- Nokia is looking to make a name for itself in the data center networking market
- A recent deal with Microsoft shows the ball is starting to roll in the right direction
- VP Mike Bushong dished on its strategy for winning over more customers and stealing major market share
Cisco, you’ve officially been put on notice. Nokia is coming for you. Or, more specifically, your data center market share.
After spending the last few years stealthily bulking up its product lineup and go-to-market machine, Nokia is ready to flex its muscles on the main stage. Its goal? Supplant Cisco to sit alongside Arista Networks as a leader in the data center networking arena. And it looks like things are already headed in the right direction.
Earlier this month, the company inked a marquee deal to supply hyperscale titan Microsoft with data center routers and switches. And Nokia VP of Data Center Mike Bushong told Fierce it has another big announcement coming up next week.
“We’re not in this game to get one big win,” Bushong said. Rather, if all goes according to plan, “this will become a meaningful part of what we do.” But even with Cisco already weakened from intense competition from Arista, Nokia still has a hill to climb.
While Nokia has already proven itself in the telecom industry as a leading provider of mission critical equipment, its biggest challenge in the data center realm is – ironically enough – name recognition, Bushong said.
“Our service provider background is awesome because it’s taught us how to build the most reliable equipment for the most demanding environments anywhere on the planet,” Bushong said. But expanding into the data center arena means developing relationships with a whole new set of customers and partners and building a whole new go-to-market apparatus.
“People don’t know us until they know us,” Bushong said. “The biggest gap between us and our ambitions is people knowing what we can do. Now, what you see with this Microsoft deal is that once we have exposure, people like it and then they double, triple down on the stuff that we’re providing them. That bodes well for our ability to grow inside these types of accounts.”
So, what can it do? Well, Nokia already has a fleshed out portfolio of routing and optical products. And it’s looking to shore up gaps in its switching lineup via a $2.3 billion deal to buy Infinera. That transaction is expected to close in the first half of 2025.
Gameplan
But given we’re not Nokia’s product PR, we were more interested in how it plans to sell rather than what its wares are. After all, there’s a lot of money at stake – money that Nokia, which is facing a slump in its traditional telco business, desperately needs.
Dell’Oro Group has predicted that Ethernet switches for front-end data center networks will generate more than $100 billion in revenue. Switches for AI back-end networks will drive another $80 billion in data center spending over the same period, Dell’Oro estimated.
“The market’s ripe for share shift,” Bushong said. “I look around and I say ‘are we ready to go into battle?’ And I think we are.”
As for its plan of attack, Bushong said Nokia is aiming to win business not just from the handful of hyperscalers out there, but also customers from what it calls “cloud majors” and Global 2,000 enterprises who are building out their own data center infrastructure. Cloud majors, by the way, include hosting and colocation providers, software-as-a-service companies, and gaming and content players.
“This year alone I’ve been in India and Dubai and Brazil and Japan and Korea, I’ve crisscrossed Europe…there’s a ton of growth everywhere in the cloud majors and enterprise space,” Bushong said. “I think we’ve had good traction across a number of different verticals,” including financial services, healthcare, education and the public sector.
But timing matters. Bushong said Nokia is looking to swoop in when these companies are facing one of three key change drivers: natural product replacement cycles; changes in technology (including, but certainly not limited to, implementing artificial intelligence); or changes in the workforce. All three of those instances create opportunities for a newcomer like Nokia to get its foot in the door.
The pitch? “The case I’m litigating is I think there’s unique permission to play because the last 20 years isn’t going to bridge to the next 20 years,” Bushong concluded. “If the stewards of our industry haven’t collectively carried us forward, then ought we not look for different stewards? I think Nokia’s in a unique position to play that role.”