In an interview with Telecom Review, Geoff Hollingworth, Head of Product Marketing, IT and Cloud talked about Ericsson's could strategy and its role in the cloud domain.
What is Ericsson's cloud strategy?
The largest internet companies have changed how they buy, build, operate, govern cloud and have created a different outcome and economic system. With Intel we are productizing what they have started to enable the same on private premise where required and interworking with public cloud where beneficial under one governance. We need to bring the same accessibility and economic efficiencies to prepare for the connected everything and ultimately 5G.
What are Ericsson's expectations for the future of cloud?
The future internet will have very different use cases from the current internet as all businesses fully connect all assets. Governance, security, localization, performance are all required pre-requisites when connecting business, or mission, or life critical applications. Given the size of each industrial application and the real-time requirements of the mission critical ones, requires cloud to be distributed throughout the network. The scale of connectivity from what we have today will be 10 to 100x and as such we need to have predictable, accessible, trustworthy infrastructure that continuously takes cost out of the model.
How can the different business benefit from cloud services?
By removing the inherent static nature of digital infrastructure and changing it into a homogeneous set of on demand services that are highly accessible enables business to increase flexibility, lower overhead and thus radically improve economic performance
What are the challenges facing vendors in the cloud domain?
The traditional approach of selling traditional IT is end of life. Incumbent vendors have to adopt the new approach which is sometimes difficult when businesses need to maintain existing margins. Adopt the new way or die.
What are Ericsson's main focus areas in the cloud domain?
We are leading the creation of a new open way to create cloud that is designed for the next generation demands. We are leading this with Intel and Intel Rack Scale Design and have the first commercial product with the Ericsson Hyperscale Datacenter System 8000.
What is Ericsson's current position compared to competition in the cloud domain?
In our existing telecom market we are recognized as the leaders in Network Function Virtualization (NFV), the telecom process for adopting industrialized cloud across the whole network. In the new Intel Rack Scale Design market we are leading with Intel the adoption in the market. As skylake/purely becomes available in the 2nd half of 2017, we see this adoption accelerating across all industries.
Ericsson announced the appointment of Indranil Das as Head of IT & Cloud for region Middle East.
Das will bring his vast expertise in the IT & Cloud segment to the region. His responsibilities include driving business growth and capturing market opportunities within the Middle East and Turkey region in the area of IT & Cloud within Ericsson.
Das started his career with Ericsson in 2011 as the vice president of Ericsson Global Services in India. He was part of the high performing team that established the IT & Cloud Practice in India.
"We are pleased to welcome Indranil to our leadership team in the region. With the continuous evolution of the Networked Society, digital transformation has become inevitable. Indranil and his team will work to bring our innovation in the IT and Cloud area closer to our customers," said Rafiah Ibrahim, head of Ericsson, region Middle East and East Africa.
Das added: "The IT and Cloud Unit forms a vital part of Ericsson's business, and I am very excited to join the team in the Middle East to further develop this particular segment of the Ericsson offering in the region."
Ericsson president and CEO Borje Ekholm said the company is "reviewing its priorities in order to set the future direction of the company", in a statement revealing uninspiring results for the fourth quarter of 2016.
Ekholm, who took up his position less than a fortnight ago, said "key teams" in the company are already conducting the review, which aims to "secure quality of decisions and speed in implementation once decisions are made", and to refine "the strategy to focus investments into areas where we both can and must win."
The executive also said: "Stability will be key to establishing a strong base for future growth" in the near term. This means "prioritizing profitability over growth", but also working "on efficiency and effectiveness across all operations".
Ericsson also trimmed its dividend, stating "the board believes it is prudent to align the dividend level with 2016 earnings adjusted for restructuring charges and the current market outlook". It noted it aims to "increase the dividend over time as our performance improves".
The company is taking action after reporting a loss attributable to shareholders of SEK1.6 billion ($181 million) in Q4 2016, compared with a prior-year profit of SEK7.1 billion. Revenue in the recent quarter was SEK65.2 billion, down 11 percent from SEK73.6 billion in the comparable period of 2015.
Revenue was impacted by weaker demand for mobile broadband, especially in markets with weak macroeconomic environments. IPR licensing revenue also declined year-on-year, though the comparison is skewed by an agreement with Apple which boosted IPR income in Q4 2015.
Sales in the networks business decreased 13 percent year-on-year to SEK32.4 billion in Q4 2016, which was mainly attributable to the reduction in IPR revenue. However, core network sales also declined as lower demand for legacy products was not offset by growth in Ericsson’s new portfolio.
Some hardware deliveries previously planned for Q1 2017 were also brought forward on customer request, boosting the fourth quarter performance.
Global Services sales decreased by 4 percent to SEK29.4 billion, with its professional services impacted by a "lower managed services business in North America where a contract has been renewed with reduced scope" - a new deal with Sprint was announced in July 2016.
For the full year, net income of SEK1.9 billion was down from SEK13.5 billion in the prior year. Full year revenue fell from SEK246.9 billion in 2015 to SEK222.6 billion in 2016.
Qualcomm Technologies Inc., a subsidiary of Qualcomm Incorporated, AT&T and Ericsson announced plans to conduct interoperability testing and over-the-air field trials based on 5G New Radio (NR) specifications being developed by 3GPP, which will form the basis of the global standards. The trials intend to help move the mobile ecosystem to faster 5G deployment based on standards-compliant 5G NR infrastructure and devices once 3GPP completes the first release of the official specifications, which is expected as part of Release 15.
The trials will support operation in millimeter Wave (mmWave) spectrum, aiming to accelerate commercial deployments in the 28GHz and 39GHz bands. In the trials, the companies will showcase new 5G NR mmWave technologies that utilize wide bandwidths available at these higher frequency bands to increase network capacity and expect to achieve multi-gigabit per second data rates. These technologies will be important to meeting the increasing consumer connectivity requirements for emerging consumer mobile broadband experiences such as virtual reality, augmented reality and connected cloud services. Additionally, the proliferation of 5G NR mmWave technology can make it more cost-effective and easier for multi-gigabit internet service to reach more homes and businesses.
The trials will utilize device and base station prototype solutions from Qualcomm Technologies and Ericsson respectively, along with spectrum from AT&T, to simulate real-world scenarios across a broad set of use cases and deployment scenarios. The trials will employ 3GPP 5G NR Multiple-Input Multiple-Output (MIMO) antenna technology with adaptive beamforming and beam tracking techniques to deliver robust and sustained mobile broadband communications at the higher frequency bands, including non-line-of-sight (NLOS) environments and device mobility. It will also make use of scalable OFDM-based waveforms and a new flexible framework design that are also expected to be part of the 5G NR specifications. The trials are expected to yield valuable insight into the unique challenges of integrating mmWave technologies into mobile networks and devices.
The interoperability testing and trials, which are planned to launch in the United States starting in the second half of 2017, are intended to track closely with, as well as help accelerate, the first 3GPP 5G NR specification that will be part of Release 15 - the global 5G standard that will make use of both sub-6 GHz and mmWave spectrum bands. Tracking the 3GPP specification is important because it promotes adherence and validation with the global 5G standard, accelerating the time to standard-compliant devices and infrastructure. Focusing on the 5G NR standards also should validate that the technology will work correctly with any future 3GPP 5G NR updates.