a Dell partner. You're seeing other partnerships evolve. You're going to hear more from companies like NTT in these types of partnerships. Red Hat, as you mentioned, is a big player in this whole equation. So the traditional IT vendors, they're sharpening their knives, licking their chops, trying to get into this business in a big way. (all laughing)

>> Yeah. Big time.

>> You're making me hungry. We're here in Spain, tapas. Now I'm ready for lunch already. Thanks a lot, Dave.

>> John: After that dinner last night, I dunno,

>> Great food here.

>> Oh, no, I'm excited. Shelly, are there any standouts to you in this space do you think are going to be clear winners over the next few years?

>> Oh, that's a really tricky question.

>> Savannah: You're a really brilliant person, so I feel you're inclined.

>> You know, I think there's so much opportunity here. I'm not going to point to any one person. I think there's so much opportunity here. I think we've got to see whose glaciers can move more rapidly. And really understand that this is about delivering for CSPs and monetization and also customers, because as you were talking about serving customers, you know, one of the things that occurred to me is customers have no patience. Okay, I'm not going to wait for you to get your act together. If you can't deliver what I'm expecting in an experience, I'm gone.

>> The real winner that I see, Savannah, is data. Not any one company, 'cause it's a rising tide. The data will float all the boats, the data value will become the differentiation. And the telcos own their own data. And the question I've been asking everyone and the telcos and the operators, is that, what are you going to do with the data, net new business model, so the foundation model success in AI is coming fast to data value. Taking that data exhaust as we used to say during the big data days, Dave, and turn it into gold. So I think if the data aspect of it will become a foundation model, 5G will have a model around, I think you're going to start to see AI get infiltrated quickly into the key operational data, user data. And that's going to spin into business model opportunity. And I think that's going to be to me, where the secret sauce will come out of and the winners will emerge that take care of their data in a new way.

>> I'll name some names, but first of all,

>> Hey, thank you. Let's put stakes in the ground.

>> Microsoft is going to be a big winner here, because they've got the massive software estate, they've got the AI play. And they're collaborating with those guys. I think Amazon as well is going to be a big winner. Google is a sort of a distant third in cloud. And they're sort of under attack now with their search franchise. So we'll see how they play. Nvidia is also going to be a big winner.

>> Shelly: Oh, well, absolutely.

>> And now you've got Cisco kind of defending its base, trying to modernize its network, bringing its networking and security business together. So they're an interesting one to watch. And then you've got guys like Arista powering the cloud and you've got these newcomers like Extreme Networks. I said newcomers, they've been around, but still they want to get a piece of that pie. Now HPE and Juniper coming together. And I think a company like Dell is going to do very well in this space. And other companies like Super Micro, some of the ODMs are really going to start to take off. And then you have these specialized telco companies like Rakuten who are going after, Open Dish Networks

is transforming. >> Mavenir.

>> We'll see if they can actually become a player here. Avenir you mentioned.

>> Yeah, Mavenir. Yeah,

>> Mavenir, right?

>> Yeah.

>> The HPE angle's interesting. We're going to have Antonio Neri coming on next, will talk to us. But the Myst portion of the Juniper acquisition points to what I've been saying about the data.

>> Explain that. That's the AI piece.

>> There is an operational infrastructure in all the edge and scenarios where you had old technology or operating technology and IT coming together, the classic OT/IT edge conversation that now has shifted to back office and actually edge itself. So I think what Myst did with Juniper was they used AI to help operate the devices, to be more efficient based on traffic patterns. That is an example of using data and AI to make operational efficiencies come in. That's going to lower costs and increase revenue opportunities. So I think the Myst is a tell sign to where this industry's going where AI will be used as an operational lever. And I think that's going to be where the efficiencies come from, Dave. That's where the user experiences will come from and it'll be interesting to see what investments

>> Savannah: AI has in OS with that.

>> AI in the operating systems themselves. Whether it's the OSS themselves and then what implementation approaches. So GreenLake points to, as a service. Myst points to this. So I think HPE's got a great networking opportunity and I think that's a tell sign of where the industry goes, because that's where the ball moves down the field.

>> So Juniper paid, I think it was 400 million for Myst. It's like the VMware of that world. Okay. So now, HP I think is paying, what is it, 12 or 14 billion for for Juniper? I got to look it up. But somewhere, it's substantial, I think it's 14 billion. A big part of that value is the AI in Myst that HP gets. And now HP's going to bring Aruba and Juniper together and we have Antonio Neri coming on, we're going to ask him about that.

>> John: 14 billion.

>> 14 billion. How it fits into GreenLake. That's a major, major play for HPE.

>> It is totally.

>> Subsequent to the breakup of HP and HPE. HPE has made some tuck-in acquisitions. This is a major transformative move for them. And it's something to watch.

>> I wrote an article on this and it's 14 billion, it's an all cash deal, but the more important thing that I noted was that it signals the shift in the landscape, Dave, between cloud and AI native networking. AI native networking, AI stacks, AI native applications will be the most talked about thing in the next couple years, because we're seeing the beginning of that. We saw cloud native come in and now we're seeing AI native stacks come in. So the HPE, Juniper deal was a shift on cloud and AI native networking. So cloud native moves to AI native. So, edge to cloud really makes sense. And that's a good move for HP. I was really bullish on their deal.

>> Yeah, right?

>> Yeah, I think it's going to be one of many exciting conversations that we're having. Excited that we start the show with that. We've got great guests on all week. I want to talk about hardware for a second. We're talking a lot about software data and AI right now. But we saw the Vision Pro recently came out from Apple. There was actually, I knew I was on my way to MWC, 'cause someone had their Vision Pro on, on my aircraft.

>> Awesome.

>> Which was interesting. Qualcomm just announced something this morning called the XR Hub, which is essentially their competitor, or at least their show car product in this space. That allows you to, that connects any AR glasses to a pocket smartphone situation, which is essentially what Apple did. But what they're trying to do is decouple the battery issues and the weight from that into a mixed experience headset. Do any of you think there's going to be any other cool hardware? We've got Clicks in the keyboard coming on, which, you know, I'm very excited about this morning. So full disclosure, I'm excited about that.

>> When you walk around this show, I've never been to CES, you did CES just recently, but you, you see all these companies that you've never heard of. You'll see robots and there's just amazing things. This IoT explosion is really underscored by some of these cool innovations that are coming. Like I say, they're companies you've never heard of, they're not household names, but they've got big booths so they're obviously doing business. And some really cool activity and robotics and edge devices, as part of the telco network, it's all connected.

>> Yeah. I'm really excited to do a good walk of the show floor. For those of you folks at home who don't have the opportunity to see what we're able to see. This is very similar to CES. We've got tens of thousands, 70,000 people here right now with us and the investment in these booths. This is the entire marketing budget for some of those small companies that you're talking about. (all laughing) for the year.

I mean seriously. >> Believe me, I know.

>> This is their chance to show off, to meet with this global audience, with all of these worldwide thought leaders, as well as buyers. There's a lot of buyers in this room right now, milling around. I see badges flipped over and it's exciting. I mean, it's really exciting. I can't wait to see some of the new stuff that we haven't seen yet. And yeah, I'm just super thrilled with my first MWC.

>> Shelly: Yeah, it's going to be great.

>> This is great. Well, Dave, John, Shelly, I can't wait to interview so many fantastic guests, right here on this beautiful stage. Here, live on "The Cube," in Barcelona. My name's Savannah Peterson. You're watching "the Cube," the leader in enterprise tech. (upbeat music)