Summary Bullets:
• Nokia’s rebrand is designed to move further away from its mobile device and, to a lesser extent, CSP infrastructure heritage as well as to better position it to appeal to enterprise customers.
• Nokia has identified key medium and long-term trends and how it can play a role, but its B2B strategy needs to be more clearly defined.
Deciding to alter a brand as established as Nokia is not an easy decision, but the solutions vendor has done just that. At the start of 2023’s MWC event in Barcelona (Spain), the vendor has launched a new logo – albeit still with the same name. Nokia’s rational for doing this is clear and understandable: As recognizable as the blue Nokia logo is, it is also irrevocably associated with the company’s heritage as the dominant player in the pre-smartphone mobile handset market.
Nokia’s market focus has shifted and its President and CEO, Pekka Lundmark, has highlighted that sales to enterprises, rather than to telecoms service providers (SPs), would be the biggest area of growth (if not the largest percentage of overall revenues) in Nokia’s future up to 2030. Enterprise sales currently account for around 8% of its revenues, but Lundmark expects that to quickly grow into a double-digit percentage after 21% growth in enterprise sales in 2022, including 49% year-on-year growth in Q4 2022.
Nokia’s pitch to enterprises is potentially compelling. Nokia highlighted its long-term partnership with Bosch among others. In terms of technology, Nokia’s portfolio includes areas such as mobile private networking, 5G, network edge, orchestration, WAN, and LAN, which put it in a strong position to help enterprises achieve transformation in areas such as Industry 4.0 and the metaverse. Nokia can highlight that it is building real-world use cases in these areas, and it is already the most mobile private network customer of any vendor and of any provider with 561 enterprises so far, alongside a strong sales pipeline.
The challenge for Nokia will be in gaining mindshare among enterprises and being seen as a solutions provider more than a technology vendor. The rebranding is a part of this process underlining that the old B2C Nokia of the 3210 days is gone. Nokia will invest in the new branding with advertising aimed at enterprises more than SPs. The provider wants to position itself as the head of a digital ecosystem – a provider of art of the technology stack and a unifier of the whole stack.
This is a grand ambition and Nokia will support it by investment in automating its sales and provisioning processes to make it easier for enterprises to consume its services. It will also invest in APIs both to enable integration between its own and partner platforms as well as in the longer term to enable developers to consume network resources on as on-demand basis – something that Nokia sees a critical to increasing its relevance, and the relevance of next-generation of technologies such as 6G, to enterprises.
What is less clear is how Nokia will address the enterprise market. Its direct sales and professional services capabilities are not yet sufficient to support significant growth. Nokia is proposing a partnership model, and one that takes it beyond working with service providers. This is understandable as SPs are not likely to be the primary beneficiaries of next phase of the digital revolution. But even in new partnerships with global, regional, and vertical system integrators for example, it is not clear what Nokia’s role will be beyond being a technology partner.
Nokia’s rebrand has been well-executed with credible thinking underpinning much of it. But there are key details that will need to be reconciled if the provider is to be fully successful.
IT Connection 