Google will bring its cloud services closer to customers using 5G wireless equipment built by Ericsson AB, stamping its mark on a business that was once the sole preserve of phone companies.
The U.S. tech giant and the Swedish company struck a partnership to offer cloud computing for time-sensitive applications such as robotics and virtual reality that will only work when the digital signal travels over a short distance.
Google and Ericsson have begun tests with Italy’s Telecom Italia SpA for the applications they plan to sell to companies, including transportation providers or carmakers, according to a statement on Tuesday. They’ll need eventually to collaborate with other phone companies as the cloud systems will feed into regional telecom networks.
A cloud provider like Google “does not have to be a competitor to a communications service provider,” Google Cloud Chief Executive Officer Thomas Kurian said in an interview.
Still, the deal shows Silicon Valley’s growing role in managing the networks that underpin the internet, not just the data that runs through them. It also underscores how a medley of businesses are jostling for slices of the nascent 5G wireless market, which could eventually be worth trillions of dollars according to consultants at KPMG LLP.
Over the past decade the U.S. tech giants have focused mostly on massive centralized data centers to provide less time-sensitive services like storage. These are too remote from customers to help in the next wave of so-called edge computing.
The companies declined to put a value on the deal.