Ericsson and Nokia: Everything Old Is New Again
May 28, 2014 Leave a comment
New starch for an old shirt; rebranding; same old, same old: These are all ways of saying the same thing… efforts to position something “old” as something “new.” They’re also reminiscent of a week (like this week) where Nokia launches a new, dedicated Security unit and Ericsson talks up a renewed focus on vertical markets.
Okay, implying that the post-Memorial Day news out of Nokia and Ericsson is “nothing new” might be a bit unfair.
Sure, Nokia has long talked up its focus on security and how this focus differentiates it. The new security unit, however, further confirms security as a strategic differentiator and looks to expand on this messaging with solid, tangible efforts including requirements investigations and security partner ecosystem development. Likewise, Ericsson’s intent to penetrate vertical markets outside of telecom should be well known to anyone who follows the company, not just the people who showed up at its NEST event last year. Regardless, there’s something to be said for the creation of an “Industry and Society” division within its Professional Services business unit with the mission of leveraging Ericsson’s services know-how and telecom gear into the utilities, transport and public safety spaces. If nothing else, you can say that formalizing what’s been a long-standing goal for Ericsson argues that the company has gotten to a place where initial success in these markets suggests that a deeper push makes sense – that work with players such as Volvo (connected vehicle) and E.ON (smart grid) has taught Ericsson how to be successful in these areas.
Yet, in the spirit of “everything old is new again,” there may be a lesson or two here.
As Ericsson and Nokia look to engage broader customer audiences, there is a very real chance that these two vendors may be competing with their customers (Ericsson more likely than Nokia). There’s also a very real opportunity for cooperation as the vendors look to their traditional service provider customers as a channel. The concept of “co-opetition” – a balancing act between competing and cooperation – also falls into the category of things that have been around for ages, but keep re-emerging. Yet, as Ericsson and Nokia look to showcase momentum behind their new efforts, the “cooperation” side of “co-opetition” should enjoy an advantage; vendors want to showcase their skills in action, and service providers are still their best platform.
It seems like a great opportunity for savvy service providers to look for favorable deal terms in the near term or other ways in which vendors will incent momentum. Talk about putting some new starch in the old shirt?