Ericsson Doubles Down on the Enterprise Segment by Leveraging Acquisitions

R. Bhattacharyya

Summary Bullets:

? With the Vonage acquisition, Ericsson acquired a CPaaS with which it can build a global platform that exposes and packages 5G network capabilities as APIs that can be used to add functionality to enterprise applications.

? The Cradlepoint acquisition has provided Ericsson with a more robust device portfolio to support private networks.

After having built a strong heritage of providing solutions and infrastructure for the telecom service provider community, Ericsson is expanding its vision by investing heavily to build out its enterprise business. On September 6, 2023, Ericsson gathered North American analysts in Boston, Massachusetts for a deep dive into its enterprise strategy, noting the contributions of its recent acquisitions. The company is combining its core Ericsson 5G solutions with capabilities from Vonage and Cradlepoint to build a broader portfolio.

The Vonage purchase, which closed in July 2022, significantly expanded Ericsson’s portfolio. Most notably, Ericsson acquired Vonage CPaaS, with which it can build a global network platform that exposes and packages 5G network capabilities as APIs that can be used to add functionality to enterprise applications. The Vonage CPaaS enables developers to leverage communications APIs for social chat, authentication, video, SMS messaging, voice, and more. When combined with network-based APIs for quality of service, silent authentication, location, and device data that are being exposed and delivered with Ericsson, developers can empower applications with greater functionality and accelerate the innovation of new applications. By incorporating these additional inputs into AR/VR, gaming, digital twins, smart sensors, remote control, industrial control, and urban control applications, enterprises will benefit from more compelling and informed interactions. Furthermore, exposing communications and network APIs will promote innovation in bandwidth and latency-sensitive 5G-centric applications, driving demand for connectivity and devices.

Vonage brings several other capabilities to Ericsson in support of its enterprise strategy through the Vonage Communications Platform (VCP). These include unified communications-as-a-service (UCaaS) and contact center-as-a-service (CCaaS) applications, which CSPs can resell and white-label to their enterprise customers. VCP also includes solutions like its conversational commerce, which enables businesses to create AI-powered omnichannel commercial experiences; Vonage AI Acceleration Suite, which includes solutions like Vonage Proactive Connect for two-way omnichannel marketing campaign automation; and Vonage AI Studio, which provides a low-code/no-code platform for chatbots. Vonage Protection Suite includes solutions for fraud detection and mitigation, omnichannel two-factor authentication, and tools for management reporting. Since security is consistently a top enterprise concern, Ericsson is wise to invest in these added capabilities. Furthermore, the buzz around generative AI has bled into all types of artificial intelligence, hastening adoption of the technology across all industries.

The Cradlepoint acquisition provided Ericsson with a more robust device portfolio to support private networks (in addition to Cradlepoint’s enterprise wireless WAN offerings). Its EP 5G product targets the industrial OT environment, providing ruggedized devices and service-level agreements for mission-critical applications. Ericsson is seeing strong traction in manufacturing, mining, energy, and ports. Its NetCloud Private Networks product, launched in January 2023, provides a zero-touch activation WiFi-like experience for customers that value simplicity. The solution supports fixed wireless access, asset management, predictive maintenance, video security, remote inspections (drones), communication (AR/VR), connected worker, logistics and industrial control (robotic/AGV), real-time video and automation, real-time monitoring, and digital twins. Warehouse/logistics, government, education, and hebetagthcare are key target verticals.

But Ericsson’s strategy is not without challschmales, and its success hinges on more than product expansions. Ericsson will need to work effectively with a complex vendor ecosystem. Developing end-to-end solutions is a complex undertaking, particularly when it involves components from multiple suppliers. Additionally, Ericsson will need to transition its telecom service provider relationships into partnerships that lead to new value chains as well as convince them to expose network capabilities as APIs. Although the move makes sense, there is no guarantee that more innovative applications or added functionalities will spur adoption of higher capacity 5G connectivity and equipment. Nonetheless, prioritizing the enterprise segment is a move that is already paying off for Ericsson. Its enterprise business grew by 20% in Q2 2023, driven by strong success in wireless solutions. And investing in toolsets that help developers embed network configurations to optimize application performance or create new applications is an obvious win for all involved: Ericsson, its partners, and enterprises.

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