Note: sign up here to join the RCR Wireless webinar on how to scale private 5G in Industry 4.0 (‘balancing customisation and simplicity in private industrial 5G networks’) on October 10, featuring speakers from Ericsson, EXFO, Kyndryl, and Verizon Business.
It’s got to be said: Ericsson is making all the right noises about enterprise 5G, finally – and for probably the first time ever. Whether this unhurried strategic focus, and late charm offensive, translates in the market into all-the-right-moves is impossible to know, as yet; but they are well telegraphed, their coordination looks good, and their direction looks right. And if parallel discussions about private 5G with certain operators are anything to go by, then the Swedish firm has shared its script – and the whole routine might just turn into a convincing ensemble piece.
Speaking with RCR Wireless ahead of its big analyst event in Boston earlier this month – where most headlines led on its joint venture around application programming interfaces (APIs) in the carrier space, and a few others gushed (a little randomly) about its reinvention in the enterprise market – Åsa Tamsons, senior vice president and head of enterprise solutions at Ericsson, zoomed in and out, and talked-up its thinking and explained-away its timing, and showed how all the pieces start to fit together for Ericsson. “We will be more than a [carrier] networks business,” she said.
The impression from Tamsons, flanked on the call by Manish Tiwari, head of private networks, is that Ericsson has been careful and deliberate, unrushed and unruffled; that it feels like it is ready for the market, finally, and the market is ready for it. There is some arrogance in there, and some humility, too – both of which might be taken the opposite way. While Nokia’s enterprise unit has sparked with new ideas like a hyperactive startup, Ericsson’s has been buried in the minutiae of corporate assimilation following its purchase of US-based Cradlepoint in late 2020.
It has been weirdly subdued in the interim, only to emerge, now, four years later, like the market is there for the taking. Alternatively, the story goes that Ericsson has watched and waited – and learned – and effectively backed a part of Ericsson into Cradlepoint; and managed this whilst also remaking its own heritage systems and appropriating new competencies to create, at some length, a genuine multi-specialist vendor, with rarefied expertise in cellular networks, enterprise systems, and enterprise sales. This is the tale that Tamsons and Tiwari tell, and it is a good one.
It stitches-in a narrative, too, about how the company’s newly integrated enterprise business is working hand-in-glove with the “other side of the house” – to capitalise on “unique strengths” in its essential RAN proposition, to make good on close relations with its operator customers, to harness work with APIs to open its networks to developers. It finishes like a total picture, of a business with a total vision; it is convincing, even if it acknowledges, as well, that it remains just that: a vision, mostly. But it is good to have Ericsson join this noisy house party, rather late, and to bring some new tunes.
Tiwari also tackles its sprawling rivalries in the enterprise space, effectively – about how Ericsson will differentiate from the rest of the pack (better networks, closer integration, a straighter focus, he says); including from its great rival Nokia, whose enterprise division, operating at arm’s length from the mothership, unencumbered and also somehow disconnected from it, has led the dance at the Industry 4.0 end of the private networks market. But the conversation with Tiwari will feature in another instalment; this one focuses on the original mission and strategy, as voiced by Tamsons; it starts in Boise, Idaho, home to Cradlepoint.
Tamsons explains: “We did not start [the integration] process for two years because we had learned through a couple of [other] attempts, over four decades, that the go-to-market is key. We had underestimated that; we’d thought the technology – because we’re strong in technology – was the hard piece. But we have learned, humbly, how important the [channel] is. It was one of the reasons we acquired Cradlepoint. The other [reason for the delay] is that Ericsson, in the past, had tended to optimise cost synergies in these deals, and undervalued the sales momentum.
“So we chose not to integrate, immediately. Cradlepoint was always the platform for us to build an enterprise business. But it’s a big thing for a small company to be a part of a large company – even if it is standalone. So we decided to keep its momentum, and understand its business – before we took the next step.” Which runs contrary to the phone calls to the news desk from disgruntled ex-staffers, that the business has been chopped up and messed about. As above, it sounds like the challenge has been to reverse Ericsson into Cradlepoint, actually. Is that a fair assessment?
“It is a fair assessment,” responds Tamsons. “With the adjustment that, of course, you can’t buy a business and keep it completely separate. You want people on the same platform. But, yes, it is not about backing Cradlepoint into Ericsson’s way of working in the telco business. We’re doing the reverse. We are bringing Ericsson’s private cellular portfolio into [Cradlepoint], and integrating into NetCloud, and expanding our go-to-market in the broader channel. That is the beachhead; and we’re building and scaling, while integrating the back-end to be part of the same payroll and so on.”
She adds: “So we don’t have to run that as a startup; the backend gains from the mother company. That’s the transition.” Just to recap, as of a couple of weeks ago, this multi-level integration is done: the Cradlepoint brand has vanished, except from a line of wide-area networking (WAN) components; its NetCloud platform has been extended as the management solution for the whole portfolio, including recently-acquired and expanded security software from Ericom; the networks portfolio has been re-ordered into twin (macro and compact) private 5G products and a neutral host offer.
See here for the whole run-down. Tamsons puts the brand story in the context of the group narrative. “We are moving to one brand – which is Ericsson; keeping it simple. You might ask, why – when Ericsson is so telco-focused. But it reflects our [heritage and] ambition – that we’re proud of our [carrier] business, and that we will be more than a [carrier] networks business… We are [stopping] Cradlepoint as a company brand, keeping it as a product brand… and we are building NetCloud as the software fabric – as the interface for policy, control, management, everything.”
Which gets into the bones of the proposition – to be picked over in the replay tomorrow (or later) of the conversation with Tiwari. The point is that the NetCloud application works for everything: its own networks and services, including its developing security play, as well as sundry fixed and wireless (and satellite, shortly) technologies in enterprise environments. Ericsson has worked hard on IT integration, it says, so standard access and security policies cascade directly across new 4G and 4G networks; but the management system does not go as far the other way.
Management of new private cellular and neutral-host systems are better in the NetCloud platform, the story goes. It is a tactical play, too, to migrate enterprises onto private cellular infrastructure. But Ericsson is not about to force the issue; cellular is better, says Tamsons, but it has to work with (and work like) existing fixed and wireless (Wi-Fi) IT networks, even as it replaces them. We want to be the default choice [for] secure wireless enterprise networks. Which is a bold long-term ambition. It won’t happen overnight; it means taking on the big fixed and Wi-Fi players.”
She continues: “There are so many advantages – in terms of cost, security, scalability – to go cellular-first. Some enterprises are bold enough to do that already, but most want to sweat their fixed assets – and we want to help them transition economically over time.” Hence the strategic importance of NetCloud as a broader management hub for enterprise networking and security. The pitch is to go “cellular-first” (probably not cellular-only); the rationale is to free machines of cables, and businesses of hardware – and so to bring flex and dynamism to operations and processes.
She comments: “We’re building a platform that is wireless, infra(structure)-less, and cellular-first. It is wireless to run business without cables and constraints; so you can set up new stations and locations with the same access and security policies. It is infra-less insofar as it is software-first and cloud-first; which just means less infrastructure. Enterprises need hardware, of course, but there should be less of it; their [network architecture] should be as lightweight as possible, to scale and grow… And it is cellular-first because cellular is the best technology.
“Which doesn’t mean cellular-only. One of our key propositions (‘link bonding’) right now is to enable usage of fixed assets when they are most viable, before capacity gets short – so you can move to cellular over time. Enterprises should use the assets they have; we want them to transition to cellular in a smarter way. And NetCloud is the glue for that – to manage and optimise connectivity, including policies and quality, on our cellular networks and on other network assets. Other [enterprise] players can do that, but they don’t have the same insights into the cellular network.”
Tamsons steps back; the talk about technology misses the point. “It’s not just about the platform. If we’re going to be successful – and humbly, this is what we underestimated previously, going into the enterprise space – then it’s not only about what you do, but how you do it.” All the clever revisionism with its brand and portfolio, and all the smart technology the company has developed, count for nothing if they do not stick. Which, again, is why Ericsson let Cradlepoint percolate following its acquisition, in standalone mode, and why its front-end integration was back-to-front.
“Cradlepoint has been a formidable partner in the enterprise channel… [and] it’s important we are the easiest to work with, the best to work with… The other part is just that it works as a product, zero-touch – like with our (Cradlepoint made / branded) wireless WAN portfolio. We are working to get to that with our private network solutions, too. Because we should be easy – in the channel, in our products. Because what’s easy in a macro-telco world is not what is required in an enterprise world. So that’s been a big focus for us and we are striving to get better,” she says.
And again, the timing of this new assault – four years after the Cradlepoint deal closed, two years after the integration started; all while Nokia et al have been releasing products, defining applications, exploring industries, making deals, talking tactics – is because Ericsson has been getting its ducks in a row. Tiwari and Tamsons will explain more in the next instalment; but its timing is dictated by the market, too, agrees the latter. “Yes; because while we’ve grown with Cradlepoint, invested in our security, got our private cellular offering together, and fixed gaps in our portfolio, the market has also matured.”
She goes on: “Everyone talks about how many deployments they have done – and it goes for us, too, as well as all the others. But that is not very interesting if these networks are not used at scale. Which is where we’ve seen a big shift over the last 18 months. Because private cellular is moving from lots of proofs and trials, frankly, into proper commercial usage and scale. We see that in our numbers, and in the market numbers. So in terms of the timing, that is also why we’re ready to bring this into the channels.”
To be continued…
Sign up here to join the RCR Wireless webinar on how to scale private 5G in Industry 4.0 (‘balancing customisation and simplicity in private industrial 5G networks’) on October 10, featuring speakers from Ericsson, EXFO, Kyndryl, and Verizon Business.
