Nokia Analyst Conference – Automation Saved Managed Services, but Will That Work as Nokia Looks to Become a Leading SI?

Jason Marcheck

Jason Marcheck

Summary Bullets:

  • Nokia’s annual analyst conference featured a heavy dose of Services-oriented messaging throughout the proceedings
  • Nokia aims to deliver up to 80% of its managed and/or professional services via remote delivery by 2020
  • While getting remote delivery right helped Nokia turn around the profitability of its Services business, it could be questionable how effective that model can be as the company moves more aggressively on SI-based services

At Nokia’s recently concluded industry analyst conference – held annually in Boston – I got to see a few things that I rarely see. First, I saw snow falling from the sky for the first time since, well, the last Nokia conference (Personal note: I live in Texas). Second, all in attendance got to see a clearly energized and animated panel of senior leadership from Nokia regarding the company’s short and long-term future. Now, this is not to say that Nokia is a boring company. After all, didn’t it practically invent the concept of Sauna? However, over the past few years, Nokia’s “body language” skewed towards being reserved in light of the painstaking company transformation it was trying to execute in order to save the company.

With most of that heavy lifting successfully accomplished, CEO, Rajeev Suri and his lieutenants were refreshingly upbeat – even as the messages were an even mix of pragmatic and aspirational – as they outlined the company’s plans for 2015 and beyond.

For my part, I was mainly focused on the managed/professional services implications of Nokia’s plans. In a nutshell, I came away with the somewhat obvious conclusion that Services underpins most of the vendor’s key strategies going forward:

  • As it seeks to maintain its strong position in Radio (and 5G), network planning and optimization services will be a key pillar, and is being supported by the company’s much touted “3D” capacity planning capabilities and, in North America, its SAC Wireless assets.
  • As the vendor seeks to maintain visibility in CEM, services in support of predictive operations will be a key pillar to help operators proactively address potential customer issues, in some cases, before they happen.
  • As it seeks to use the IoT movement to expand into markets beyond telecom, consulting will be used to support its platform offerings aimed at connected car and other verticals.
  • As the company seeks to carve out its place in the Cloud and network virtualization, Nokia plans to use SI services to become the “domain aggregator” for telcos looking at making networks increasingly virtualized.
  • As the company seeks to continually improve margin performance, it aims to deliver 80% of its services remotely by 2020.

All in all, a load of strong messages that show that the company knows services is a strength and has good ideas about how to leverage it.

However, as I left Boston to thaw out in the mild climes of Austin, how the ideas cited in my last two bullet points above dovetail struck me as a potential cause for concern. To be sure, as networks become increasingly virtualized, services will become more software-oriented. In theory, this supports the idea of remote delivery. However, SI can be about having “people in places”. It is one of the reasons why Ericsson’s strategy of buying local SIs has helped built its practice. So, the question in my mind becomes, will Nokia’s 2020 vision for remote services delivery become a hindrance vis-à-vis the likes of IBM, Accenture, HP, and Ericsson, whose global services presence will allow them to “turn up” for an engagement rather than delivering from some (potentially) far off location such as India or Portugal?

How’s the saying go? “80% of success in life is showing up.”

About Jason Marcheck
Jason is Research Director for the Current Analysis Service Provider Infrastructure service. Jason and his analyst team monitor and evaluate activities in the markets for Digital Media, Fixed Access, IP Services, Mobile Access, and Transport and Routing Infrastructure, Telecom Vendor Services, and the Service Enablement Ecosystem.

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