The move, which comes in the wake of the company's acquisition of Telcordia, helps to identify some of Ericsson's new strategic focus areas and also enables the company to relocate some products and developments, though only a single specific product line is being killed off. (See Euronews: Ericsson Seals Telcordia Deal, Ericsson Signals New M&A Era and Ericsson Closes Telcordia Acquisition.)
BUSS, one of three main organizational units (along with Networks and Global Services) has three main focus areas: OSS and BSS systems; TV & Media; and M-Commerce.
The one product Ericsson is discontinuing as part of this revamp is the consumer Money Service it launched last year in an effort to stimulate the mobile commerce sector in Europe. Now the company believes it is better positioned to help other companies provide such services. (See Ericsson Launches Money Service .)
Why this matters
The move marks the further evolution of the company to focus on a smaller number of key areas. Ericsson's CMO Arun Bhikshesvaran told the London media briefing that the company would be focusing its attention on mobile broadband, managed services and OSS/BSS at Mobile World Congress. (That, of course, makes its core focus areas pretty much the same as Nokia Networks -- see Analysts: NSN Focus Makes Sense.)
The increased focus on OSS and BSS was expected following the Telcordia deal as the acquisition has made Ericsson one of the largest Service Provider Information Technology (SPIT) players globally. Now it can start sending that message to the operator community and look to develop business deals that encompass physical networks, supporting software and IT technologies and relevant professional services. (See Ericsson + Telcordia: What the Analysts Say and Why Ericsson Wants Telcordia .)
However, there are still a lot of loose ends and Bhikshesvaran said there were still some parts of BUSS that could still be shifted into either the Networks or Global Services business units. And while its areas of key focus may be very similar to those of NSN, Ericsson has not (yet) decided to follow its rival's lead by culling non-core product lines. (See NSN Unveils Its Kill List .)
Light Reading asked about the company's fixed-line broadband and optical transport assets that have hardly ever been mentioned by Ericsson since the Marconi acquisition: Bhikshesvaran said they are "alive and kicking … we need to talk more about that." (See Ericsson Buys Bulk of Marconi.)
And there is still no real articulation of Ericsson's carrier cloud strategy: What can it do to help operators become cloud services players? Bhikshesvaran said the company will reveal its cloud enablement strategy at Mobile World Congress and doesn't believe Ericsson is too late in revealing its hand. "You have to come out with the right thing … we will take the cloud and the network to the next level." (See What Carriers Are Missing About Cloud and 5 Takeaways From Carrier Cloud Forum.)
For more on Ericsson's recent activities:
- eAccess Combines 3G/LTE With Ericsson
- Ericsson Ousted From Shared Network
- Ericsson Suffers Margin Crunch
- ZTE, Ericsson End Patent Dispute
- Analyst Acclaims New Ericsson CTO
- Ericsson Puts Focus on IPR Licensing
- Euronews: Ericsson Shrinks Its Top Team
- Bharti Airtel Expands With Ericsson
They seem to be hedging their bets a bit, but it's interesting they chose to house the Telcordia SPIT assets in what was the multimedia group. I wonder if this means Ericsson sees the delivery of video over all various networks as one of the key challenges that its OSS/BSS business needs to solve?
Like Ray, I'm wondering when their cloud strategy will emerge, since the back office integration bit is emerging as key to the success of cloud and Ericsson has certainly assembled a powerful set of assets in that space.