It says something about the sense of opportunity in the private 5G space, perhaps, that Nokia, the most restless and innovative agitator-brand in the vendor market, can post a record quarter (“double-digit growth, globally”) and extend its lead at the top, and yet still be frustrated it is not going faster. Which is the standard complaint, of course – from twitchy carriers and integrators, as well as from vendors that have either quit the scene already, or are ready to do so. (The rumour mill was at full tilt at MWC earlier this month, and may yet produce something.) But from Nokia?
Because the Finnish firm has reorganised its strategy (again), it tells RCR Wireless in Barcelona, to have a closer hand with its customers and a guiding hand with its partners – and to finally explode this stop-start mega market (as it is characterised). “It is both a thrill and a challenge to be in the position we are in – which is being chased,” says David de Lancellotti, vice president of Nokia’s enterprise campus edge business. It sounds like bravado, but it is not really; it is rather a tacit acknowledgement of the stiffening competition, which is very clearly distilling behind it.
Perhaps this fine-tuning by rival firms, whether they are limbering up (like Ericsson, most notably, and most quickly) or just getting out (like Microsoft, and maybe others), has re-focused Nokia’s cloud and network services business, which is taking a more direct approach with enterprises again.
“It is great being number one and it is also really hard. I have total respect for everyone in this market; every single one of our competitors. It is a mature sector, and also a startup one – depending on who you ask,” says de Lancellotti, when quizzed whether Nokia is feeling the heat.
This view of the private 5G market, as either primed or nascent, probably depends whether you prefer to look at the run-rate or the run-chase, plus a bunch of stuff like industrial upgrade cycles and cellular feature releases, and so on; it is about “who you ask in Nokia,” or within any firm, says de Lancellotti. No matter; the point is that Nokia claimed a “record” 55 new customers (‘logos’) in the fourth quarter of 2024, to finish the year with 850-odd in total – and to cement its position at the top of the ‘private 5G’ vendor league, it reckons. But its channel strategy has changed.
As well, it has just shared an affirmative slide in a separate session at MWC to show everything is tickety-boo in the world of private wireless – that its customers, at least, are putting more radio cells, core networks, data traffic, and user apps onto their edge systems. But it is not fast enough, it seems – as if it ever is – because de Lancelotti has re-written the firm’s rules of engagement, across markets, so Nokia is more directly involved with its enterprise customers again. Which is interesting because it means Nokia has flip-flopped, to an extent.
Remember, the Finnish firm was the one – all those years back, as spectrum liberalisation started to sweep through international markets – to break ranks with the old telco crowd and go direct to enterprises. Where Ericsson faltered, and said it would stick with its traditional operator customers, Nokia said it was not hanging about, and that it would go alone, or with whoever was willing-and-able among niche operators and integrators. More recently, it has worked its channels to field more business indirectly, through partners, including via more progressive carriers.
But the message now is that it is reverting to type, or that certain of its hotly-pursued specialist partners are not up to scratch. Kind of; almost. De Lancelotti explains: “We have refocused the team to look at very specific segments and to solve solutions in those segments directly. But that does not mean we are going to execute (sell/prime) directly… It means we will help to solve the solution, and then grab a partner to deliver it – whether it is because the enterprise wants an op-ex model, or specific mining equipment, or automated cranes for a port, or whatever.”
He goes on: “Or we bring in a carrier to lay-in their commercial spectrum – again, in order to solve the business problem. But at the end of the day, we have to take control over the sale and the [consultation] with the customer, and then decide how to partner to deliver it. We can’t always just wait for this or that integrator to solve all the problems.” Because even specialist resellers sometimes need help, if this highly-prized and highly-important new 5G discipline is to properly mature – is the new message from Nokia, as the industry catches its breath at MWC.
“If we did that (left it to partners), we would not be able to stay in this ranking order – as the dominant player in the market,” he says. But we should pause, actually, to make a correction, and a clarification as well; the idea Nokia’s sales strategy has changed despite its recent sales record is not right, and the sense Nokia is somehow bypassing its sales partners is wrong. On the first point, the new strategy actually predates its fourth-quarter showing, by about six months, and is presumably responsible for it, in part. On the second, indirect sales are outrunning direct sales by an ever-faster rate.
De Lancelotti took charge of global campus sales at Nokia almost two years ago – having headed its Verizon Business account in North America, originally, before leading its enterprise sales in the region, before re-engaging directly with Verizon to help with its own private 5G pitch (and to drive Nokia’s sales with it from nothing to some-amount-of-millions in a couple of years). He says: “I came in thinking the only way to achieve scale is to partner-up. And I still believe that. I believe very deeply in our partnerships – since working with Verizon.
“I still believe in that model, completely. But we have flipped it upside down – to take control of what we are doing. Because we have the specialists; we have people that understand manufacturing, mining, oil and gas, logistics, ports, healthcare, in-building with neutral-host and DAS. So the idea is to focus our efforts to go deeper into those areas, and then pull-in our partners over the top in support. And that has been the accelerant.” Which sets us right – that private 5G is about partnerships, in sales and solutions, but that Nokia wants to play point, if not to prime.
In other words, its strategy is to keep the ball in play, for its partners to put it in the hoop – in order to keep the scoreboard ticking over for everyone. It is interesting because – at MWC, especially, where storylines tend to coalesce – the comparison with Ericsson is irresistible and productive, and also weird. Because they are like old derby rivals in whichever-sport-you-like – hailing from the same part of the world, with a rivalry borne from hatred and respect, probably based in the fact they see themselves in each other.
It is fanciful, perhaps; but the idea that the Swedish firm’s recent moves to get its Industry 4.0 house in order, with a reorganised product portfolio and a slicker channel operation, make it more like Nokia in the private 5G space is just wrong. If anything, it is the opposite. Their rivalry is diverging in the enterprise market, even as their activity is aligning; their different strategies reveal their different characters – and their different views about the value of 5G technology to enterprises, or else about their different views of how its value should be owned and extended. Maybe.
To be continued…
