Nokia-Siemens deal gives enterprises better upgrade path: experts

SearchMobileComputing writes about the recent Nokia (NOK) and Siemens (SI) deal, which "according to experts, enterprises using gear from the newly formed Nokia Siemens Networks could soon reap benefits by taking advantage of newer technologies from a convergence heavyweight."

Jack Gold at J. Gold Associates said, "At the end of the day, it makes a lot of sense." Gold believed "combining the assets of both companies will keep the two former competitors going strong."

According to the article, Nokia and Siemens predicted "the pairing will make them the market leader in fixed-mobile convergence."

Gold thought that it should be "business as usual" for Nokia or Siemens users, and "the merger could provide companies a better upgrade path with more options and newer technologies." He said, "It provides them with stability and capabilities they didn't have before. If I were a carrier or user infrastructure person, I'd say, 'Ah, good!'"

Jeff Heynen at Infonetics Research, agreed that "enterprises may be relieved by Nokia and Siemens' shaking hands, which could open a new door to convergence." He said, "As network operators converge their wireline and wireless networks to more efficiently deliver voice, data and video services, manufacturers have to join forces to create the scale and expertise necessary to provide end-to-end support. What this joint venture brings is experience and success in both wired and wireless networks. More importantly, for the world's largest operators, it gives them one throat to choke when the inevitable problem arises."

Infonetics Research analyst Richard Webb added that "the deal will not really affect enterprises today but will eventually help push quadruple play and fixed-mobile convergence into more organizations." He said, "The focus of the Siemens-Nokia deal is on quadruple play broadband and fixed-mobile convergence, both of which have shown up on our recent studies as being very much at the forefront of carriers' strategic thinking. A Siemens-Nokia partnership looks to be a genuine symbiosis, without too much overlap. In our tracking of the radio access network equipment market, Nokia is definitely A-list, especially in the 3G segment, and combining this with the strength of Siemens in the long haul and core and edge fixed networks will create a carrier network heavyweight that could be more than the sum of its parts, a case of 2 + 2 = 5."

Craig Mathias at Farpoint Group opined "the merger was a reaction to the recent Alcatel-Lucent deal and is likely to be one of many joint ventures going forward." He remarked, "The name of the game in a relatively mature business environment -- with a corresponding low innovation rate -- is bulk and lower costs, and that's what's happening here."

Avi Greengart at Current Analysis, agreed the long-predicted coupling "just makes sense." He commented, "Nokia gets the vast majority of its revenue from handsets, so spinning out infrastructure should give its core handset business more management attention. However, neither company wanted to simply sell off their infrastructure units outright because there are synergies that can be attained with their existing line of business."

Daniel Taylor at Mobile Enterprise Alliance stated "the merger shouldn't mean much to enterprise users just now, and it will be carriers that take notice first." He said, "This is about networking hardware and software sold to the carriers. Let's keep in mind that Nokia's strength has been in the handset, not in the back-end telco equipment. The merger of Alcatel and Lucent puts pressure on the smaller players, and two of them have combined in a joint venture."

Taylor pointed out that "Siemens has been looking for a new direction with its business unit after selling off its handset business last year. On the IT side, Siemens already works in a joint venture with Fujitsu."

He also noted that "the merger should not affect the enterprise, because Nokia will still control its dominant handset unit; Nokia still has an enterprise business unit, and Siemens is keeping its own business unit that sells PBXs and networking equipment; and Nokia and Siemens will remain separate companies with distinct enterprise offers and channels for other divisions."