The world is facing enormous challenges with environmental issues, resource scarcity, inequality and stalling productivity. We believe that critical networks will be a crucial solution in responding to climate change through more efficient use and re-use of the world’s resources to providing more inclusive access globally to work, healthcare and education and to restoring productivity growth by bringing digital to physical industries.
Our industry is undergoing profound changes. Industrial automation and digitalization are increasing customer demand for critical networks with a trend towards open interfaces, virtualization, and cloud native software. This will revolutionize how we design, develop, deploy, manage, and sell our products and solutions to an expanding market of Communications service providers, webscales and enterprises.
We create technology that helps the world act together.
Our strategic commitments are founded upon six strategic beliefs:
- Networks are playing an increasingly important role in society. This is allowing us to extend our focus to serving critical networks beyond CSPs.
- Critical networks are built based upon a best-of-breed approach with network elements selected on a best performance per Total Cost of Ownership (TCO) basis.
- Technology leadership underpins momentum and financial returns in critical networks.
- Establishing technology leadership in some segments requires us to anticipate, shape and invest in the next technology window and where there is no clear path, we will reassess segment participation.
- Value in critical networks is migrating away from monolithic systems towards silicon, software, and service, and will be captured through different business models.
- Sustained investment in long-term innovation enables us to take the long view.
Against the backdrop of our six strategic beliefs, Nokia’s overall commitment is to
Deliver critical networks through technology leadership and trusted partnerships
We have focused our strategy on four strategic commitments that define our role in an evolving market:
1. We are a trusted partner for critical networks
The trends show that networks will play an increasingly important role for both society and the economy. They enable more and more mission-critical functions for both consumers and businesses. Value creation opportunities come from a deep, trusted partnership with our customers. For CSPs, for enterprises both directly and through CSPs, and for webscales.
3. We capture the value shift to cloud and new business models
We see networks evolving to further optimize performance to cost, and we also see new business models developing, such as X as-a-service. We are positioning ourselves to capture growth opportunities by investing in O-RAN and cloudification, and building a winning proposition in security, automation, and digitalized operations.
2. We focus on technology leadership in each of our businesses
Cost and performance remain the top priorities for our customers. They build their critical networks based on a best-of-breed approach. In our highly competitive industry that is based on scale, technology leadership is also needed to underpin momentum and financial returns.
4. We create value with long-term research and intellectual property
Sustainable technology leadership requires us to anticipate, shape, and invest in the next technology windows. Our innovations and research assets and intellectual property will provide both the technology and the financial platform we need to be successful over the long term.
Operating model to execute the strategy
Nokia’s renewed operating model is designed to enable the delivery of our strategic ambitions, with a lean corporate center enabling fully accountable business groups.
Nokia has four business groups structured around customer offerings. Each business group aims to become a technology and market leader in their respective sector. The business groups are tasked with demonstrating a clear route for delivering shareholder value with return on capital used as a key metric.
Our goal is to better align with the needs of our customers and through that increase accountability, reduce complexity and improve cost-efficiency. We have implemented a more rigorous approach to capital allocation and will invest to win in those segments where we choose to compete.
Nokia’s four business groups each have a clear mission and have been empowered with the resources and accountability to achieve their goals:
Focused on regaining technology leadership in 5G, as well as keeping its leadership in O-RAN and vRAN, while maintaining scale with CSP customers and growing its private wireless business with enterprise customers.
Focused on the building blocks and essential solutions of critical networks across all customer segments, using its technology leadership in IP Networks, Optical Networks, Fixed Networks, and Alcatel Submarine Networks to drive digitalization across all industries.
Cloud and Network Services
Focused on creating value for both service providers and enterprise customers as demand for critical networks accelerates, leading the transition to cloud-native software and X as-a-service delivery models.
Focused on monetizing and growing the value of Nokia’s intellectual property and licensing revenue by investing in innovation and its world-leading patent portfolio as well as pursuing other licensing opportunities.
Our strategy review
We shared our strategy update in three phases: read more below.