Enterprise revenues today constitute a very small proportion of any incumbent infrastructure vendor's total revenues. However, all vendors are looking to grow their network businesses beyond the traditional CSP market and are investing heavily in a range of new technologies and applications, with a key focus on private networks - and the campus wireless market in particular.

Campus Wireless Go-To-Market Strategy

The private networks market can essentially be split into two categories: Wide Area Networks (WAN) and Campus Wireless. While the WAN market is an established business that continues to grow, the campus wireless market is very much a nascent market. At present, it is small but growing very quickly. The WAN market typically consists of a small number of large regional or nationwide deployments such as public safety or utility-type networks. In contrast, the campus wireless market - as the name suggest - is characterised by much smaller, site-based deployments such as office buildings, hotels, shopping malls, schools, universities - and of course - factories.

Unlike public mobile networks and large private networks, the campus segment is a business where distribution channels and partnerships are critically important. This is very different to selling cellular networks to CSPs. In particular, a different approach is needed for the Industry 4.0 market, with specific consultancy, design and managed services capabilities to cater for individual verticals. As a result, vendors need to partner with a plethora of companies, including consulting companies, systems integrators, industrial technology companies, IT and cloud companies, device OEMs, etc. They will also will need to develop a host of different business models and a multitude of different distribution channels.

Nokia-Kyndryl Partnership and Ecosystem

Nokia recently announced a partnership with Kyndryl, IBM's old global managed infrastructure services business, which was recently spun off as an independent company. Kyndryl is one of the world’s largest IT infrastructure providers involved in the design, building and management of complex, mission-critical information systems across a range of verticals. The partners plan to combine Nokia's Digital Automation Cloud (DAC) application platform with Kyndryl's consulting, design, implementation and managed services expertise, with the aim of supporting companies as they transition to Industry 4.0. Several Proof of Concepts applications have already been developed for US chemical company Dow Inc. which support applications such as worker safety and collaboration, asset tracking, etc. These applications are based on a blueprint which Dow hopes to expand and deploy across its sites worldwide. Exhibit 1 shows Nokia's current ecosystem partners.

Exhibit 1: Nokia: Private Wireless Growth and Industry 4.0 Ecosystem

Verdict: An Excellent Strategic Fit

Although private 5G can provide higher speeds and a better mobile experience with new capabilities, manufacturers may fail to see the benefits unless they talk to people with specific vertical expertise who understand their requirements - which may be very different to the requirements of a mobile operator. This is why partnerships with companies such as Kyndryl are vital for vendors such as Nokia. In fact, Counterpoint Research believes that the Nokia-Kyndryl partnership is an excellent strategic fit for both companies.

For instance, Kyndryl possess considerable scale, it has experienced teams with lots of expertise and knowledge in IoT, the edge and also AI. In addition, it mostly serves large global companies and has an enterprise customer base of around 4,000 companies. With 450 private wireless customers globally, Nokia is a leader in the private networking market and possesses a comprehensive portfolio of mission-critical network options, 5G SA core and multi-cloud solutions, vertical market applications, edge-based platforms as well as a range of industrial devices. The partnership thus creates an entity that is global both in IT consulting and in communications networks - i.e. two complementary sectors critical for comprehensive 5G and edge implementation for global enterprises.

With the CSP market only likely to record modest growth at best over the next few years, it will interesting to see how quickly the Nokia-Kyndryl partnership starts to contribute meaningful revenues and to what extent - and how soon - Nokia's new enterprise initiatives can redress the vendor's 11:1 CSP/enterprise revenue imbalance.

Enterprise Wireless In Focus

The enterprise wireless market is a major growth opportunity for all incumbent vendors. As perhaps a recognition of its importance to its future growth, Ericsson this week announced the creation of a new "enterprise wireless" business unit formed from the merger of its revamped private networks unit and its Cradlepoint wireless WAN business. The unit will also include the Vonage API acquisition, once completed, as well as other businesses such as IoT platforms. However, it is inevitable that incumbents will face stiff competition across all of these markets, and from a multitude of new entrants, particularly cloud providers such as Microsoft Azure. As no player can offer end-to-end solutions across all verticals, developing the best ecosystems through partnerships will be critical for all of them, including the big cloud players.

Campus Wireless Go-To-Market Strategy

Nokia-Kyndryl Partnership and Ecosystem

Verdict: An Excellent Strategic Fit

Enterprise Wireless In Focus

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