Although Ericsson and Nokia seemed aligned on their “Huawei messaging” they appeared to diverge on how to go to market to address, and help operators address, the enterprise digital transformation/ Industry 4.0/ you name it opportunity afforded by 5G/ edge computing/ network slicing/ you name it.
At its Sunday press conference Nokia CEO Rajiv Suri was very clear that he sees a massive opportunity in enterprise networks and software. He said the market for mobile base stations for enterprise networks is potentially double the size of that of mobile operator networks. But he went further than merely identifying equipment sales to enterprises. He said Nokia would sell its whole range of software – automation etc – and services skills to enterprises, as it transitions to becoming “a software company”. It wants to move from its current 1,000 enterprise clients to around 4,000 quickly.
Now step aside for a minute and consider that the operators are targeting all these industrial and enterprise use cases themselves as a clear way of making money to pay back all their expensive 5G rollouts. What will they make of a key supplier also selling the private network, process automation software and cloud services directly to these “verticals”?
Asked by your writer on this, CEO Rajeev Suri said that Nokia would indeed co-operate with mobile operators, where they add value. (And of course where a business wants a private network operating in licensed spectrum they will need that operator element from a connectivity point of view). He added that having better private networks locally would drive more traffic over the wide area – also good for operators.
But there won’t be much WAN handover if those businesses are availing themselves of an edge based application environment to drive an enterprise use case where the majority of the data stays local. And neither did he mention the ability of businesses to build networks either in their own licensed spectrum (see Germany) or in unlicensed spectrum (see MulteFire and 5G NR-U).
A Nokia exec told us over cocktails that the vendor is indeed co-operating with operators on the vertical opportunity. In fact, operators are increasingly waking up to the potential of the space, and are asking Nokia to help them understand the capabilities they can deliver to businesses. It is genuinely collaborative, we were assured.
Ericsson’s CEO, Borje Ekholm, asked essentially the same question a few hours later, went for a much clearer and shorter response: “We are very clear that we will not compete with our customers.” Now, no doubt Ekholm is aware of Ericsson’s previous “diversify” strategy, one that led it to be accused of losing focus and speed of execution in its core CSP market. So he saw the danger in the question and ducked low. But as he did so he threw a short left jab at the Blue corner. I’m not sure, though, that it connected.