Nokia’s gambit for enterprise revolves around a three-tier strategy including a modernization of physical network infrastructure, a broadened and more reliable connectivity layer, and industrial automation software.
Variations abound within those categories because the requirements of enterprises are as diverse as the industries they represent. Nokia has more than 1,500 customers in the enterprise space today and started reporting sales in 2019 when the market segment became a growth vehicle for the company.
“We’ve been in the enterprise business for well over 15 years,” Raghav Sahgal, president of Cloud and Network Services at Nokia, told SDxCentral in a phone interview. “We started to share our numbers for specifically the enterprise space in 2019 and 2020, and if you look back at the results of both years we outgrew the market and we grew double digit in 2019 and 2020.”
The enterprise sector, which includes private and operator-managed networks, has “been a very strong performer for us,” he said. “If you look at what’s happening in 5G, the value creation will be on the consumer side but it will be heavily on the enterprise side as well.”
Nokia Folds Enterprise Business Into Larger Unit
Nokia’s dedicated enterprise team that was recently moved from a standalone business unit to the Cloud and Network Services division under a massive reorganization process, works within very specific verticals like energy, transportation, and manufacturing to design offerings for specific use cases, Sahgal explained.
“It’s very important that when you’re going after enterprises that you build segment knowledge about what is the use case, and how do you apply the technology to solve this specific problem for a mine or an airport or a manufacturing plant,” he said.
When Nokia CEO Pekka Lundmark shared more details about his turnaround strategy for the company in late 2020, analysts questioned the merits of the decision to eliminate Nokia’s standalone enterprise unit.
“Nokia has been making a lot of progress in that area recently, and of course, it’s such an important area forward. So it would be a shame to see anything slip there as the business gets folded into a larger group,” Ed Gubbins, principal analyst at GlobalData, told SDxCentral at the time.
Lundmark’s restructuring plan is largely framed around his forceful dismissal of Nokia’s “end-to-end” strategy, which he described as unnecessarily complex because it required approvals from multiple high-level executives for common deals.
However, Nokia’s approach to the enterprise market is still largely unchanged, likely because it was and remains a high point for the struggling company. Nokia works with network operators to deliver enterprises the equipment and services they need to fulfill their goals on a carrier-operated network, but also works directly with enterprises that opt for a completely standalone private network running on private or shared spectrum.
Frameworks Blend Between Operators, Enterprises
“We work heavily with our service provider partners as a first port of call, but it’s the segment knowledge and technology leadership that we bring in private wireless,” Sahgal said. Sometimes industrial partners come to Nokia with an independently designed framework and other businesses approach Nokia for a complete end-to-end private network offering, he added.
“Our go-to-market is really a combination of working with our existing service provider customers as a top priority, and then working with other industrial partners or directly with the industry if that’s what they want us to do,” Saghal explained. That flexible approach has worked well for Nokia thus far and underpins what Saghal describes as a unique and differentiated offering in the enterprise network sector.
“We’ve put up over 260 private wireless networks so far. We are a market disruptor in private wireless, on the campus as well as the wide area networks, so the proof is what we’ve been able to do, and this is across all these industries,” he said.
The private wireless market is of particular importance now because it’s driving the digitalization of many industries, a trend that’s accelerating amid the ongoing COVID-19 pandemic, according to Sahgal, who described that as the connectivity layer of Nokia’s three-pronged enterprise strategy.
The third-leg of Nokia’s enterprise game plan is anchored to the delivery of industrial automation software that solves industry-specific problems on top of the network, Sahgal explained. This includes software developed by Nokia, its enterprise customers and third-party applications from the digital industry at large, he said.
“That third layer is where we’ve opened up our API interface so that you can actually host different types of applications, whether you develop them, or it comes from the ecosystem, or it comes from us to be able to enable the very specific use cases,” Sahgal said.
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April 03, 2021 at 01:07AM
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Nokia's Triple-Threat Gambit for Enterprise - SDxCentral
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