Nokia AP Analyst Summit: Going Beyond Infrastructure and Getting Closer to the Enterprise

A. Amir

Summary Bullets:

  • Entering the enterprise services market, Nokia has defined its market position and target segments, but its direction is still unclear, especially with its multiple sub-brands.
  • Nokia’s brand visibility is still low in Asia. Solid strategies are required to win the market, especially with greenfield accounts.

At Nokia Asia-Pacific (AP) Analyst Day in Hanoi, Vietnam last week, Nokia shared its AP business updates and plans, covering topics from hardware to software, products to services and carriers to other enterprises. As one of the pioneers in digital communication technology, Nokia’s capabilities in providing network infrastructures to carriers do not need any introduction. Nokia is rated as a ‘leader’ in GlobalData’s product assessments for small-cell, GPON and next-gen edge solutions, just to name a few. However, Nokia may not be the brand you would think when it comes to the enterprise services market. While it has several enterprise offerings through its sub-brands or previously acquired brands, its overall direction in this market is still not very clear. One of the key topics discussed at the event was Nokia’s initiative to streamline its strategy, portfolio, position and target segment in the enterprise services market. While the AP market is promising, it is also highly challenging. Can Nokia win and survive in the enterprise market? Will it have a clearly defined value proposition and potentially be able to compete against its traditional channel partners?

Nokia’s offerings to enterprises are based on its strengths: communications services. One of its key solutions is a private network using cellular and fixed technologies, targeting specific verticals with mission-critical application requirements such as government, transportation and utilities. While Nokia has a strong solution in this segment, carriers, system integrators (SIs) and its traditional infrastructure competitors like Huawei and Ericsson also play in the same area. Beside the private network, Nokia also offers an Internet of Things (IoT) solution (WING), unified communications and collaborations (UC&C), analytics and SDN/NFV. Unlike the niche private network market, these other markets are already highly competitive. Nokia needs to have a strong brand and solid channel strategy and differentiate itself from competitors.

Nokia claimed it is not going to compete with carriers, focusing only on very large enterprises. However, most AP carriers today offer managed ICT services to enterprises across verticals, including the three verticals Nokia identified. For example, most operators offer IoT, UC&C and SDN/NFV to the enterprise market across verticals including government, transport and utilities. Unless Nokia is partnering with carriers (or known by Nokia as ‘Service Provider as a Partner,’ SPaaP), it is very unlikely for Nokia to pull this off without being seen as a direct competitor. Other vendors that tried a similar ‘high-touch’ model have had to scale back their approach. Others do go direct, especially in national markets where they have no customers, but are less open about this approach. While the private network solution is mainly for very large enterprises, other Nokia solutions are also relevant to the mid-market. It is not clear whether Nokia will attempt to go down-market or stay focused only on very large enterprises, which can also be the most competitive segment and difficult for any ‘new entrant’ to penetrate. The line between Nokia and carriers’ target segment will remain unclear, especially as carriers are expanding their capabilities in managed ICT services.

Brand is also an important area. While Nokia is known for network infrastructure and mobile phones, Nokia’s brand visibility in the Asian enterprise services market is still low. When commercials are put to one side, enterprises tend to choose suppliers that have an existing relationship, possess a track record and customer references, and offer innovation and knowledge transfer. Nokia will have an uphill battle with the first two sets of requirements, especially in pursuit of any greenfield accounts.

About Alfie Amir
Alfie Amir is a senior analyst in Current Analysis Group. He is responsible for research, consulting and analysis focusing on market and technology trends, competitive analysis and account-based intelligence for ICT spending and modeling future investments. He also works across several trackers (e.g., fixed, mobile and IT) providing market sizing, forecasts and insights across the region. Alfie is quoted regularly in trade press and is a regular speaker at conferences, workshops and other industry events.

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