On this special episode of the Futurum Tech Webcast – Interview Series, I am joined by Durga Malladi, Senior Vice President and General Manager at Qualcomm for a conversation focusing on the recent acquisition of Cellwize, 5G, and Open RAN.
In our conversation we discussed the following:
- A dive into the recent acquisition of Cellwize
- Insight from Durga into how the acquisition will propel Qualcomm ahead in the 5G forefront
- The impact on operators and why Cellwize technology + Qualcomm will be important for mobile operators
- A look into the potential drive growth across the Qualcomm portfolio
It was a great conversation and one you don’t want to miss. To learn more about Qualcomm visit their website here.
Watch my interview with Durga here:
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Transcript:
Daniel Newman: Hey, everybody. Welcome to the Futurum Tech Webcast. I’m your host, Daniel Newman, principal analyst, founding partner at Futurum Research. Excited for this special interview series edition, where I have Durga Malladi joining me to talk about breaking news, acquisition being made by Qualcomm. And we’re going to talk more about that here on the show. But first, Durga, welcome back.
Durga Malladi: Thanks, thanks for having me Daniel.
Daniel Newman: Hey, it’s always great to bring you on and chat with you. Company’s moving fast. Every quarter, I’m looking at the revenue numbers, and of course 5G has been a driver, but there’s been so much diversification. And since Cristiano Amon took the helm, and you as part of his leadership team, you’re starting to really see some of these investments, the infrastructure investments, the investments in automotive, all the opportunities and diversification are really starting to take shape. And you’ve got more news today, an acquisition of Cellwize. So let’s start there. It’s exciting, but tell everybody, it’s not a household name. Tell everybody a little bit, give them the background, who is Cellwize? And why did Qualcomm make this acquisition?
Durga Malladi: All right, Daniel, that’s a really good starting point. So Cellwize is a company that’s based in Israel. They have invoiced globally, and they are in the business of providing cloud-native, multi-vendor service management and orchestration layer that sits above a lot of the co-network layers and so on, so that it orchestrates the entire network all together. They have a successful business, large number of operators that normally work as well.
And from our perspective, we are really excited about this because from our standpoint, it strengthens our overall 5G infrastructure portfolio. As we have been expanding upon the topic for a long period of time, starting from our RAN solutions that we announced a couple of years back and looking forward to where we see the natural trajectory of O-RAN compliant networks being deployed. We feel that the orchestration layer is an important piece of the entire puzzle. And so we are really excited about the company joining us. We’ve been talking to them on so many different aspects. On both public and private networks, and they truly compliment what we are offering in this space.
Daniel Newman: Yeah, this is a big, big opportunity. The transition to 5G is significant, Durga. It’s not an easy transition. Players that were successful in past generations, it is not insured that they’re going to be successful. And I think part of the reason Qualcomm continues to expand its investments, play a bigger role in the infrastructure space, is because you guys truly believe that the company is capable of adding a lot of value, helping the service providers, and the operators go faster. We’ll talk about that in a minute, but let’s start with Qualcomm.
So I kind of started the show talking a little bit about the diversification, how you’re expanding. This is definitely part of that story. So being a 5G leader on devices and being the company that provides that technology, I think everyone knows, there’s no question mark there. But this space, in the RAN, is a space where Qualcomm is growing its presence. You’ve sort of alluded to it, but how does this deal really propel the ambitions to make sure the market knows Qualcomm is aiming to lead this space?
Durga Malladi: I think it’s important to understand, from a broader perspective, as to what is it that as Qualcomm we are trying to accomplish, overall? And we are in the business of truly fueling the digital transformation of industries using 5G as a vehicle to do that. And as a part of that, we end up powering what we’ve been calling as the connected intelligent age. And that, in some sense, leads to the overall growth of this new cloud economy, that we’re talking of.
If you start with that sort of a mission statement and take a look at everything that we are doing as Qualcomm, an important piece of the puzzle as a part of 5G is, there’s a massive diversification of the number of kinds of devices that come into the market. We’ve been doing that. It’s not just about smartphones, but all kinds of new devices. We’ve been doing that at the edge. But on the other side of the edge, we have the RAN where it’s equally important to have the right solutions and elements in place.
So in that sense, the acquisition of Cellwize and their deployment and their orchestration capability, really it begins to strengthen our overall infrastructure portfolio. Back in the day, we had talked about the fact that we need a network that scales up and down nationwide, citywide networks, all the way down to private networks. And the way to do that is the usage of RAN virtualization and O-RAN based networks.
Now, when you think about O-RAN based networks, it’s a large number of moving parts in it. We are doing our part, before we made this acquisition, we were doing our part already at the foundational layer on the radios and in the distributed units. But when we think of an O-RAN compliant network, there’s a large number of moving parts, as I mentioned. And so this disaggregated network needs that orchestration layer at the top.
And over the last two years, as we started looking at not just the transition for… Greenfield operators have a unique luxury of starting from scratch, and therefore you can build it cloud-native right from the beginning. But when we started talking to a larger number of even brownfield operators, to do this transition, we felt that this was an important piece of the puzzle. And it is something that’s absolutely essential.
In addition to that, we’ve been talking a lot about private networks. And especially in private networks, we have a situation wherein our customers, we are not an infrastructure vendor. We work with a large number of partners, but our customer happens to be system integrators. Those who are in the business of operating, managing, and running the network. But these system integrator needs tools. They need automation tools, they need orchestration tools.
And so in that sense, when you put together the complete picture, the combination of what we as Qualcomm were doing till now from a RAN, DU and RU solution space and small cell space, complimenting that with what we have in the orchestration layer, really puts together the complete solution. Now, I do want to say one thing. In an O-RAN world, our DU doesn’t have to only work with our RU solution. It can work with anyone else’s solutions. Similarly, our RU can work with anyone else’s DU solution, that’s how it’s done. The same principles will apply even for the orchestration layer. But now as a complete portfolio, we feel pretty confident about where we in our infrastructure offering.
Daniel Newman: Yeah. And in your release, you made a quote about basically Qualcomm’s ability to drive the development of the modern 5G network. Accelerating open RAN, cloud-based cellular infrastructure, innovating 5G private network deployment. So just to lean into what you said though, and just to reiterate though, building this infrastructure will end up being a driver of all the other business units and areas of focus for Qualcomm. And I thought that was pretty interesting, because obviously the stronger infrastructure means, the premium devices, connected PCs, connected vehicles to the cloud, you know what I’m saying? So, as I was trying to cue you on the portfolio a little bit, it is very interesting that if you can accelerate the infrastructure, it’s going to also pay dividends to the other business units that are trying to see 5G adopted more rapidly in the proliferation of the adoption across all the other parts of your portfolio.
Durga Malladi: You said it absolutely right there, Daniel. And just to double down on that, the digital transformation of industries is all about, as we expand our portfolio, what we are enabling really is a large number of these industries, whether it’s automotive, whether it’s an IOT businesses, a lot of these industries have never really deployed cellular-based technology at scale. And these networks, as they permeate through those industries and start transforming those industries, that is where we end up, not just, we enable a large number of other businesses of ours as well. So it’s kind of, what we see is a stepping stone towards enabling other business units that we have with different kinds of devices all the way from the sensors and the kinds of industrial deployments that we have, all kinds of new devices, AGVs, and whatnot.
But these are the different kinds of devices that eventually get enabled, but it all starts with the fact that you have to be in a position to drive that digital transformation of these industries. And so part of that happens to be, make sure we have all the pieces of the puzzle to do that from a 5G standpoint on the infrastructure side.
Daniel Newman: So one more thing that I did pull out of the press note, and I liked the fact that you brought partners in your ecosystem into this. I saw giant ITOEMs like HPE talking about how they see strength in this partnership and in automation, operation support. There’s a ton of complexity. I don’t think many people realize when they’re connecting, how much actually has to happen and continuously happen in order to be connected. Verizon. So talk about operators for a minute, the faster 5G RAN adoption isn’t really just a Qualcomm thing. I mean, the operators might be the biggest beneficiaries of this because the market is still kind of like, am I… They’re still waiting to see the full benefits. I think a lot of people are still just starting to begin to see how much 5G can change. Whether that’s, like you said, private network, or just your day-to-day connection to devices. Talk about how important this acquisition, and the continued development of Qualcomm will be, in really helping these operators speed their deployments.
Durga Malladi: We work, as you know, very closely with operators in terms of how we can help them as they start addressing new business opportunities that they see on the horizon, and what is it that we can do to help them? And for the longest period of time, we had our commercial focus areas, which actually enabled that, both on devices side and small cell side, and nowadays increasingly on the vDU and RU side. But we also got some really good feedback, really good feedback, about welcoming our acquisition of Cellwize, because Cellwize, prior to acquisition, they’ve had a lot of these operators as their customers. Really good track record with that.
And now we feel that it’s even more important for us to put together the complete picture as we enable these operators for the new business models that we just talked about. In the end, everyone is looking for 5G expansion beyond the smartphone base. And there are new devices that are definitely coming in, but these devices also need to be empowered by the kinds of networks that feed into them. And that’s the place that we can actually truly offer a holistic solution to operators. At the end, it’s a portfolio of solutions that we have, operators will cherry pick what they want from each of these, but that’s the way that we see it.
Daniel Newman: And it does change the dynamic of your relationship with some of the operators, right? Because obviously I’ve been to a dozen Snapdragon events and summits, and it’s been commonplace for these operators to come on and talk about partnerships of the technology devices, but you’re going to be now directly supplying technology at a… You’re scaling up the amount that they’re directly working with Qualcomm. So, changes your motion a little bit, it changes the relationship from ecosystem to these operators becoming vendors, or you becoming a vendor to these operators in a bigger way.
Durga Malladi: That is correct. Some of the journey we had already begun with our macro cell RAN offerings on the vDU and RU, we had already started that journey. This takes it to one level above that because this orchestration layer is something that directly fits into the network. And so we really look forward to that and we’ve heard some really good feedback from operators coming in as well. Now we can have so many different discussions with them.
Daniel Newman: Yeah, it’s interesting. And we’ll kind of wrap there, Durga, but you’ve seen the company go from sort of a small subset of ODMs and OEMs where almost all the transactions take place, despite all the design, and as you’ve built the PC business, as you’re building the automotive business, and now as you’re building the infrastructure business, that customer net has grown and gotten wider and wider. And again, this goes back to that broader portfolio story that Qualcomm is really working hard and diligently to build on the success, and the provenance that it has, in leading the device space and to taking it across all the opportunities that are 5G.
So, Durga Malladi, SVP and GM, leading the infrastructure business at Qualcomm. Thanks so much for joining me on the Futurum Tech Webcast. Congratulations on the acquisition of Cellwize.
Durga Malladi: Thanks once again, Daniel, always looking forward to being here.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
