Nokia is swapping out leadership of its Network Infrastructure (NI) business unit in the latest move by the vendor that has it leaning more heavily into its recent Infinera acquisition and greater focus on its networking business.

Current NI head Federico Guillén is leaving that position on June 30, and retiring completely from Nokia at year end. David Heard, who is currently chief strategic growth officer at NI, will assume leadership of that division on July 1, and also join Nokia’s Group Leadership Team.

Heard was CEO of Infinera, which Nokia officially absorbed earlier this year. That deal combined the optical networking market’s No. 3 and No. 5 vendors to better compete against rivals like Ciena and Huawei.

Nokia’s enhanced position is most prominent in North America, where Infinera garnered around 60% of its sales. That includes a strong presence with webscale providers, which Nokia noted is “the fastest growing segment of the market.”

“The Infinera acquisition will accelerate our growth strategy in data centers and strengthen our presence both in North America and with webscale customers,” Nokia CEO Pekka Lundmark noted at the time the deal closed.

Guillén’s departure comes five years after he was tapped to lead Nokia’s NI division. That move came as part of Lundmark’s first move after being named CEO to reorganize Nokia’s struggling operations under an ambitious three-year turnaround plan.

Heard will report directly to Nokia’s new CEO Justin Hotard who took over from Lundmark on April 1. Hotard previously served as head of Intel’s data center and AI group.

Hotard did acknowledge Guillén's leadership during the Infinera acquisition process and Nokia’s sale of its submarine network business. Those were two deals that analysts noted repositioned Nokia’s opportunities outside of its traditional telecom focus.

“Interestingly, Nokia's decision to acquire companies while simultaneously selling certain assets seems like a strategic maneuver aimed at optimizing its business portfolio and enhancing its market position,” Aurojyoti Bose, lead analyst at GlobalData, noted in a report. “This dual approach is primarily focused on strengthening its core business segments, particularly in Network Infrastructure and Optical Networks. … The stratagem seems to be revolving around divesting less strategic businesses and investing in core areas where Nokia sees high growth potential.”

Nokia’s optical focus

In announcing the leadership change, Hotard pointed to Heard’s “deep expertise of hyperscalers and AI-optimized solutions to the business.” The AI space is one that Hotard views with the Infinera purchase as ripe for the picking.

“This is about giving us incremental access in the U.S., which is a high-growth geography, and of course, with hyperscale customers who are driving much of the AI and data center build,” Hotard said during Nokia’s first-quarter earnings call. “And the way I think about the market in AI, particularly with optical is if you look at the build-out of data center, what's happening with AI is it's driving, as we all know, significant new data center build, but it's also driving new connectivity demands between data centers, both whether it's for training or inference or some of the convergence we're seeing with AI reasoning models.”

Analysts are also enthusiastic about future data center and networking spend. Dell’Oro Group is forecasting that data center capex will surge more than 30% this year, driven by a “sustained demand on AI infrastructure and a broader recovery in general-purpose infrastructure for servers and networking.”

More specifically, the optical networking space is showing increased demand. Dell’Oro Group noted that the optical transport market ended last year “on a strong note, growing approximately 45% quarter-over-quarter” during the final three months of the year.

“There is light at the end of this tunnel,” Dell’Oro Group VP Jimmy Yu wrote. “The optical transport equipment market entered a period of revenue contraction in late 2023 and looks to be exiting it in early 2025. The strong fourth quarter growth rate in 2024 is a great indication that supply and demand for optical transport equipment is near equilibrium, meaning the equipment glut is over.”

Hotard gets HPE veteran as chief of staff

Nokia also named Victoria Hanrahan as Hotard’s chief of staff and as a member of the vendor’s Group Leadership Team.

Hanrahan will focus on “driving strategic and operational initiatives, including operational excellence, improving cross-functional execution, and ensuring organizational alignment across the Global Leadership Team.”

Hanrahan previously served in various executive positions at Hewlett Packard Enterprise (HPE), most recently as VP of global marketing for that vendor’s high-performance compute (HPC) and AI business.