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24 May 2022

Ericsson sets up enterprise division, restructures management team

Ericsson has emulated arch-rival Nokia by creating a private 5G network division capable of targeting enterprises directly, rather than only in partnership with operators.

This is the culmination of a gradual change of direction at Ericsson, which has seen the success of Nokia in addressing private wireless, with or without the involvement of an MNO. The acquisition of Cradlepoint last year, and the establishment of a private networks unit, indicated that Ericsson was softening its stance that it would not compromise good relations with its key clients by bypassing operators in an enterprise 5G scenario.

That strategy was adopted by CEO Börje Ekholm when he took the helm, but now Ericsson can see the need for a flexible approach to go-to-market, in the diverse enterprise environment, and it needs to move quickly – Nokia has incumbency in private 4G, but it is not inevitable that it will translate this into the same strength in 5G, so the time is right for its challengers to intensify their efforts.

So from June 1, Ericsson is creating a new division, Enterprise Wireless Solutions, merging its private LAN and Dedicated Networks units with the Cradlepoint business it acquired for $1.1bn in late 2020. The new division will take full responsibility for developing private 5G solutions for enterprises, with a “dedicated go-to-market organization for enterprise customers”.

While Ericsson stresses that this will still exploit established relationships with service providers, there is also scope for going direct to enterprises.

George Mulhern, currently CEO of Cradlepoint, will head up the new group, working closely with Åsa Tamsons, who leads the Technologies & New Businesses unit. The latter will “continue to focus on developing new business solutions to accelerate growth across Ericsson’s core and enterprise businesses – building on the successful model established to incubate new growth businesses, such as Dedicated Networks and Cradlepoint”.

When the $6.2bn acquisition of Vonage is completed it will also become part of the new division.

“With this change we are taking important steps in our journey to execute on our strategy. The new Business Area Enterprise Wireless Solutions will provide the focus and conditions we need to thrive in the enterprise market and secure the next wave of success for this business. We are also excited to continue to invest in new businesses for our long-term growth through the proven model established in Business Area Technologies & New Businesses,” said Ekholm in a statement.

This is part of a broader reorganization, including a shake-up of the management team. Ericsson has also created another new division, Cloud Software and Services, merging its Digital Services and Managed Services units – both of which have been financially troubled in recent years. The merged group will be headed by Per Narvinger, currently head of the Networks product area, who will also join the executive team, along with Mulhern.

Another new addition to the top table is  Moti Gyamlani, who is promoted from head of procurement to lead a new group function called Global Operations, charged with working to “simplify and digitalize overall ways of working”.

On the way out from the executive team are the heads of the Managed Services and Digital Services units. Peter Laurin, head of the former, had already announced that he planned to leave the company; while Jan Karlsson, who led the latter, will now “drive the development of the Global Network Platform”. Also leaving the executive team, and Ericsson, is Arun Bansal, currently head of Market Area Europe and Latin America.

“After turning around the company, Ericsson is entering a new phase of growth,” said Ekholm. “The changed group structure that we announce today represents exciting opportunities for our people, our customers and our business and will allow us to continue to grow our core mobile infrastructure business and capitalize on the fast-growing enterprise market.”

Meanwhile, over at Nokia, the Finnish firm is bolstering its own private wireless business as it prepares to defend a business that has been a key source of growth during difficult times for its main carrier 5G activities. Nokia now claims to have 450 private wireless customers, up from 290 in March 2021, but it also has a growing range of rivals. Not only is Ericsson becoming more aggressive, but large enterprise IT and WiFi players such as HPE and Cisco are building private cellular offerings with radio partners like Airspan or JMA.

Both those giants focused heavily, when they launched their offerings at Mobile World Congress, on their expertise in WiFi, the incumbent wireless technology in most businesses. So Nokia is now including more WiFi options in its own platform as WiFi 6/6E brings the unlicensed spectrum network closer to 5G in capability, and as WiFi 7 looms on the horizon. WiFi has now been included in Nokia’s Digital Automation Cloud (DAC) platform, the heart of its private wireless offering, along with 4G and 5G.

However, in its announcements, Nokia was careful to present WiFi as a second-class connection compared to 5G, but one that needed to be supported because of its incumbency – a different tack from the WiFi-first pronouncements of Cisco and HPE.

“The secure, low-latency and reliable connectivity provided by 4.9G/LTE and 5G allows enterprises to access, analyze and act upon operational data in real time, for new capabilities and efficiencies,” said Nokia. “Traditionally, however, organizations use a variety of technologies to connect assets, including WFi, and as a result, many are upgrading to WiFi 6 to improve capabilities for connected legacy assets and services.”

It continued: “With the introduction of the Nokia DAC WiFi solution, organizations can tap into license-free spectrum to augment their private networks and support non-business-critical operational technology (OT) workflows, such as deskless workforce instructions and non-critical connections used to access machine maintenance data.”

Nokia DAC will now support a single cloud-based operations and management interface for all connectivity technologies. Nokia has also developed ‘MX Boost for private wireless’, which can aggregate the capacity of multiple wireless technologies such as WiFi and 4G/5G “to achieve the best possible reliability and performance for demanding Industry 4.0 use cases”.