What went wrong at Edge Gravity?

Edge Gravity, Ericsson's internal startup focused on the development of a global edge computing cloud, is said to have suffered from an 'innovator's dilemma' that hinders large companies from changing their ways.

Jeff Baumgartner, Senior Editor

June 23, 2020

4 Min Read
What went wrong at Edge Gravity?

Ericsson confirmed that it is shutting down Edge Gravity, an internal "accelerator unit" focused on building and launching a global edge cloud network in partnership with a bevy of telcos, cable operators, content delivery networks and data center operators.

Ericsson started to spread the word to partners, customers and employees that Edge Gravity, an underperforming piece of its Business Area Technologies and New Businesses (BTEB) group, "will close its operation over time," TelecomTV reported earlier this month, noting that some executives tied to Edge Gravity have already reached out to other edge companies or have already left Ericsson.

The process of scrubbing Edge Gravity out of existence is already underway, as its individual website presence and its Twitter and LinkedIn accounts all appear to be gone.

According to Ericsson, Edge Gravity, a unit born out of its Unified Delivery Network initiative, "struggled to meet key milestones, and its performance has not met expectations to scale the business to the next stage."

While Edge Gravity did not live up to Ericsson's expectations, the reasons for its failure run deeper than that, people familiar with the initiative said.

Edge Gravity, a unit that at one point employed more than 225 people, suffered from a systematic "innovator's dilemma" that tends to surface at Ericsson and other large, established companies and can creep into critical areas such as leadership, governance and process as they pursue new markets, technologies and operation models, a person familiar with the edge computing unit said.

"Ericsson is a great investor when it comes to having the dollars," but isn't always willing to stick with those projects for the long term, the person said, noting that a key focus of Edge Gravity was to prop up its core customer base of service providers and possibly spin itself out.

"At the end of the day, it was really a financial decision," a source said, noting that Edge Gravity simply was not driving the return on investment hoped for, causing Ericsson to ultimately pull the plug.

Sources familiar with Edge Gravity's rise and fall say the issues with the ultimate direction of the edge computing unit can be traced back to the departure of the unit's former CEO, Marcus Bergström, who left Edge Gravity in early 2019 to become CEO of Sweden-based Vionlabs.

Bergström's exit left a leadership vacuum at Edge Gravity at a critical time before former Verizon exec Kyle Okamoto was named CEO of the unit in mid-2019. Okamoto was a good choice for the job, the sources said. But they noted that he walked into an already-tenuous situation that had been percolating in the months following the Bergström's departure, making it difficult for Edge Gravity to rapidly implement the kinds of changes needed to succeed in the long haul.

Although Edge Gravity was created under the auspices of an internal startup with a large degree of independence, the idea behind that autonomy and agility didn't always shine through as things tended to regress back to the way Ericsson likes to do things.

"Ericsson was a little overbearing at times," even when Bergström was still running Edge Gravity, a source said.

People familiar with Edge Gravity said product focus and competition in the edge computing sector weren't the biggest issues it faced, but contributed to its problems nonetheless.

On the product side, Edge Gravity, they said, needed to invest more heavily in self-service technologies, orchestration and other critical baseline tools.

Edge Gravity also had to deal with a broad set of companies large and small that were tackling the market in various ways, inducing webscalers like AWS, Microsoft and Google, and other players such as Packet (now part of Equinix), Stackpath, EdgeConneX, VaporIO, MobiledgeX and Mutable, a company that bills itself as an Airbnb for infrastructure.

Before calling it a day, Edge Gravity did make some significant headway in forming partnerships with dozens of content delivery network and service provider partners around the world, including Equinix, Limelight, Rogers Communications, KDDI, Hargray Communications, Mytel, Telenor, US Cellular, Veon, Optus, Taiwan Mobile, Telstra Corp., Vodafone, Bharti Airtel, SingTel, Telefónica, NTT DoCoMo, China Unicom, Chunghwa Telecom, Mobiphone and Telkom Indonesia.

About a year ago, Edge Gravity was putting some initial focus on low-latency apps and services, including online gaming. It was also looking to expand into arenas such as smart cities and industrial IoT and how it could support the edge computing needs of 5G.

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— Jeff Baumgartner, Senior Editor, Light Reading

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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