MobiledgeX ponders new biz model as it bets on multicloud role

The big idea was to provide a single platform that allowed the world's telcos to run applications at the "edge," a catch-all term for any location nearer to customers than your traditional data center. It has not quite worked out as planned for MobiledgeX. Founded by Germany's Deutsche Telekom in 2018, the Silicon Valley startup seemed to miss out as some of the world's best-known operators instead hitched themselves up to US Big Tech.

But monogamous affairs with the likes of AWS, Google Cloud and Microsoft Azure are looking dodgier by the day. "Suckers," tweeted Neil McRae, BT's chief architect, after a major outage at AWS in December. He was referring to operators that plan to park their core network in a public cloud.

Other executives have been nearly as scathing. "Our view would be that's too risky and you are almost outsourcing a core competency," said Scott Petty, Vodafone's chief digital officer, about AT&T's decision to host its 5G network inside Azure. "You need to be able to work effectively with all the key players and move workloads around."

MobiledgeX CEO Jason Hoffman says various new commercial models are under discussion. (Source: MobiledgeX)
MobiledgeX CEO Jason Hoffman says various new commercial models are under discussion.
(Source: MobiledgeX)

Easier said than done, it seems. Snapchat messaging firm Snap, a longstanding customer of AWS and Google, says its systems are "not fully redundant" on the two cloud platforms. "Any transition of the cloud services currently provided by either Google Cloud or AWS to the other platform or to another cloud provider would be difficult to implement and would cause us to incur significant time and expense," it wrote in a regulatory filing last year.

It explains why France's Orange also balks at all-in deals with a public cloud. "Some years ago, everyone was saying we would have vendor lock-in with Ericsson, Huawei and Nokia and no one mentioned Oracle and Cisco and now the light is on hyperscalers," Yves Bellego, Orange's director of network strategy, told Light Reading last year. "In fact, that risk is something we have always been very concerned about."

Mounting evidence of this unhappiness sounds like a positive for MobiledgeX. Its current pitch is partly about operating as a kind of abstraction layer between a telco and any public or private cloud. This means not necessarily competing against AWS, Google and Microsoft at the edge but ensuring an operator can port its systems between their edge clouds.

CEO Jason Hoffman, a former executive at Ericsson, says the realization that public clouds were serious about offering edge technologies to operators came at the end of 2019. "They are showing roadmaps over the next three years to do everything that we do – of course, with the exception of allowing you to move from them," he tells Light Reading. "So the way we are architected and our sovereignty, privacy and multicloud stories are the core elements."

One platform to rule them all

The marketing pitch is consistent with one of the original aims – to establish MobiledgeX as the edge middleware standard for the telco industry. But it raises unresolved questions about ownership and commercial strategy. In this guise, MobiledgeX would probably be more acceptable if it were not majority owned by a single operator. Even its long-term survival as a commercial venture is in doubt, Hoffman admits.

"Do our owners want us to be like a VMware-style enterprise software company that IPOs [has an initial public offering], or function more like a charitable foundation for the betterment of telecom, or something in between?" he says. "We could be like Firefox and function as a non-profit foundation with a commercial arm, or like Chrome – open source but supported by Google. And at the extreme end there are more commercialized browsers like Opera. We do discuss all that stuff ad nauseam."

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The ownership structure has already changed, with Samsung and VMware leading an investment round in 2020, although Deutsche Telekom remains the controlling shareholder. MobiledgeX can also boast success in attracting operators. While few names have been disclosed, it now claims to be working with 26 operators in total. Hoffman does name-drop Telefónica and Orange as two that are in the "sphere" around Deutsche Telekom. The UK's BT, in which Deutsche Telekom still owns a 12% stake, is another, he says.

Less clear is the extent of the footprint that MobiledgeX serves. On a per-country basis, it is currently targeting installation at between three and eight sites. "When we look at the top 15 mobile markets, it is in the order of 80 to 90 locations in those markets," says Hoffman. MobiledgeX is also putting its controllers in the availability zones for public clouds. "Increasingly, if there are edge locations that AWS is on in France, then we can combine that with sites we have with Orange there."

But the close partnerships between some operators and the public clouds have clearly shrunk the addressable market for MobiledgeX. "AT&T is pretty deep on Microsoft, Verizon is pretty deep on AWS and Vodafone is pretty deep on AWS, and so we don't do anything with those three," says Hoffman. One possible scenario he envisages is a "balkanization" whereby each of the top three operators in a country selects a different cloud player from the others and markets are carved up by US Big Tech.

Co-existence is crucial

Growing fear of cloud "lock-in" could now quell the enthusiasm for single-supplier deals and spur operators to look for platform alternatives. The uncertainty at this stage is where MobiledgeX will finish up. Outside AWS, Google Cloud and Microsoft Azure, its main competitor from a features standpoint is probably VMware, now an investor, says Hoffman. "It is partial," he explains. "There are things we do with VMware and there are some products within VMware that overlap with us a bit."

Another possibility is an attempt by operators to develop the in-house software tools that would prevent lock-in. Vodafone, notably, aims to recruit another 7,000 software engineers in the next few years, adding to a workforce of about 9,000 engineers today. Their role will partly be to write code for a new telecom-as-a-service platform, ensuring Vodafone can port its various workloads between different clouds. "You need specialist teams to do that and present a set of microservices for developers to use, or they'll hard-code to AWS or Azure," said Vodafone's Petty when the plans were announced.

Regardless of how MobiledgeX evolves, what's guaranteed is a far greater edge role for AWS, Google and Microsoft than operators would have envisaged only a few years ago. One trend Hoffman notes is the substitution by many telcos of Google Anthos for the ill-fated Openstack platform, promoted in 2010 as a challenger to the public clouds. And Google, intriguingly, markets Anthos as a multicloud technology that already supports AWS deployments and will soon cater to Microsoft as well. Like it or not, some form of co-existence with the American heavyweights has become a necessary part of just about any edge strategy.

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