Nokia hedges 5G play with focus on opportunities in the enterprise space

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TBR perspective

The next few years will be challenging for Nokia (NYSE: NOK), and execution will be critical to ensure the company is optimized to drive profitable revenue growth when its addressable market ultimately returns to sustained growth. With its core communication service provider (CSP) customer segment, which composes 95% of Networks’ revenue, expected to remain in a cost-optimization cycle pending new, proven revenue growth opportunities enabled by 5G (which TBR’s research suggests remains several years away), Nokia’s strategic focus on opportunities in the enterprise space and its internal digital transformation are prudent and timely and will take center stage in determining how financially successful the company will be as it transitions into the next decade.

Though more CSPs are committing to deploy 5G and other advanced network innovations such as virtualization over the next few years, the reality is that these infrastructure investments are being justified because they provide significant cost efficiencies to CSPs, enabling them to build, operate and support networks in a much more efficient and cost-effective manner compared to prior generations of network technology. This reality not only increases pressure on Nokia to boost its enterprise exposure to grow revenue, but also pushes management to accelerate digital transformation to protect margins.

Though TBR generally agrees with Nokia’s stance that the world is at the cusp of Industry 4.0, the divergence in thought comes down to timing and whether this cycle will be a short-duration revolution or a long-term evolution. TBR’s research suggests the latter and that Industry 4.0, which includes mass 5G adoption globally, will not ramp up until the 2022-2025 timeframe, at which point business cases will be proved, justifying an increase in market spend on ICT infrastructure. Until that time, Nokia needs to rightsize its shorter-term expectations and focus on building a solid foundation for its fledgling enterprise business while digitally transforming its internal operations to stay competitive.

 

 

Enterprises, 5G and Industry 4.0 dominated most of the mindshare at Nokia’s 2018 Global Analyst Forum. Nokia spent much less time discussing its individual product innovations and more time discussing how technology, people and processes are coming together to enable digital transformation, not only for CSPs but also for enterprises.

IoT is getting a lot easier

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While it is too early to say that the Internet of Things (IoT) market is fully mature, it is maturing. The first three years of the IoT era were filled with extravagant claims, inadequate products and services, and a chaotic partner ecosystem. Starting in 2018 and accelerating throughout 2019 and 2020, more customers will come to the market with an understanding of what they are looking for, offerings will be easier to implement and integrate, and the partnership ecosystem will be more navigable for both vendors and customers.

Join Ezra Gottheil and Daniel Callahan as they discuss their 2019 commercial IoT predictions and reveal what vendors need to know to compete effectively for IoT-related opportunities in the fast-evolving digital transformation space.

Don’t miss:

  • How the IoT ecosystem will evolve and how vendors will find their niches
  • How packaged and bundled IoT solutions will proliferate
  • Not all data is valuable: data economics will drive design

 

 

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed at anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Services Weekly Preview: November 19-21

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Before we celebrate Thanksgiving on Thursday and recover from all that food on Friday, we will publish some of our periodic analysis of IT services vendors, management consulting profiles, and special reports. Here’s what’s coming:

Monday: TBR’s 3Q18 Booz Allen Hamilton full report will provide analysis on one of the federal market’s most forward-thinking and risk-taking services providers. While peers struggle to cultivate a relevant data science workforce, BAH aims to cement its advantage by leading the charge around data science standardization. Its fast-mover advantage enables BAH to set the rules and challenges competitors to fall in line. Such efforts support scalability of more mature capabilities while BAH continues to evolve by exploring new business models, investing in IP and delving into emerging technologies such as blockchain, artificial intelligence and directed energy.

Wednesday:

  • TBR’s 3Q18 CACI full report examines how a traditional defense-led federal services contractor is adjusting to the incursion of commercial IT best practices into its core market areas. The report analyzes how these market disruptors can work to the advantage of a company like CACI, which is investing in software-defined open architecture systems in high-end defense technologies, such as electronic warfare and signals intelligence, to disrupt traditional military suppliers rooted in old procurement models focused on hardware-defined, proprietary and bespoke solutions.
  • In June we described BCG in our Management Consulting Benchmark as the best-positioned for acceleration among immediate peers, including McKinsey and Bain. Our new profile on the firm furthers that assessment, with a caveat the firm will need to retain talent, especially in emerging technology areas, to remain competitive, particularly with Big Four firms like PwC and EY.
  • Last week in Dallas we heard directly from Atos and the new Atos-Syntel leadership about the strategy and expectations for this multibillion-dollar, North America-centric acquisition. Our special report will detail why we think Atos’ renewed approach to the U.S. market will have a substantial impact on the company’s performance in the near term.

Top 5 IT firms hired over 37,000 people in Q2, the highest since Sept 2015

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“Bozhidar Hristov, senior analyst at Technology Business Research, US, told the daily that cyclical changes – driven by rising attrition, demand for professionals with skills in new technologies that can not only execute on traditional outsourcing projects but can also drive design-led opportunities – are compelling Indian vendors to hire again.”

Kurian brings enterprise smarts to Google Cloud

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During his tenure at Oracle, Thomas Kurian proved himself as a balance of technical savvy and business strategist at a company that serves the largest enterprises in the world. He reportedly left Oracle because he believed more fully in a strategy to coexist with the cemented leaders in the public cloud IaaS market. Both of these points fit Google Cloud’s aspirations well.

Creating its Google Cloud division and appointing Diane Greene as its CEO in November 2015 was the first step Google, Inc. made to tell a cohesive story around its managed cloud services and more effectively vie for share of the enterprise cloud market in competition with Amazon Web Services and Microsoft Azure, among others. Greene’s enterprise experience from co-founding VMware qualified her to start this transition, but potential Google customers have indicated to TBR that Greene’s empathy had not effectively trickled down the organization to complete the business messaging enterprises are looking for. TBR believes Kurian is a perfect fit to complete what was started by Greene, and he will be able to wrap Google’s technical abilities in a more clear and compelling enterprise story.

Customers care less, vendors buy more, and both sides become more intelligent

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An exclusive review of TBR’s 2019 Cloud Predictions

The entire cloud market is becoming more defined, consolidated and focused on the business value being delivered. This increasing maturity is prompting acquisitions by leading vendors, which will intensify in 2019. Not only are big purchases being integrated, but more large purchases will be announced in the race to meet rising customer investment in cloud solutions. Even as customers spend more on cloud, they increasingly care less about the specific delivery method, resulting in widespread hybrid implementations. Lastly, the rise of integrated analytics, artificial intelligence (AI) and machine learning will move customers further along in their journeys to transform their processes and technology to become more intelligent businesses.

Join Allan Krans, Cassandra Mooshian, Meaghan McGrath and Jack McElwee as they dig into developments in the cloud market through 2018 and expectations for 2019.

Don’t miss:

  • The risk and reward for additional cloud acquisitions
  • How customer decision making is evolving to focus more on outcomes than delivery methods
  • How the integration of emerging analytics and AI technologies is helping customers implement more intelligent solutions and growing revenue streams for vendors

 

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed at anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

The pendulum swings: Customer demands reshape how infrastructure vendors do business

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Insights from TBR’s 2019 Data Center Predictions

The data center remains an evolving pillar of the enterprise ecosystem. Emerging technologies such as 5G, NVMe, quantum computing and blockchain are reshaping how these technologies work together, while rapidly rising demand for the cloud is causing data center vendors to rethink strategies such as go to market and investment.

Join Geoff Woollacott, Stephanie Long and Catie Merrill as they take a deep dive into how infrastructure vendors will support their clients’ digital transformation plans and the new strategies that will emerge.    TBR’s analyst team will provide a snapshot of how the data center market will evolve during 2019.

Don’t miss:

  • How infrastructure partnerships will enable rapid transformation
  • How R&D will shift as evolving customer demand pushes infrastructure vendors to the edge
  • What new technologies and trends will shape 2019 for infrastructure vendors

 

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed at anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Enabling stakeholders across the healthcare ecosystem to navigate the path to value-based care

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An exclusive review of TBR’s Healthcare IT Services Benchmark

Growth in the global healthcare IT services (HITS) market is accelerating as health IT investment converges around value, patient-centrism and innovative, next-generation healthcare technologies. The environment strongly favoring HITS vendors with the most ubiquitous and comprehensively integrated suites of legacy and emerging health IT solutions.

Join John Caucis March 20 as he discusses how HITS vendors are evolving their solutions and go-to-market approaches to effectively navigate the changing healthcare market. Additionally, John will review the results of TBR’s most recent Healthcare IT Services Benchmark and highlight the trends shaping the HITS market in 2019.

Don’t miss:

  • Revenue growth and profit drivers for HITS vendors
  • HITS providers that are emerging as market leaders, and why
  • Factors driving solution introductions, alliance formation and acquisitions by HITS vendors

 

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed at anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

5G will be an evolution, not a revolution

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Insights from TBR’s 2019 Telecom Predictions

Communication service providers (CSPs) are focusing on network transformation, which is a key component of their broader digital transformations. CSPs will leverage 5G and other next-generation technologies, such as virtualization, artificial intelligence and automation, as part of their network transformations to reduce costs and build a foundation that can enable and support new business models.

Join Chris Antlitz as he provides TBR’s leading-edge thinking on where the telecom industry is heading and how the digital era will impact stakeholders in the telecom ecosystem.

Don’t miss:

  • 5G will be an evolution, not a revolution.
  • CSP spend on NFV/SDN will ramp up.
  • Wireless will begin to disrupt the traditional fixed broadband business model.

 

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed at anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Consulting’s robot army: How RPA changes the consulting business model

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Insights from TBR’s 2019 Professional Services Predictions

Join Principal Analyst Patrick M. Heffernan for a roundtable discussion with TBR’s Professional Services analysts as they review their market predictions for 2019 and beyond, diving deep into the role robotics process automation (RPA) will have on the consulting business model. Using case studies and details from specific IT services vendors and consultancies, the team will put RPA in context of other emerging technologies and IT services as a whole.

Don’t miss:

  • How RPA changes staffing models across IT services
  • Smaller digital transformation engagements’ impact on the traditional consulting business model
  • How emerging technologies and emerging trends, such as asset-based consulting, will impact IT services vendors in 2019 and 2020

 

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed at anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].