2013/09/13 Strategy Analytics sees Expanding SDN Future for NSN as "mini Ericsson" following Nokia Device Sale to Microsoft
With Cash from Microsoft Nokia can finance NSN Growth and AcquisitionsBoston, MA - September 11, 2013 - After selling its Device business and issuing convertible bonds to Microsoft, it is estimated that Nokia will have about $10 billion in net cash. Nokia’s Solutions and Networks (NSN) - formerly Nokia Siemens Networks - will now represent almost 90 percent of Nokia Revenues. Following its successful restructuring and absorption of part of Motorola's Solutions business NSN has been cash flow positive for four quarters with increasing profits despite a tough market.
NSN is poised for growth in Radio Access Networks (RAN), Software Defined Networking (SDN), Cloud Based Voice and IMS services and - with new investment - possibly in the Infrastructure core. This could create a ‘mini Ericsson’ look alike with a very competitive cost structure
Strategy Analytics Wireless Networks and Platforms (WNP) service new report, 'Will Nokia NSN Become A 'Mini Ericsson' After Selling Device Business to Microsoft?' evaluates how Nokia might expand NSN in several key areas.
According to Guang Yang, Senior Analyst Wireless Networks and Platforms "NSN might do well to consider using some of Microsoft's money to enhance its RAN offering by acquiring one of the emerging Self Organizing Network (SON) vendors or expand its SDN focus". He continued "SDN offers a disruptive opportunity for vendors to break into the market with OpenFlowTM compliant software on 'commodity hardware' and NSN's continued restructuring that moves it away from specialty hardware manufacturing puts it in a very strong position to embrace the low cost SDN model even faster than competitors like Huawei, Ericsson, Alcatel Lucent and Cisco."
Sue Rudd, Director Service Provider Analysis commented "NSN's major weakness is its lack of strong in-house IP software routing and gateway expertise that can add unique value to its 4G 'All-IP architecture and the SDN Control Plane. Strong and distinctive partnerships or even acquisitions in this area will be essential for Multi-Vendor Hetnets, Smart Backhaul, Wi-Fi Roaming and Content Delivery Networking."
For specific examples of NSN’s recent successes and Strategy Analytics speculation about specific potential partners or acquisitions see the full report. Recent blogs that provide additional useful background are: Nokia buys profitable NSN at fire sale price and An important step for Alcatel-Lucent’s LTE overlay strategy
Additional Strategy Analytics analysis of mobile infrastructure requirements can be found in:
'Complete Mobile Infrastructure Player? Did Cisco just add final piece to Mobile Jigsaw Puzzle?' and complimentary Executive Summary. Also See: 'Mobile Operators Virtualize to Win with SDN and Services at the Edge: Executive Summary', the full SDN report and SON Report.
Source: Strategy Analytics
