Ericsson restructures to target enterprise growth opportunities

It shouldn’t be a surprise to anyone that Ericsson’s latest restructuring has resulted in the creation of an enterprise division, called Business Area Enterprise Wireless Solutions. As the name suggests, it will focus on providing wireless technology solutions direct to business customers.

I remember being at an Ericsson analyst day in New York maybe eight years ago when the idea of beefing up direct enterprise business was discussed. The recent acquisitions of Cradlepoint and Dedicated Networks illustrate it is now happening.

Indeed, the current CEO of Cradlepoint, George Mulhern, will be Senior Vice President of the new division. Ericsson’s ongoing $6.2bn acquisition of Vonage will also be part of enterprise business, which forms quite an interesting portfolio for the Swedish vendor.

What Ericsson clearly doesn’t want to pass up — irrespective of the shift it causes in the competitive landscape with communications service providers (CSPs) — is the growth potential for private networks in the coming decade.

But I suspect that potential competition is less of a problem for CSPs than some might think. The linear format of the traditional telecom supplier landscape is already dead and gone; today’s ecosystems are more commercially complex and are set to become more so.

Many technology firms are now suppliers, service providers, consultancies, professional service companies… The list goes on and several CSPs are starting to seriously beef up their IT capabilities and sell that to other companies. It is undeniable that enterprise markets are seen as the new growth opportunity for the wider communications industry and realizing those new revenues is going to take some pretty serious transformational work.

For the last year or so Ericsson has been very focused on developing solutions for use cases associated with Industry 4.0, such as automated manufacturing facilities and warehouse robotics.

This current restructuring falls in line with that ongoing strategy, but also sends a message that Ericsson is not incumbered by how it delivers those solutions, or by which part it provides. It could offer a full solution, straight to the enterprise customer, or just a module of software to enable a service provider customer to deploy a wider solution for an enterprise: Ericsson is covering all the bases.

The move is part of the bigger ‘telco to techco’ story. And as some CSPs start to look at developing and providing their own IT technology, they need to look at the flexibility of their sales ability for post-sales services and products beyond their core connectivity solutions.

One key asset MNOs have in their pocket in the newly developing landscape of private networks is spectrum. In many cases spectrum allows them to be the only companies deploying 5G mobile private network solutions.

It will be very interesting to see how this pans out over the coming years in different geographies and how the regulators re-access the role of companies like Ericsson in the mix as service providers in their own right.