IBM and Nokia Collaborate on Private 5G Managed Offering

By Patrick Moorhead - March 2, 2023

On this episode of The Six Five – CXO, hosts Daniel Newman and Patrick Moorhead welcome Andrew Coward, IBM General Manager, Software Defined Networking and Pasi Toivanen, Senior VP Mobile Networks at Nokia.

Their discussion covers:

  • IBM’s newest private 5G managed offering done in collaboration with Nokia
  • The benefits of private 5G for enterprises
  • CSPs’ utilization of leveraging 5G connectivity and what it means for the enterprise
  • IBM’s and Nokia’s lasting partnership
  • What’s ahead for their collaboration

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Patrick Moorhead: Hi, this is Pat Moorhead and the Six Five is live in the IBM booth here at Mobile World Congress 2023. Daniel, how about the excitement this year? I mean, are we turning the volume level up here or what?

Daniel Newman: Yeah, I feel like it’s been thematic through these conversations that we’ve had. But you know what? We’ve been in both meetings publicly and privately, talked to CEOs from across the industry, and it’s been really positive. The energy, the feeling. While there’s a lot of pessimism in some of the media narratives, the optimism that we’re hearing from these leaders of business and industry make me feel like things are going really well, and obviously, mobile and connectivity makes the world go round.

Patrick Moorhead: That’s right. And let’s introduce our guests, Andrew and Pasi. Great to see you. Welcome, first timers to the Six Five. But I have to tell you all, we’ve had a ton of IBMers and a ton of folks from Nokia on the show, so thank you for coming up.

Andrew Coward: Thank you.

Pasi Toivanen: Thank you very much. Pleasure to be here.

Patrick Moorhead: Thanks.

Daniel Newman: So Andrew, let’s get started. You recently made a note of the new partnership with Nokia around 5G. Talk a little bit about what that announcement was and what this partnership is for you.

Andrew Coward: Yeah. Private 5G is becoming really important to really deliver the 5G experience into warehouses, industrial manufacturing environments, anywhere where the public 5G network really isn’t getting or where you need really tight security. And so with that, obviously there’s multiple components that have to come together. The journey that IBM has been on over the last couple of years has been to come to market with some pretty interesting orchestration products that have been picked up by major telcos, major service providers, analytics and connectivity products that, really, we think are changing the world. And to do that, we have to have partners, and the partnership piece is really key. So the private 5G offering is really a combination of the amazing radio technology that Nokia provides together with the orchestration management that we might be improvising.

Patrick Moorhead: So Pasi, great big huge splash that Nokia made. I mean, new brand, new products, new services. You even went out of your way to explain to us analysts about your objective, strategy and vision, which by the way, I really appreciated. Can you talk about some of the benefits of, you hit on a few of them, but if you can expand upon the benefits of 5G to enterprises?

Pasi Toivanen: For sure. But first, thanks for recognizing our new brand. I mean now, both-

Patrick Moorhead: It’s hard to escape. It’s everywhere.

Pasi Toivanen: …I love it. I mean, my journey started already on Sunday afternoon when we had the media event. And when it started to resonate and follow that, I have been so excited about it. But about the actual question. Yeah, for me, it’s a foundation. It’s a foundation for those millions and millions of enterprises to start a digitalization journey.

Patrick Moorhead: Right.

Pasi Toivanen: Start living the automation, having that 5G network, giving that robust framework network to run the the operations more smoothly, more efficiently, more automated way.

Patrick Moorhead: Yeah, and I mean part of the beauty of 5G too is that you can almost have it your way, right? If you want high bandwidth, low latency, you can get that, or you get everything in between that seems like it would be a benefit to enterprises. Well, I’ve heard of a lot of smart warehouse companies tell me, or companies that are building out smart warehouses is, “Hey, boy, it’s great to be on one level of communication.” Right? As opposed to five or six different protocols spread throughout everywhere. Does that resonate with you at all?

Pasi Toivanen: Absolutely. I have been personally involved, I cannot mention the name of, I mean, similar cases.

Patrick Moorhead: Yeah.

Pasi Toivanen: And when you see the excitement of the customers when they are able to do the wrong inventories over the warehouse, I mean, that is getting so concrete. And when they are taking the calculator, doing the benefit calculation, it is just amazing how they are then re-channeling the assets and investments to soup up prime, new business launching.

Patrick Moorhead: Yeah. All I can think about is cycle counting and retail, and for how long we’re in big warehouses.

Pasi Toivanen: Yes.

Patrick Moorhead: How just inefficient that is and how you have to bring in-

Daniel Newman: Did that as a high school job, okay?

Patrick Moorhead: Your old company, NCR?

Daniel Newman: Yeah, exactly.

Patrick Moorhead: But I’m saying how, eventually, whether it’s drones, whether it’s computer vision, I mean, we can change and create so much efficiency and expediency and experiences. Andrew, I’d love to kind of double click or kind of lean into this idea. As an analyst, communication service providers, they were really kind of struggling to figure out the 5G monetization.

Andrew Coward: Right.

Patrick Moorhead: And so with what you’re offering now, you’re bringing the opportunity for private 5G networks to be delivered to enterprise. Talk about that practically, both from the value chain for the CSP, and then of course what the real life benefits are for the enterprises.

Andrew Coward: Right. Well, sure. From a CSP perspective, it’s pretty simple. The only growth they’re really going to have is going to be on the enterprise side. And for the most part, that requires new devices connecting to the network.

Patrick Moorhead: Yeah.

Andrew Coward: So getting to that point is really important. Now, the other question is, well, why then would an enterprise want to have lots more devices connected to 5G? I mean, after all, wifi kind of works in many environments. But think about how these, particularly the industrial environment, warehouse environments changing so much. Remember how we used to carry a tablet around, or in an industrial environment, you’d go to a terminal and you type some stuff?

Patrick Moorhead: Sure.

Andrew Coward: And you go and look. You have it in your phone now, and your phone is doing that. But the application on your phone is so much more than your personal phone because that application has augmented reality on it. If you’re fixing something, it’s now going to show you what you should tweak and what you should do. There’s all kinds of different things that are going to play out that require these tools, really, that are a 5G connector.

Patrick Moorhead: Yeah. So what you’re doing, essentially, is solving a higher order problem, which might be discussed at the C-suite, which could be people challenges with frontline workers, whether, “Hey, we can’t get enough workers to come in,” or, “Maybe we’re trying to augment some of the work that can be done.” And also, I can imagine supply chain, which is a huge C-suite conversation right now.

Andrew Coward: Yes.

Patrick Moorhead: By getting a better handle on where is my stuff, even if it’s work in process. And we’ve talked to manufacturers who, listen, I worked back in the mid-80s, where robotics, where you’d put a piece of aluminum in and press a button, that was robotics then. But now, the idea that we have machine learning, good machine learning, object recognition at the edge, changes the game and enables these manufacturers to go in and set up their lines much more quickly. Half the cost of manufacturing is setting up a new line. And that’s where I’ve heard big benefits from 5G coming to those environments.

Andrew Coward: That’s right. And it’s also about the flexibility of those devices. To your example, that made one thing.

Patrick Moorhead: Yes.

Andrew Coward: Right? CNC machine today can make many, many things off our plan.

Patrick Moorhead: Right.

Andrew Coward: And it needs to get the plan from somewhere.

Patrick Moorhead: Right.

Andrew Coward: And what it makes in the morning might be very different from what it makes in the afternoon.

Daniel Newman: Yeah. So let’s kind of tie this all together. So here’s a new offering, a new tie-up. By the way, it’s great to see Nokia out there really freshening up the brand. Of course, IBM’s had a really great run. We’ve had Arvind on the show, we’ve had a number of the lead executives.

Patrick Moorhead: Thank you for making us look really smart.

Daniel Newman: Yeah.

Patrick Moorhead: Because Dan and I both called IBM like, “Watch this spot.” So thank you.

Daniel Newman: Yeah, we did. We made the call early, that the hybrid and AI move was going to work.

Patrick Moorhead: Yeah.

Daniel Newman: But with all that in mind, where does this partnership evolve to? How does it get more momentum, and do you see a future that you could share?

Andrew Coward: Sure. I think, just going around the show, there are so many separate conversations going on now at different discreet parts of the industry. We talked about private 5G. There’s another conversation going on around eSIM. Another conversation going on around slicing, another conversation going on in a cloud.

Daniel Newman: Sure.

Andrew Coward: And so our journey is really about taking all of these elements and connecting them and making them part of one solution. Enterprises don’t think about these discreet components. They say, “How do I get this application to work on my shop floor?”

Daniel Newman: Yeah.

Andrew Coward: And we have to be able to answer that question cohesively. And so our relationship is really about extending that all the way through from the edge device to the cloud.

Pasi Toivanen: Indeed. And I have had, only here in Barcelona, I think already individual tens of meetings. It has been long, long, long days.

Andrew Coward: Yes.

Pasi Toivanen: And not a single one of those meetings have not been touching this opportunity of enterprises. Whether I talk to CSPs who see this as a new way of developing value in their business models, getting value out from their network-

Daniel Newman: Right.

Pasi Toivanen: …extending with the new capabilities. If I talk to enterprises directly, I mean, or I already mentioned that the scale of opportunities, astronomic. This is the starting point, and you will hear more about us and about participles in coming months and quarters.

Patrick Moorhead: That’s a great place to put a pause in the conversation, and I want to thank both of you for coming on the show. First timers, but your companies are veterans at this point. We’d love to do a follow-up with you when appropriate in the future. We’d love to know how the relationship is going, how you’re working together to help solve problems for the enterprise. So I really appreciate that.

Daniel Newman: And by the way, Pat, that’s such a good point. So often you and I provide our analysis on these tie-ups.

Patrick Moorhead: Yeah.

Daniel Newman: And we say, “Great tie-up.” You see a lot of, “Great job.” But then it’s like, “What happened with it?” And of course, big companies like IBM and Nokia partner every single day. So we should put a pin in it, we should come back to it. But I love, I think what one of you just said, it’s not about buying technology to solve technology problems, it’s about buying technology to solve business problems. It sounds like that’s what you’re doing.

Andrew Coward: Yeah.

Daniel Newman: Very exciting. Great MWC. Thank you both for joining us here at the show. Thank you very much.

Pasi Toivanen: Thank you very much.

Daniel Newman: All right, everybody there you have it for this episode of the Six Five here in the IBM booth. For Patrick and myself, we appreciate you tuning in. Hit that subscribe button, join us for all the episodes here, all the other episodes that we do each and every week with the best executives, most interesting companies, and of course, always moving the tech industry forward. Look, Pat, it’s time to say goodbye.

Patrick Moorhead: Take care. See you later.

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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.