Summary Bullets:
- Earlier this month, Nokia and Ericsson hosted Analyst Summits in quick succession, providing an opportunity to compare their strategies and messaging.
- Broadly, the two telecom networking leaders are pursuing a common strategy and telling similar stories, with Nokia seemingly more intent on evolving beyond telecom.
We’ve already written about Nokia’s first global Analyst Summit following the acquisition of Alcatel-Lucent. We’ve treated it in this blog, as well as digging into its OSS/BSS, Fixed Access, Transport & Routing, and IP Services Infrastructure strategies. A Tuesday/Wednesday event in Helsinki, Nokia’s Summit was followed by Ericsson’s version in Stockholm on Thursday and Friday.
Back-to-back analyst conferences don’t happen very often. Few vendors or carriers manage to coordinate their efforts, or have any real incentive to do so. After all, this type of timing just invites comparison, potentially shining a spotlight on what one firm does better (or worse) than the other. And that’s just what I hope to focus on here.
At a high level, the two vendors telegraphed a very similar strategy with a similar set of focus areas.
- 5G-Ready Solutions. Nearly every vendor in telecom and tech has some sort of 5G story to tell. Nokia, however, has been leading with the claim that its AirScale RAN solution will be able to support 5G going forward. For its part, Ericsson used its event to launch “5G Plug-Ins,” software which will allow its Ericsson Radio System to deliver 5G-type performance.
- TAM Expansion. Whenever you believe 5G will arrive, telecom spending isn’t expected to be growing much (if at all) going forward. You can blame the greater use of commercial off-the-shelf technologies in telecom networks. You can blame constrained service provider CapEx budgets. Regardless, any vendor relying on sales into telecom has to explain to their shareholders why their traditional total addressable market (TAM) is stagnant. But that’s an explanation no shareholder wants to hear. To this end, Nokia and Ericsson both explained how they would be selling into new categories of customers.
- Web-Scale SPs and Alternative Network Providers. While it’s often implied that “service provider” means “telco,” the definition is much broader. Ultimately, it should apply to any company providing communications services. To this end, Ericsson and Nokia, both, played up their focus on the media space. And, even before Ericsson launched its HDS 8000 datacenter offer, web-scale companies like Google, Facebook and Amazon started getting included in the service provider definition. Adding to this, Nokia talked up the concept of “Alternative Network Providers,” non-telco companies delivering access services. Think Google’s fiber or wireless efforts (Project Loon) or new players like Legado.
- IT and Verticals. How else will TAM expansion be engineered? A focus on the enterprise and vertical markets is one way. For Nokia, that includes public safety, digital health, utilities, smart cities, and transportation. For Ericsson, that means public safety, utilities, and transportation.
- IoT & Connected Society. Any attempt at targeting vertical industries circa 2016 will naturally include IoT. Upfront, Ericsson noted that IoT – along with 5G and cloud – represents a dynamic which is shaping the industry. For its part, Nokia followed up on its IOT messaging from Mobile World Congress earlier in the year, noting how its OZO and Withings acquisitions fit into a broader IoT play and integrating various IoT assets into a “new” platform – IMPACT.
As much as Ericsson and Nokia might have converged on semi-similar messaging, this was a welcome convergence. It argues that both vendors are seeing – and looking to exploit – similar market themes and opportunities. That’s great news for anyone trying to understand the industry. It’s even better news for anyone looking to understand the differences in how two leading vendors are attacking the market since differences in their strategies are easier to compare. If you’re interested to see how that comparison pans out, you can head over to our site.