Full disclosure: I work for Google Cloud. My opinions are my own and nothing I share here includes or is based on information other than that which is in the public domain.
This week Google Cloud announced their Distributed Cloud. The idea is to bring their Anthos compute platform to edge locations including 146 existing, Google-owned locations (already being used for other Google services), customer owned data centres and service provider locations (such as mobile operators).
The edge computing space about which NET investors are so excited has just been entered by an 800lb gorilla with a lot of cash to invest. This story has been evolving for some time and Google already have some of their managed services beyond basic compute available on Anthos such as CloudRun. If they continue to port those existing services to Anthos (pure speculation on my part) they will have an enormous variety of offerings available at the edge, dwarfing the opportunity presented by compute alone.
And note here that Google is not just enabling their own edge locations with their technology. They’re creating market opportunity for service providers to offer Anthos too!
I’m my 20 years in the datacenter industry, I’ve seen many times how smaller companies look like they’re going to become enormous because they’re doing something the big boys have missed. Sometimes they manage it and the sleeping giant wakes up too late e.g. VMware, but often once the big name with cash to throw at the idea gets involved they are able to leverage their incumbency to gobble up the opportunity.
Large, multi-product vendors don’t always have the best product in every class but they close feature gaps preventing customer adoption every day. Once the features are there, it’s far simpler for customers to consume that tech from a vendor they’re already doing business with where it’s all nicely integrated and billed together. I’m already seeing this trend in customers I work with directly.
I don’t know for sure if NET will fail to stay ahead. Maybe they will continue to innovate in the edge computing space and stay ahead enough to provide value to customers that keeps attracting them, but for sure the competitive landscape for NET has changed this week.
Currently NET is 11% of my portfolio and I won’t be reducing it based on this news but it’s news that is worth noting as we track the changing story.