Nokia unveils a new SaaSy software strategy

Finnish kit vendor Nokia has decided it’s time telecoms software was delivered on an ‘as-a-service’ basis.

SaaS (software as a service) has been around for years but has been mainly ignored by the telecoms sector. One reason for this is probably that a lot of it has been delivered as part of ‘closed’ systems from the likes of Nokia. With the advent of OpenRAN, however, the culture around telecoms tech is evolving rapidly and operators are expecting a lot more flexibility these days.

So it seems Nokia has decided to try to get ahead of the game by making a big thing of its move to SaaS. This has the additional advantage of putting pressure on Ericsson, which is arguably more exposed to the telecoms software market, to follow suit or seem to be swimming against the current.

Nokia insists this is ‘a natural evolution of Everything-as-a-Service, a key element to Nokia’s overall strategy’. Being able to subscribe to software as you need it, as opposed to shelling out on a big up-front purchase, certainly has appeal. Whether it represents a lower total cost of ownership, however, is another matter, but operators will presumably appreciate being given the choice.

One product – Nokia Data Marketplace – is already available on a SaaS basis and we’re told NetGuard Cybersecurity Dome and Nokia Anomaly Detection will soon follow. Nokia reckons the SaaS addressable market, comprised of CSPs and enterprises, is valued at $3.1 billion and has an annual growth rate of approximately up to 30%.

“The convergence of 5G, cloud native software and SaaS creates a great and fast-growing opportunity for Nokia,” said Raghav Sahgal, President of Cloud and Network Services at Nokia. “With the groundwork we’ve already been laying, our SaaS delivery framework is in a very strong competitive position. It enables a combination of rapid time to value with on-demand access for Nokia SaaS applications and low cost of ownership, based on a pay-as-you-go / pay-as-you-grow commercial model. This is a multi-year journey and we are going at it aggressively.”

Beyond the statement of intent and throwing down the gauntlet to its competitors, it’s hard to tell how significant this announcement is at this stage. Nokia says loads of operators love the idea but there must be a reason the telecoms sector hasn’t clamoured for SaaS until now. A lot of the software it uses is very difficult to chop-and-change so might as well be bought the old-fashioned way. How Nokia counters that objection will be key to the success of this strategy.