IoT Strategies

Nokia WINGs It With Global IoT Move

On a WING and a prayer?
If the strategy sounds like it will require some juggling of priorities, the WING launch has received a big endorsement on the analyst side from Alexandra Rehak, who heads up the IoT practice at Ovum Ltd. and who is quoted in Nokia's press release.

"The new offering leverages Nokia's broad portfolio of technologies and strong expertise in network design and management, and should open up business opportunities for operator customers and large enterprises alike," she says.

Clearly, it is still early days for the enterprise strategy and Nokia has already acknowledged that it will require some big shifts, including investment in new sales channels. So far, though, all is going smoothly, says Twist.

"Technological extra-large enterprises are the first set we are targeting and there is a dedicated channel set up to address those, which is delivering the sort of results we said it would," he says. "I can't leak out financial results but we are comfortable the strategy is the right one and that we are addressing the needs of specific groups."

Indeed, Nokia can already boast a few big customer names on the enterprise side, including energy players Oklahoma Gas & Electric, Swissgrid and Washington Gas, as well as mining giant Rio Tinto. Manish Gulyani, a vice president at Nokia's IP and optical networks business, says the company now serves more than 500 enterprise customers in total across the public sector, transportation and utility markets.

It is certainly not hard to see why Nokia attaches such importance to this continued diversification. In November, it predicted that its main addressable market -- worth about €113 billion ($120 billion) last year -- would grow at a compound annual growth rate (or CAGR) of just 1% over the next five years (ouch).

These "adjacent" verticals, by contrast, represent an €18 billion ($19 billion) opportunity forecast to grow at a five-year CAGR of 13%, reckons Nokia.

Even so, if Nokia really is to thrive in the years ahead, it may have to beat the overall market. Igor Leprince, the executive vice president of Nokia's global services business, last September told reporters that only about €1 billion ($1.1 billion) in annual revenues (€26 billion, or $27.7 billion, in 2015) came from enterprise customers. Growing those sales at a 13% CAGR would leave Nokia with about €1.84 billion ($1.96 billion) five years from now on the enterprise side. (See Nokia's Leprince Wants to Be King of Enterprise.)

So if the rest of Nokia's business grew at a 1% CAGR, Nokia would be generating less than 7% of revenues from "adjacent" markets by the end of the five-year plan.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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COMMENTS Add Comment
danielcawrey 2/11/2017 | 8:24:30 PM
Markets Choosing the public sector, transportation and utility markets is a smart move. 

In the past Nokia had to contend with the whims of the ever-changing mobile phone market. Moving into enterprise and having steady clients is a huge shift, but signals the company will be around for a long time. 
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