The Big Story

Edge of the world

The last time wireless carriers started building out a new generation of networks, cloud computing was still in its early days. Back then, approaching the end of Barack Obama's first term as U.S. president, companies like AT&T, Verizon or BT were still tied to expensive physical networking equipment with special requirements and exacting uptime standards.

However, as you might have heard, software has been mighty hungry over the last few years. Software-defined networking began to upend traditional hardware networking companies like Cisco more than five years ago, and as wireless carriers finally start the rollout of 5G networks, they're realizing how cloud software can meet their performance and reliability standards while being easier to manage.

There's a scramble going on inside cloud providers like AWS and Microsoft to align themselves with the major U.S. carriers as 5G networks start to finally come online, as The Wall Street Journal noted Tuesday.

• This process began last year: Microsoft and AT&T announced a partnership around the middle of 2019, and AWS followed with its own deal with Verizon at last year's re:Invent.
• They're gearing up for the expansion of 5G networks, a generational stepstone that has turned into a nauseating buzzword for all manner of wireless pixie dust promises.
• 5G networks are still quite limited in coverage, and even when you can get a signal offer disappointing speeds compared to existing networks.
• However, that won't last forever. It takes a long time to upgrade wireless access points across a country as big as the U.S., and within a few years most of us will start upgrading to 5G networks.

What are carriers and cloud providers doing together, exactly? Mainly meeting in the middle to capitalize on the opportunity, as it turns out, leading to the emergence of "edge computing."

• Like countless other industries, wireless carriers would love to be able to take advantage of the commodity hardware and managed software offered by cloud providers, but the distance between the network access point and the handset has been extremely important in wireless computing — thanks mainly to our old friend, latency.
• So to date, they've had to invest in specialized hardware in their own data centers to manage that traffic.
• But cloud providers now offer their own servers designed to work in concert with their cloud services, which customers like wireless carriers can deploy in relatively small volume in lots of places around the world.
• Meanwhile, software-defined networking has established itself as the modern way to manage large corporate networks, and the benefits of this architecture are starting to make sense for wireless networks.

Now both groups are excited about the next decade, whereas in the past they used to find the other side either undependable or backward depending on where they stood. And it's not hard to see why that changed.

• Cloud providers love nothing more than large application workloads moving onto their servers, especially when those customers have the kinds of deep pockets that the major wireless carriers enjoy.
• For their part, the carriers can now start operating their services using many of the same industry-standard technologies that the rest of the tech industry uses, which is cheaper and also makes it easier to hire new talent.
• This also opens up opportunities for all kinds of cloud-adjacent vendors, already experts in operating around cloud services, to land wireless carriers as new customers.

And if 5G results in half the innovation that its backers have been promising for the last several years, there will be enormous opportunities for new ventures built atop these networks.

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Around the Cloud

• Cloud earnings continue to impress, with RingCentral recording a 30% jump in third-quarter revenue, far above expectations for the audio and video conferencing company.
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• Dropbox dramatically improved its margins while recording a 14% jump in revenue.
• Adobe spent $1.5 billion on Workfront, makers of a cloud-based collaboration tool for marketing departments, as big software vendors continue to add smaller companies to their product lineups.
• AWS is planning another expansion to its arsenal of data centers spread across Northern Virginia, following local approval of a 1.75-million-square-foot facility.
• Speaking of AWS, the cloud leader has taken a different approach to the "confidential computing" standards embraced by Microsoft and Google with its own technology called AWS Nitro Enclaves. Forbes unpacks that here.
• Zoom settled with the FTC after users complained the company had inflated the security of its flagship video conferencing service, following changes that strengthened that security.
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• Working from home side effect #237: The nightmare of identity management across different devices. JumpCloud just raised $75 million to help it sell solutions to companies that'll ease that problem.
• The headline on this New York Times vows column: "He knew about the cloud, then showed her the stars."

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