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Tag: Pat Gelsinger

  • Intel Scores Amazon and Qualcomm as Foundry Clients

    Intel Scores Amazon and Qualcomm as Foundry Clients

    Intel has scored a big win in its efforts to rebuild its semiconductor manufacturing, with Qualcomm and Amazon set to use its foundries.

    New CEO Pat Gelsinger is determined to reverse Intel’s recent fortunes, and is betting big on the company doubling down on its own manufacturing. The company made headlines when it announced plans to build two foundries in Arizona, to the tune of $20 billion. Intel has also been rumored to be trying to buy GlobalFoundries.

    According to Reuters, Intel has scored a major win, with Amazon and Qualcomm set to use the company’s new foundries. Qualcomm, in particular, will use Intel’s 20A chipmaking process, ideal for the company’s mobile chips.

    Intel is clearly intent on gaining ground against TSMC, which has long-since eclipsed Intel and poached major customers, such as Apple. The company sees close partnerships with the likes of Amazon and Qualcomm as a key component of that goal.

    “There have been many, many hours of deep and technical engagement with these first two customers, and many others,” Gelsinger said.

  • Intel Beats Expectations on Q2 Results

    Intel Beats Expectations on Q2 Results

    Intel reported its Q2 results, beating expectations on strong semiconductor demand.

    Intel reported GAAP $19.6 billion in revenue for the second quarter, coming in at $1.24 per share. Much of the revenue was the result of a 33% year-over-year increase in PC platform volumes.

    The company also raised its full-year 2021 guidance to $77.6 billion GAAP, and $73.5 billion non-GAAP. This is an increase of $1 billion over original guidance.

    “There’s never been a more exciting time to be in the semiconductor industry. The digitization of everything continues to accelerate, creating a vast growth opportunity for us and our customers across core and emerging business areas. With our scale and renewed focus on both innovation and execution, we are uniquely positioned to capitalize on this opportunity, which I believe is merely the beginning of what will be a decade of sustained growth across the industry,” said Pat Gelsinger, Intel CEO. “Our second-quarter results show that our momentum is building, our execution is improving, and customers continue to choose us for leadership products.”

    The company still has many challenges ahead, not the least of which is the semiconductor component shortage.

  • Intel CEO: Semiconductor Shortage Could Last Several Years

    Intel CEO: Semiconductor Shortage Could Last Several Years

    Intel CEO Pat Gelsinger has reiterated the company’s view that the semiconductor shortage could last several years.

    Semiconductors are in short supply, thanks to the pandemic and resulting, complicating factors. Production was initially hurt as a result of lockdowns, and demand has been up significantly as more people rely on laptops and tablets for remote work. Gaming and cryptocurrency mining has also strained supply.

    Two months ago, Gelsinger said the shortage would last for another couple of years. According to Reuters, Gelsinger is now saying it could take a couple of years just to address shortages in foundry capacity and components.

    “But while the industry has taken steps to address near term constraints it could still take a couple of years for the ecosystem to address shortages of foundry capacity, substrates and components,” Gelsinger said in a virtual session at the Computex trade show in Taipei.

    Gelsinger also credited the transition to remote work and remote learning as one of the single biggest drivers, saying it had led to a “cycle of explosive growth in semiconductors” that has placed huge strain on global supply chains.”

  • Intel CEO: Global Semiconductor Shortage Will Last a Couple of Years

    Intel CEO: Global Semiconductor Shortage Will Last a Couple of Years

    Intel CEO Pat Gelsinger has weighed in on the global semiconductor shortage, and it’s not good news for those wanting a quick fix.

    The semiconductor industry is experiencing a massive shortage amid skyrocketing demand. Automakers have been forced to shut down factories, or ship trucks without all of the fuel management chips they would normally have. Apple is rumored to be pushing back some production as a result of the shortage, and NVIDIA recently announced it would continue to struggle with demand through the rest of the year.

    In an interview with The Washington Post, Gelsinger said the shortage would likely last for a couple more years. Intel is working to help automotive chipmakers use the company’s factories to boost supply, but that isn’t a quick fix.

    “We do believe we have the ability to help,” said Gelsinger. But “I think this is a couple of years until you are totally able to address it,” he said. “It just takes a couple of years to build capacity.”

    Intel has warned that it would be six to nine months before its factories would deliver the first chips aimed at the automotive industry.

    “That in no way addresses all of it, but every little bit helps. We can help alleviate some pressure,” added Gelsinger.

  • Intel Plans to Make Chips for the Auto Industry

    Intel Plans to Make Chips for the Auto Industry

    Intel is planning to make chips for the auto industry, with the first chips being made in the next six to nine months.

    The auto industry has been hit especially hard by the global chip shortage, resulting in shutdowns and slowed production. GM has even resorted to shipping trucks without their full complement of fuel management chips, leading the 2021 models to get 1 MPG less than they should.

    Intel is hoping to help alleviate that shortage, and is in talks with auto chip makers to use the company’s factories for production. The company had previously announced plans to open two chip factories in Arizona, with plans to use them for manufacturing semiconductors for its clients.

    According to Reuters, Intel is not waiting for the new factories to be opened, and will dedicate some of its existing factory resources — specifically in Oregon, Arizona, New Mexico, Israel and Ireland — to helping the auto industry.

    “We’re hoping that some of these things can be alleviated, not requiring a three- or four-year factory build, but maybe six months of new products being certified on some of our existing processes,” CEO Pat Gelsinger said. “We’ve begun those engagements already with some of the key components suppliers.”

    Given the Biden administration’s focus on easing the semiconductor crisis, Intel will likely have whatever support it needs to make its plans a reality.

  • Intel CEO Wants Apple Back As a Customer

    Intel CEO Wants Apple Back As a Customer

    Intel CEO Pat Gelsinger has his sights set on regaining Apple as a customer, thanks to Intel’s planned factories in Arizona.

    Apple made headlines when it announced it would be transitioning its Mac platform to its own custom silicon, based on Arm designs. Previously, Apple used its own custom silicon in iPhone and iPads, but relied on Intel’s chips for its Mac computers.

    Unfortunately for Intel, the company was no longer able to meet Apple’s needs. Intel’s chips increasingly started falling behind rival AMD’s semiconductors, and failed to keep up with the power savings and performance Apple was able to achieve with its custom silicon.

    To make matters worse, Intel had some high-profile issues with quality control. In fact, according to former Intel engineer François Piednoël, at one point Apple was finding almost as many bugs in Intel’s chips as Intel’s own team — not a good way to convince a company to stay with your products.

    “The quality assurance of Skylake was more than a problem … It was abnormally bad,” said Piednoël. “We were getting way too much citing for little things inside Skylake. Basically our buddies at Apple became the number one filer of problems in the architecture. And that went really, really bad. When your customer starts finding almost as much bugs as you found yourself, you’re not leading into the right place.”

    Despite losing Apple, Gelsinger is intent on getting them back, if not as a customer of Intel’s in-house chips, then as a manufacturing customer.

    Intel’s new factories are being built in Arizona with the goal of challenging TSMC, the company Apple currently uses to manufacture its chips, and bring more semiconductor manufacturing to the US. As a result, Intel is positioning itself as an alternative manufacturing partner, giving companies like Apple, Qualcomm, Nokia and Microsoft another option and a way to diversify their supply chain.

    In an interview with Yahoo Finance, Gelsinger laid out his hope.

    Apple is a customer, and I hope to make them a big foundry customer because today they’re wholly dependent on Taiwan Semiconductor. We want to present great options for them to leverage our foundry services, as well, just like we’re working with Qualcomm and Microsoft to leverage our foundry. We’re going to be delivering great technology, some things that can’t be done anywhere else in the world.

    In an interview with BBC News, Gelsinger emphasized it wouldn’t be an easy sell, and Intel would have to demonstrate that it could successfully meet customers’ needs.

    Everybody wants multiple suppliers. So we think there’s very real potential. But I have to earn that business. I have to be able to go to my competitors and be able to say: “I want you to become my customer.”

    And that also includes Nvidia, Qualcomm and Broadcom, in addition to Microsoft and IBM. I want all of them to say: “I need more technology… and I trust that Intel is going to become one of my key suppliers.”

    And that includes Apple as one of the biggest users of advanced semiconductor capabilities.

    Gelsinger certainly doesn’t lack for ambition in his efforts to turn Intel’s fortunes around. It remains to be seen if he and Intel can deliver the goods.

  • Intel Investing $20 Billion to Build Two Arizona Plants

    Intel Investing $20 Billion to Build Two Arizona Plants

    Intel has announced it is investing $20 billion to build two new chip factories in Arizona.

    Intel is in the process of trying to turn its business around, after several years of setbacks. The company has dealt with supply issues, quality control issues, security bugs and losing Apple, one of its biggest customers. The company is even outsourcing some of its chip production.

    The company’s turnaround began with a new CEO. VMware’s Pat Gelsinger replaced Bob Swan, and began aggressively working to help the company regain its former glory.

    As part of Intel’s latest initiative, Gelsinger announced plans to build two new factories in Arizona.

    “We are setting a course for a new era of innovation and product leadership at Intel,” said Gelsinger. “Intel is the only company with the depth and breadth of software, silicon and platforms, packaging, and process with at-scale manufacturing customers can depend on for their next-generation innovations. IDM 2.0 is an elegant strategy that only Intel can deliver – and it’s a winning formula. We will use it to design the best products and manufacture them in the best way possible for every category we compete in.”

    The company’s plans will result in thousands of jobs, and make a significant contribution to the local economy.

    This build-out represents an investment of approximately $20 billion, which is expected to create over 3,000 permanent high-tech, high-wage jobs; over 3,000 construction jobs; and approximately 15,000 local long-term jobs. Today, Arizona Gov. Doug Ducey and U.S. Secretary of Commerce Gina Raimondo participated with Intel executives in the announcement. Gelsinger commented: “We are excited to be partnering with the state of Arizona and the Biden administration on incentives that spur this type of domestic investment.” Intel expects to accelerate capital investments beyond Arizona, and Gelsinger said he plans to announce the next phase of capacity expansions in the U.S., Europe and other global locations within the year.

    It remains to be seen if Intel can undo its recent setbacks, but today’s announcement is a step in the right direction.

  • Intel Outsources i3 to TSMC

    Intel Outsources i3 to TSMC

    Intel has decided to outsource its i3 processors to TSMC, after considering such a move for months.

    Intel has fallen on hard times in recent years, being eclipsed by its long-time rival AMD, as well as Apple’s switch to its own, ARM-based, custom silicon. The company has dealt with security flaws, production bugs and supply issues. Most recently, it was announced that Pat Gelsinger would replace Bob Swan as CEO.

    One of the biggest indications of Intel’s troubles was its willingness to consider outsourcing its processor manufacturing. While Intel has outsourced non-CPU chips for some time, this step would have never been an option years ago.

    It appears Intel has moved forward, with plans to outsource its i3 production to TSMC in 2021, before moving its high-end chips over in 2022, according to TrendForce.

    While the company is planning to kick off mass production of Core i3 CPUs at TSMC’s 5nm node in 2H21, Intel’s mid-range and high-end CPUs are projected to enter mass production using TSMC’s 3nm node in 2H22.

    TrendForce believes the move will allow Intel to reserve its own in-house production for its most profitable, high-end chips.

  • Intel’s CEO-To-Be Takes Shots At Apple

    Intel’s CEO-To-Be Takes Shots At Apple

    Intel’s soon-to-be CEO is already taking shots at Apple, as the new M1 Macs offer significant advantages over Intel-based machines.

    Intel made headlines Wednesday when it announced Intel alum and VMware CEO Pat Gelsinger would replace Bob Swan as CEO. The change comes at a time when Intel is facing pressure and challenges on all sides. Intel is clearly hoping that Gelsinger has the expertise and experience to turn things around.

    While Gelsinger isn’t slated to take over the reigns at Intel until February 15, that hasn’t stopped him from challenging Intel to beat Apple in the processor race.

    According to The Oregonian, Gelsinger made his comments at an all-hands meeting on Thursday.

    We have to deliver better products to the PC ecosystem than any possible thing that a lifestyle company in Cupertino. We have to be that good, in the future.

    Only time will tell if Intel can live up to Gelsinger’s aspirations. Either way, he’s definitely giving the company something to shoot for.

  • VMware’s Pat Gelsinger to Replace Bob Swan as Intel CEO

    VMware’s Pat Gelsinger to Replace Bob Swan as Intel CEO

    Intel has announced VMware CEO Pat Gelsinger will replace Bob Swan as CEO, effective February 15.

    Intel has been struggling in recent years, facing a host of problems. It has witnessed the rise of Arm-based chips, used in everything from phones to computers. AMD, a rival that historically has lagged behind Intel, has been resurgent, releasing chips that have challenged Intel’s core business. In addition to external threats, the company has faced internal problems, including the loss of leading chip engineers, “unfixable” security issues and ongoing production problems.

    Intel’s troubles even lead the Third Point hedge fund to pen a letter to Intel, demanding changes to address the problems. Swan indicated a willingness to work with Third Point on potential solutions.

    Intel has now announced a change in its top leadership, bringing Gelsinger onboard to replace Swan. Gelsinger is widely seen as one of the best choices to lead the company. He is a 30-year Intel veteran, giving him invaluable experience and insight into company culture. Most recently, he has served as CEO of VMware since 2012, leading that company to some of its greatest successes.

    “Pat is a proven technology leader with a distinguished track record of innovation, talent development, and a deep knowledge of Intel. He will continue a values-based cultural leadership approach with a hyper focus on operational execution,” said Omar Ishrak, independent chairman of the Intel board. “After careful consideration, the board concluded that now is the right time to make this leadership change to draw on Pat’s technology and engineering expertise during this critical period of transformation at Intel. The board is confident that Pat, together with the rest of the leadership team, will ensure strong execution of Intel’s strategy to build on its product leadership and take advantage of the significant opportunities ahead as it continues to transform from a CPU to a multi-architecture XPU company.”

    “I am thrilled to rejoin and lead Intel forward at this important time for the company, our industry and our nation,” said Gelsinger. “Having begun my career at Intel and learned at the feet of Grove, Noyce and Moore, it’s my privilege and honor to return in this leadership capacity. I have tremendous regard for the company’s rich history and powerful technologies that have created the world’s digital infrastructure. I believe Intel has significant potential to continue to reshape the future of technology and look forward to working with the incredibly talented global Intel team to accelerate innovation and create value for our customers and shareholders.”

    Gelsinger has a big challenge ahead of him, as he tries to turn things around at the beleaguered chipmaker. It remains to be seen if he will be successful, although he certainly has the background and experience to have a fighting chance.

  • VMware Posts Q3 Results, Beats Estimates

    VMware Posts Q3 Results, Beats Estimates

    Dell Technologies’ VMware posted its third-quarter results, beating estimates on strong subscription and SaaS growth.

    VMware is a leading virtualization software company, with its software in use by many of the biggest organizations in the world. The company’s software is also seeing widespread use in cloud infrastructure, with many telcos relying on it to help speed up 5G deployment.

    The company has reported its Q3 results, beating consensus estimates on $2.86 billion in revenue. Subscription, SaaS and license revenue accounted for $1.32 billion, an increase of 10% from the year-ago quarter. The subscription and SaaS revenue alone was $676 million, a 44% increase over the year-ago quarter.

    “Q3 was another good quarter for VMware, and we’re pleased with our results,” commented Pat Gelsinger, CEO, VMware. “As customers navigate through these unprecedented times, our focus remains on delivering the digital foundation for an unpredictable world. We continue to shape the future in areas that are top priority for every business–from app development to multi-cloud to security and digital workspaces.”

    “Subscription and SaaS revenue increased 44% year-over-year in Q3 and surpassed license revenue for the first time,” said Zane Rowe, executive vice president and CFO, VMware. “VMware will continue to invest in and focus on further expanding our Subscription and SaaS portfolio, which we believe will drive company growth, customer satisfaction and shareholder value.”

  • Digital Transformation Is More Important Than Ever, Says VMware CEO

    Digital Transformation Is More Important Than Ever, Says VMware CEO

    “In this environment, digital transformation is more important than ever,” says VMware CEO Pat Gelsinger. “If you think of it only a few percentages of employees worked from home before this (pandemic). Now it’s 97 percent. Given the length and challenges that people faced this doesn’t go away.”

    Pat Gelsinger, CEO of VMware, discusses how the pandemic has accelerated digital transformation and dramatically increased the work from home trend for enterprise companies:

    Digital Transformation Is More Important Than Ever

    In this environment, digital transformation is more important than ever. If you think of it only a few percentages of employees worked from home before this (pandemic). Now it’s 97 percent. Given the length and challenges that people faced this doesn’t go away. We are going to be here for the next two years where the majority of workforces, a substantial portion, are going to be work from home distributed workforce.

    In the face of that IT and technology are more important not less. Sometimes it takes a decade to make a week of progress and sometimes a week gives you a decade of progress. All of a sudden, education, healthcare, and work from home are making huge steps forward. That’s what gives us the view that long-term tech is going to be stronger and software and cloud will be stronger yet than the overall economic environment.

    Work From Home Is The New Normal

    For VMWare, we were 20 percent work from home. I expect as we continue in this environment we will end up in at 50 to 60 percent over time. I don’t think we are atypical. We’re doubling and tripling the amount of work from home. When you think about that distributed workforce, essentially you go from 100 or 200 sites depending on the size of your company to 10,000 or 20,000 sites.

    When you think about every home becoming a new worksite they need to be managed, connected, and productive. They need to be secure. They need good quality and bandwidth. Then they need capacity. That’s where VMWare cloud comes in. That’s our business continuity focus for the future.

    We don’t see ourselves as atypical here. This is the new normal. We’re excited to see these transformations happening across the industry and we’re making good progress with customers around the globe.

    Every CIO Is Adjusting Their Priorities

    We used to generate new projects with POC’s and being face to face with customers. The salesmen always liked to shoulder up with the potential customer. We have to make adjustments. Every CIO is also adjusting their priorities due to this radical shift of a distributed workforce and the new demands that are being placed on them.

    Digital Transformation Is More Important Than Ever, Says VMWare CEO Pat Gelsinger
  • Bitcoin is Bad, Blockchain Is Revolutionizing, Says VMware CEO

    Bitcoin is Bad, Blockchain Is Revolutionizing, Says VMware CEO

    “Bitcoin as its implemented and implementation of blockchain and distributed ledger I assert is bad,” says VMware CEO Pat Gelsinger. “Its purpose is almost all illicit and it’s an environmental crisis. This is a terrible implementation of blockchain. I’m not saying that blockchain is bad. I think it is revolutionizing. This is breakthrough innovative technology and how you do distributed secured trust. That’s powerful. We are huge believers strongly committed to blockchain and distributed leverage technology.”

    Pat Gelsinger, CEO of VMware, says that Bitcoin is bad, but blockchain, when done right, is revolutionizing in an interview with theCUBE at VMworld 2019 in San Francisco. 

    Bitcoin is Bad, Blockchain Is Revolutionizing

    The idea of distributed ledger technology, immutable distributed trust, I’ve said I think of that, and blockchain is the underlying technology, as almost like public-private key encryption. If we go back 40 years before RSA it’s that important. This is breakthrough innovative technology and how you do distributed secured trust. That’s powerful. We are huge believers strongly committed to blockchain and distributed leverage technology. Why do I make my comments like I do on Bitcoin? Bitcoin as its implemented and implementation of blockchain and distributed ledger I assert is bad. It’s bad for two reasons. 

    One is it’s an environmental crisis. A single ledger if you and I transacted a penny I would consume enough energy to power your house for half a day. It’s incredible. This is a terrible implementation of blockchain. Secondly, the way it’s also done as well in this totally unregulated environment, almost all of its uses are for illicit and criminal purposes. That’s who’s trading in Bitcoin. So its purpose is almost all illicit and it’s an environmental crisis. I say bad. I’m not saying that blockchain is bad. I think it is revolutionizing. Studies have shown that over 95 percent of the uses of Bitcoin is criminal. Let’s go make it good. Do good engineering and engineer for good.

    Partnership With Australian Stock Exchange and Digital Asset

    We just announced on Sunday a partnership with the Australian Stock Exchange and Digital Asset. They’re leveraging the VMWare distributed ledger technology as part of their go-forward strategy for the stock exchange in Australia. That’s good. We’re making it suitable for enterprises meeting the regulatory requirements and we’re order plus magnitude better in terms of performance and energy consumption and we’re just getting started.

    Bitcoin is Bad, Blockchain Is Revolutionizing, Says VMware CEO Pat Gelsinger
  • VMware Is Now a Platform For Digital Transformation, Says CEO

    VMware Is Now a Platform For Digital Transformation, Says CEO

    “We believe that our conversations now have gone from targeted to holistic to be this platform for their digital transformation,” says VMware CEO Pat Gelsinger. “That core idea of how do they get to that digital future, that’s not an IT discussion anymore, that’s a business strategy conversation. That’s why we are seeing this real uplift in the position in the conversation that we are having with customers globally.”

    Pat Gelsinger, CEO of VMware, discusses how VMware has become a complete digital transformation platform for companies in an interview on CNBC:

    VMware Is Now a Platform For Digital Transformation

    We believe that our conversations now as we’ve expanded from selling compute Hypervisor to a complete cloud infrastructure, complete end-user computing, a transformation of their network and security offerings, our conversations have gone from targeted to holistic to be this platform for their digital transformation. That core idea of how do they get to that digital future, that’s not an IT discussion anymore, that’s a business strategy conversation.

    That’s why we are seeing this real uplift in the position in the conversation that we are having with customers globally. As we’ve positioned in the past, as people move to the full VMware offering that is a multiplier. A company or an institution that is using us as a Hypervisor, now the full cloud stack of network, compute, management, and automation, that is a business expansion opportunity for us.

    VMware Seeking Ability To Be a Government Cloud Provider

    As I said on the (earnings) call we are now in the FedRAMP High process. We are seeking that ability to be a cloud provider for the government and many of the government. Many of the government in defense and intelligence are big VMware footprints. We see this as a great opportunity. We are in process to get approval. As the JEDI contract gets resolved we hope to be able to be positioned with Amazon and Azure, given our relationships with both.

    Even as our preferred relationship with Amazon is very strong we do see this ability for us to participate for government business being an essential element of our multi-cloud strategy where Amazon, Azure, IBM, and our other cloud partners all give us a great opportunity to participate for government contracts.

    VMware Is Now a Platform For Digital Transformation, Says CEO Pat Gelsinger
  • There’s This Explosion of Innovation, Says VMware CEO

    There’s This Explosion of Innovation, Says VMware CEO

    “There’s this explosion of innovation that’s going on,” says VMware CEO Pat Gelsinger. “I’ve called it the four superpowers; cloud, mobility, AI, and IoT. These are just causing so many new companies, investment of capital, major new IPOs that are going on. I think with each sort of wave of these innovative cycles there’s an explosion of new companies, but then there’s also a consolidation of existing companies.”

    Pat Gelsinger, CEO of VMware, and Michael Dell, founder and CEO of Dell, discuss the explosion of innovation that is going on in tech in an interview on CNBC:

    There’s This Explosion of Innovation, Says VMware CEO

    There’s this explosion of innovation that’s going on. I’ve called it the four superpowers; cloud, mobility, AI, and IOT. These are just causing so many new companies, investment of capital, major new IPOs that are going on. I think with each sort of wave of these innovative cycles there’s an explosion of new companies, but then there’s also a consolidation of existing companies. All of the layers start to reform. Up here you’ve got a whole new set of them emerging in many of these areas and in the existing areas there is some level of consolidation. I do believe there will be some because fundamentally at the infrastructure layer I believe customers want fewer more strategic vendors.

    As I talk to CIOs I say my job is every one of your engineers is looking down the stack at infrastructure I want to enable you to have them look up to the application and business differentiating services. We’re increasingly going to automate, standardized, and cloud deliver those infrastructure layers so you don’t have to do it. We’re doing it for you in an automated AI standardized way so every one of your resources gets to look up to create business differentiating services. So yes I believe both of those will be true consolidation and explosion of innovation.

    Customers Don’t Want to be Systems Integrators, Says Michael Dell

    Well, certainly the combination of Dell, EMC, VMware, and Pivotal was the biggest ones (consolidations) yet to date. That was a pretty big one and last year we added more than $11 billion in revenue so that was some additional industry consolidation there for you. I think customers to Pat’s point have told us very clearly they don’t want to be systems integrators anymore. They’re looking for fewer partners. Bringing together a broad set of capabilities across the infrastructure, security, client devices, the cloud, digital transformation, enabling all those capabilities for customers. They’d much rather work with one leading company than 20 or 30 smaller ones.

    There’s This Explosion of Innovation, Says VMware CEO


  • VMware CEO: Why Can’t We Build the Telco Network Like the Clouds?

    VMware CEO: Why Can’t We Build the Telco Network Like the Clouds?

    VMware CEO Pat Gelsinger suggests that with the advent of 5G the telco network should be built like the clouds. “Why can’t we build the telco network like the clouds have been built for with scalability, flexibility, efficiency, and agility?” says Gelsinger. “That’s really the idea of the telco cloud. As people go to what’s called NFV, network function virtualization, and as they’re looking ahead to 5G services, can’t we have a new architecture for building the telco cloud? But it also is flexible and scalable and helps them do services between 4G and 5G.”

    Pat Gelsinger, CEO of VMware, discusses 5G and building the telco network like the clouds in an interview at the Mobile World Congress in Barcelona with CNBC:

    Building the Telco Network Like the Clouds

    What it really is about it’s saying that over the last decade and a half we’ve gotten pretty good at building clouds. Why can’t we build the telco network like the clouds have been built for with scalability, flexibility, efficiency, and agility? That’s really the idea of the telco cloud. As people go to what’s called NFV, network function virtualization, and as they’re looking ahead to 5G services, can’t we have a new architecture for building the telco cloud? But it also is flexible and scalable and helps them do services between 4G and 5G. It also helps them bridge so as they build these new services they can run them on the old as well as prepare services for the new.

    The telco market is like 80 percent the size of the data center and cloud market. This is big. It’s a huge adjacent market that largely we’ve never touched before. We’re really excited about that. If you think about what we’ve done, it’s about building this rock-hard infrastructure that never goes down. Data centers, businesses, and banks running it told the telco networks that they need rock-hard never-goes-down infrastructure. We really find a huge opportunity there.

    2020 is the Year for 5G

    I’ve said for a few years that I think 2020 is the year (for 5G implementation). I think when you when you see a show like this everybody’s starting to really gear up. The trials are underway. I really see 2020 as really where it’s going to happen. Right now the national anthem is playing and next year the game gets started. If you’re going to be a cloud you’ve got to be efficient. That helps the bottom line by building more cost efficiency and operational efficiency. You have to do that. But ultimately, it’s about the new services that 5G is going to introduce.

    It’s hard to say how much Huawei (potentially being banned in Europe) is going to impact. Obviously, people who have large positions with Huawei today, it becomes easy to add 5G onto it. It is somewhat dependent on carrier and market. Our view of what we’re trying to do with virtualization is to minimize unique dependencies on any particular hardware market. Part of our value proposition exactly helps customers navigate through the 4G to 5G transition as well as picking different key hardware vendors. That’s what that virtualization layer does so we think we actually help customers.