Last week, telecom software provider Mobile Edge X was acquired by Google. Given that Google did not press release the acquisition and has reportedly open sourced the company’s technology, it seems likely that Google did not pay a hefty premium.
We take two lessons from this news:
- Telecom software is important to Google
- Being a pioneer in technology is hard, and probably getting harder
MobiledgeX built a suite of telecom software targeting, as the name suggests, the edge of the network including the radio access network but also facilitating compute clusters close to the sources of traffic. The Network Edge is an area of increasing focus and interest to telecom operators and their suppliers. Network technologies move on a pendulum between centralized and decentralized topologies. For the past ten years, the trend has been towards centralization aka The Cloud. But in recent years, edge uses have become more important, or at least discussed. This is partly a story about 5G, a standard which boasts many features useful to the edge, but it also speaks to a growing realization that not everything has to go back to the cloud. Many applications (or at least a solid subset of them) can and should be handled at the edge. We have touched on the importance of telecom customers to the big cloud service providers in past posts, and Google is no exception. The addition of MobiledgeX gives them a full suite of offerings for their customers’ edge deployments. Note in that linked post on AWS powering Dish’s 5G network, Dish still owns and controls edge deployments, MobiledgeX is Google Cloud’s counter offering.
That being said, this migration is still in early days, and the set of customers who need complex systems at the edge is not huge yet. MobiledgeX had some success but suffered from timing – arriving before the market was ready.
Or at least that is one read of the story.
Full disclosure, we have known the MobiledgeX team for many years, all the way back to their previous company Joyent. That company pioneered the node.js programming environment, which among many other features provided an easy way to sync remote applications with centralized compute resources. Joyent’s business model was to give away node.js (via open source) and sell resources in those centralized compute clusters. Another way to describe this, of course, is to say that Joyent was an early cloud service provider. As with MobiledgeX, Joyent arrived early in the transition to the Cloud, and was ultimately sold to Samsung, again with a modest exit.
There is a common refrain in the Valley that companies need both good technology and good timing. And that “too early for the market” is certainly one valid interpretation of the story. However, another way to look at this pattern is to recognize that there are some technologies that are prone to domination by the largest companies. No start-up can compete with Amazon’s or Google’s resources. Some could argue that this is not a technology question, that these kinds of businesses just need large pools of capital to operate. We would argue this is instead a failing of the market. There is ample capital available to private companies. Instead, there are just some areas that have become too important with the Giants to leave alone, and they can use their scale to limit competition.
As we have said, the story of MobiledgeX, and Joyent before it, can be interpreted in many ways. Nonetheless, we think it is troubling that these areas of innovation end up relegated to the margins. Networking, and technology more broadly, need innovation, new ideas and new business models to drive the industry forward. For an industry built on the ethos of overcoming the Innovators’ Dilemma, it is disappointing to see innovators like these unable to make a larger mark.