Ericsson has struggled over the past year, and in October the company reported its first net loss in four years. The company also is about two years into a cost and efficiency program in which it has to reduce its annual run rate of operating expenses, excluding restructuring charges, to $5.94 billion.
Ekholm, an Ericsson board member, is no stranger to the company’s challenges. However, during last week’s Ericsson Industry Analyst Forum in Boston, at least one analyst that attended the event predicted the company still has some dark days ahead if it doesn’t start to embrace more open source models in anticipation for 5G deployments.
Elisabeth Rainge, research vice president of IDC’s Communications Service Provider Group, believes the company will have to rely on some of its customers like AT&T and Telefonica to help push it forward in areas like open source and analytics where its current product lines have some gaps. “My hope is that the strong leadership of Ericsson’s customers like AT&T and Telefonica will help Ericsson to quickly and effectively shift its teams, practices, and portfolio to an updated model where the Ericsson Cloud team is already taking key steps,” Rainge said in an email.
However, Sarah Wallace, director of service enablement, AI and analytics at IHS Markit Technology, said that at least in the OSS/BSS area, she believes Ericsson is emphasizing analytics and the digitization of OSS/BSS for operators, which will be helpful as operators move to virtualize their networks.
Wallace said she believes the digitization of OSS/BSS through analytics will help operators enable different applications and support the virtualization of the network. “The analytics piece of the puzzle will become more sophisticated over time through machine/deep learning, allowing for even more automation,” she said.
When Ericsson announced that Ekholm would be the new CEO starting in mid-January, his appointment was met with mixed opinions. Investors said that on one hand Ekholm would be very familiar with the company’s challenges and struggles because of his history as a member of the board. But on the other hand, they said he also might be part of the problems that have plagued the equipment company and contributed to its current predicament.