They are using a hosted provider, run by the makers of Matrix themselves. This lets them get the benefits of federation while making the hosting someone else's problem.
Of course, we all want to see Mozilla bootstrap their own Matrix instance, but maybe the cost/benefit equation worked out differently for them than we would have expected. I can imagine this lets them replace IRC with a better solution faster while still supporting the development of an open standard by becoming a client of the company that's developing it.
Does this forebode something more sinister? I hope not...
Is Mozilla an example for the next major adopter of Matrix or are they not? If they are, and everyone else signs up for modular.im as well: at what point does this ship of Theseus called Federation only exist inside a bottle?
WordPress exists as as OSS even though WordPress.com exists. And there's a clear migration path from being hosted by WordPress.com to running your own private WordPress.org instance (or vice-versa), that can be taken at any time if someone's needs change. I don't see what's so different here.
If it were me, I would want to a) support the existing players in the ecosystem and b) do the migration piecemeal if possible.
Working with a third party lets them start standing up rooms immediately, and get their people using the new standard without being blocked on a long process of setting up their own infra. It’s federated. They can easily migrate onto their own hardware at a later date.
It also injects money into the community they are trying to support. Even if they did start running all of their own instances, I would hope they keep a support contract with Modular for that reason.
Paying Modular + using Matrix widely immediately + beginning work on their own infrastructure is a strictly bigger shot in the arm for Matrix than just putting a couple devs on pre-planning and prototyping infra would be.
Of course, we all want to see Mozilla bootstrap their own Matrix instance, but maybe the cost/benefit equation worked out differently for them than we would have expected. I can imagine this lets them replace IRC with a better solution faster while still supporting the development of an open standard by becoming a client of the company that's developing it.
Does this forebode something more sinister? I hope not...