Ericsson – growth in a changing ICT world

I attended Ericsson’s North American industry analyst day and was pleased to see their progress in transitioning app-powerthemselves into the new world of mobile networks where apps ultimately drive the change. They're also getting ready for 5G networks.

As most readers are aware, mobile networks are making a steady march toward ever faster speeds even in the current 4G generation. There are 800 million subscribers on LTE in 2015, experiencing 80% subscriptions growth. And video is generating half of all mobile traffic. The question is how this change affects businesses that utilize this platform as well as vendors like Ericsson, which already manages 1 billion subscribers, supports 2.5 billion subscribers, and has 118,000 employees. Change at this scale is actually a daunting thing to manage.

Ericsson has traditionally been perceived as a telecom equipment vendor, but they have made a significant transition to become a ICT (information and communication technology) provider where approximately two-thirds of their revenue comes from services and software. They compete more with ICT vendors than traditional telecom vendors. It’s actually ranked 5th on the list of the top global software companies.

The changes stem from two areas. The move toward (a) new technologies underpinning their network, which is becoming 100% IP-based, moving toward 5G and (b) the use cases that leverage cloud-based services and are driven increasingly by new industrial and social uses, such as IoT, and TV and media delivery.

This transformation will continue in the 5G world where apps will be the driver, as opposed to classic voice, text messaging, and legacy M2M communication. (But voice is still important and new strides are being taken such as Wi-Fi calling and high-definition voice using VoLTE (Voice over LTE).)

Enterprises or organizations that create services that run existing services on mobile or landline networks need to examine how they will be transforming their services and processes to use the network in novel ways.

Public safety agencies use classic 911 call systems but with almost ubiquitous mobile data coverage and wide spread smartphone use must ask, "How can we better serve the public with better and faster service?" A not too far fetched analogy is to view how contacting emergency services will be like using Lyft or Uber, using end-user, location, and other contextual information to improve services when it really matters.

ESG recommends that enterprises view the mobility system as a platform that hosts apps and services, delivered by an underpinning that is fundamentally secure and dynamically scalable. Then they can engage their mobile operator or perhaps firms like Ericsson itself to evaluate what it takes to make that transformation.

It’s important to remember that the heritage of telecom is reliability, and those who have experienced outages on some public cloud services are aware of how difficult it is for even the largest cloud operators to provide high service levels.

Here are some examples that illustrate the wide range of solutions that their new mobile systems provide or utilize:

  • Hypercale data center for telco clouds. At the core infrastructure level, Ericsson offers a hyperscale data center system (HDS 8000) that uses Intel’s rack scale architecture where you can swap out elements to upgrade easily. It uses an architecture you would expect within Amazon Web Services that can now run in telco clouds and eventually in enterprise clouds. I find this particularly exciting since it takes hyperscale cloud architecture economics and makes it available for those who do not have the expertise that Google or Amazon has.
  • Better indoor coverage for buildings. For enterprises that need better coverage for buildings (offices or shopping centers), Ericsson offers its Radio Dot system, a very small hardware device for providing indoor coverage within buildings. We’re no longer just using mobile outdoors “on the go” but are using primary voice and data devices while we’re within buildings.
  • Internet of Things (IoT). Another example of industrial application is IoT riding atop cellular. Although cellular has traditionally been viewed as working best in outdoor coverage and with limited battery life, new systems are now promising extremely long battery life, which can exceed 10 years for some IoT devices. Although some of this obviously depends on hardware, software that drives the network, such as Network Software 16B, is also instrumental in delivering better IoT support and power management. IoT leverages many networks, ranging from Bluetooth and Wi-Fi to wired Ethernet, but cellular mobile data needs to be in the equation.
  • Infrastructure and platform-as-a-service. Ericsson has cloud platform provider offerings, including their core Ericsson Cloud System, and a newer PaaS technology via its partner Apcera. It even provides a Cloud DVR solution that powers 50% of the pay TV cloud DVR today. This is one of the critical new foundational areas for the future when apps and services become the key driver for innovation.

So overall, it’s good to see Ericsson adapting itself to provide new modern solutions. One Ericsson executive stated that one of the elements of Ericsson’s DNA is perseverance, and I feel it is a good quality that will guide it in this time of change.

In this age of cloud computing and quick-to-deploy apps, it’s so easy to try something new, and if it doesn’t work as planned, the project gets abandoned and one jumps to the next shiny object.

In contrast, it’s good to have a partner like Ericsson, which exhibits perseverance, since customers need an ICT vendor who takes a long view.

ESG Validation Marketing Guide
Topics: Networking Enterprise Mobility