Google Cloud’s acquisition of MobiledgeX gives hope for companies aspiring to foster an edge ecosystem outside of big players like Amazon Web Services, Microsoft, and Google, according to a report from telecom consultant STL Partners.
The report analyzes the impacts of the acquisition made in April, and the conclusions that the edge computing industry should draw. It first attempts to answer why MobiledgeX sought to be acquired, which STL Partners bluntly speculates is due to MobiledgeX running dry on funds. This left it unable to proceed beyond “pilots and small-scale deployments with their telco partners, to establish broad commercial rollout,” writes Tilly Gilbert, principal consultant at STL Partners who specializes in edge computing, 5G and telco innovation. The consultancy also finds that MobiledgeX was unable to find traction with major U.S. telecoms and the company’s leadership vacating the company over the past year.
STL Partners’ Gilbert says Google has shown success in releasing its code open source, with examples like Kubernetes in 2014. It believes a MobiledgeX GIT repository already exists with code under the Apache license, but believes it remains to be seen if Google will release all of MobiledgeX’s commercial grade code to the community in an open source format. Rather, the report suggests that Google will divulge elements it believes will create a de facto industry standard while retaining parts of the management and orchestration capabilities for themselves. This is to add value on top of any deployments of the MobiledgeX’s code to create an attractive commercial proposition for itself, the report says.
While STL Partners says MobiledgeX had a strong technical proposition seen in proof of concepts and pilots with telecom operators, it lacked a clear commercial proposition. Thus, “this lack of clarity led it to change direction several times on who exactly would pay for its services,” which led to changes in direction on who will pay for its services. STL Partners notes the company’s swing from an application-centric platform that developers would pay for, then a platform that telecom operators would pay to essentially license it out as their own portal.
The analysis finds that MobiledgeX likely struggled from being too early to the market. With its launch in 2018 with funding despite a fledgling market and telecom operators known for their inertia to innovation practices, it was not in a strong position. Additionally, its funding as a Deutsche Telekom-backed company is said to have caused issues, as mobile operators refused to collaborate directly with a competitor.
Despite the shortcomings, STL Partners concludes that the problems faced by MobiledgeX were idiosyncratic to the company and unlikely to affect other prospective edge computing companies.
“These specific issues should leave hope for others out there wanting to nurture an edge ecosystem beyond the likes of AWS, Microsoft and Google,” the report surmises.
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