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Nokia amd Siemens network merger - Good news for WiMAX?
Today's business headlines announce a $31.6 billion merger between telecom vendors Nokia and Siemens. This is good news for smaller WiMAX vendors in the near term.
First, the merger points to the decline and fall of legacy telecom vendors. The need for consolidation points to the decline in demand for the traditional Class 4 and Class 5 switches that brought in billions in sales per year in the pre-VoIP days.
No one buys those switches any more and what keeps these types of vendors alive is maintenance contracts on those aging switches. As telecom moved into the internet age, other smaller, newer vendors seized the IP related markets (routers from Cisco and Juniper, for example) or servers (Sun for example).
Legacy vendors have failed to seize significant market share of VoIP gear (compare Lucent and Nortel to Metaswitch or Broadsoft in VoIP related platforms). Second, the big internal question for the new merged entity will be "whose gear and teams will prevail?" Most past big mergers witness about a year of indecision and in-fighting before product strategies are settled upon.
Word to the wise: don't buy WiMAX gear from any company involved in a big merger as ongoing product support will be questionable. You may find the cornerstone of your infrastructure cancelled due to infighting in the newly merged entity.
Good news for new, smaller vendors: you have about one year of breathing time to seize WiMAX market share where this merger holds those legacy vendors in a state of limbo.
Frank Ohrtman
WMX Systems
