ZTE and the Value of End-to-End

Peter Jarich
Peter Jarich

Summary Bullets:

  • ZTE prides itself on being one of the handful of vendors which can deliver end-to-end solutions that stretch from the telecom network to devices and enterprise gear.
  • End-to-end solutions only matter if the value is clear to the service provider.

ZTE’s 2015 Global Analyst Conference takes place this week in Shanghai, China. As with similar events from competitors, it’s a prime opportunity to gain insights into the breadth of the vendor’s business – all of the spaces it plays in (or wants to).

While Current Analysis is sending a full roster of analysts to China for the conference, it’s fair to say we already know a good deal about the vendor. We’ve covered its strategy and products for some time. We have company assessments looking at ZTE in most key sectors of the telecom infrastructure market, including:

While the dynamics of these markets – not to mention the products sold into them – are incredibly diverse, ZTE’s position across them shares a number of similarities. On the downside, it suffers from perennially poor marketing, often lackluster products, and an overreliance on China. On the upside, improving profitability has put it on a more stable footing recently, and its presence in so many diverse markets makes it one of the few vendors capable of delivering true, end-to-end solutions.

Overcoming the weaknesses will likely require a combination of focused innovation, investment in additional global sales resources, and a strong commitment to compelling product and strategic messaging. Those are all decisions ZTE will need to make for itself. How to benefit from its strengths is another story. The value of financial stability may be well understood. But, is the value of end-to-end solutions?

In a world where Huawei loudly markets its end-to-end capabilities, and Nokia is buying Alcatel-Lucent in order to get closer to an end-to-end story, it would seem that there is compelling business logic in this story But, it’s also clear that operators often steer clear of the proverbial ‘one-stop shop’ approach to procurement. Routing purchase decisions are often decoupled from base station purchases. Base station purchases are almost always decoupled from device procurement. NFV promises to decouple telecom function hardware from software. The question, then, is what value do end-to-end solutions bring? Improved performance due to product synergies? Improved time-to-market based on pre-integration? Cost efficiencies (based on scale or simpler operations)?

If ZTE, then, needs to improve its marketing story, conveying the value of end-to-end solutions would be a good place to start.

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