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The Rise and Fall of Nokia

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Tarun Khanna

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The Rise and Fall of Nokia

By julian birkinshaw , lisa duke.

The case describes Nokia’s spectacular rise and fall, shedding light on the combination of external factors and internal decisions that resulted in the company’s handset business being sold to Microsoft in 2010.During the successful period of growth (roughly 1990 through to 2006), Nokia’s focus on design and functionality gained it a worldwide reputation. It was acknowledged as the first smartphone manufacturer. Through the early-mid 2000s it was the undisputed leader in the global mobile phone business. The case traces the first signs of trouble and the company’s subsequent decline over the period 2005 to 2010. Pressure in the early 2000s from low-end competitors led to early signs of problems. Then of course the game changed in 2007 with Apple’s iPhone and a year later with phones powered by Google’s Android operating system from HTC, Samsung and others. Nokia was initially dismissive of these new offerings but its proprietary OS, Symbian, was ageing badly and its App store (Ovi) was no match for Apple’s. In September 2010 it was announced that American Stephen Elop, formerly of Microsoft, would become CEO. Not long afterwards a partnership with Microsoft was signed which subsequently led to Nokia’s handset business being sold to Microsoft.

Learning objectives

• Understand why good companies go bad; in other words, see how the assets that enable companies to succeed can also be liabilities when the market turns against them.
• Provide insight into the nature of disruption in an established industry and why incumbent firms struggle to adapt.
• Examine the different paths companies should take to respond to disruptive forces.
• Understand the leadership challenge for executives when their performance starts to decline2. To understand the dynamics of change in a fast-changing industry.
• Identify strategies companies can use to adapt quickly to disruptive changes.

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Case Study 4: The Collapse of Nokia’s Mobile Phone Business

• First Online: 30 July 2018

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• Tuomo Peltonen 2  

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This chapter provides a wisdom-oriented reading of one of the most spectacular business failures of recent times: the collapse of Nokia mobile phones between 2007 and 2015. Using executive biographies and other published accounts of Nokia’s organisational patterns, the chapter attempts to offer a more balanced explanation of the processes behind Nokia’s inability to respond to the changing industry circumstances. The following analysis pays attention to the shaping of Nokia’s organisational culture. Company and its new leadership adopted a professional, no-nonsense approach in the aftermath of the problems of the late 1980s and early 1990s. The new generation of managers believed in a rational mindset supported by a bureaucratic organisational form. Leaning on a superior technological competence within the mobile phone sector, Nokia was capable of ultimately becoming the market leader. However, in 2007, with two major players, Apple and Google, joining the business, the established rules of competitive dynamics were irrevocably changed. Focus shifted to software and applications. Nokia’s risk-aversive and closed organisational culture could not respond in a situation where an open search for new innovations and a cooperative internal working mode were needed. An analysis of the development of Nokia’s organisational psyche following the emergence of a new generation of managers and executives highlights the role of local beliefs in using philosophical wisdom in critical circumstances. Nokia and its leadership were not able to abandon the outmoded habits and structures, as these had become integrated with the very identity of the company.

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Peltonen, T. (2019). Case Study 4: The Collapse of Nokia’s Mobile Phone Business. In: Towards Wise Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-91719-1_6

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9 Reasons Why Nokia Failed After Enjoying Unrivaled Dominance

Devashish Shrivastava , Akshat Hawelia

In the annals of mobile phone history, Nokia once reigned supreme with its robust devices and iconic brand. However, as the smartphone revolution took hold, Nokia's fortunes took a sharp turn, leading to a notable decline in its market share and influence. The fall of such a prominent industry leader begs the question: What were the reasons behind Nokia's failure?

This post focuses on the reasons why Nokia failed after enjoying unrivaled dominance in the mobile segment for several years. The ferocious and mighty telecom giant Nokia was well known for its products' hardware and battery life. By understanding the lessons from Nokia's journey, we can gain valuable insights into the rapidly evolving landscape of the technology industry and the critical importance of adaptation and innovation.

For years, it was the talk of the town. User satisfaction with Nokia’s mobiles was globally recognized. The company launched the first internet-enabled phone in 1996, and by the start of the millennium, Nokia had also released a touch-screen mobile prototype.

This was the start of a revolution in the mobile phone industry. The Finnish giant was the largest cell phone maker in 1998. Nokia overtook Motorola, a move that was hard to predict. So, what led to the downfall of Nokia? It wasn’t a single factor but a myriad of reasons, most of which resulted from Nokia's resistance to change. We present to you the six main reasons behind Nokia's failure.

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Reasons for Nokia Failure: Case Study

The resistance to smartphone evolution, the deal with microsoft, nokia's failed marketing strategies, moving too slow with the industry, overestimation of strength, lack of innovation in products, organizational restructuring at nokia, the symbian vs. meego os dilemma at nokia, failure to adapt and reposition.

In the fast-paced world of technology, companies that fail to adapt to changing trends and consumer demands can quickly find themselves left behind. Nokia, once synonymous with mobile phone supremacy, experienced a significant downfall due to its resistance to smartphone evolution. As competitors embraced the shift towards smartphones, Nokia's reluctance to fully embrace this revolution became one of the key reasons for its failure.

Nokia failed to take advantage of the Android bandwagon. When mobile phone manufacturers were busy improving and working on their smartphones, Nokia remained stubborn. Samsung soon launched its Android-based range of phones that were cost-effective and user-friendly.

Nokia's management was under the impression that people wouldn’t accept touchscreen phones and would continue with the QWERTY keypad layout. This misapprehension was the start of its downfall. Nokia never considered Android as an advancement and neither wanted to adopt the Android operating system.

After realizing the market trends, Nokia introduced its Symbian operating system, which was used in its smartphones. It faced usability issues and lacked the app support and developer ecosystem that rival platforms like iOS and Android offered. The clunky user experience and limited app selection hampered Nokia's ability to compete effectively. Also, it was too late by then, with Apple and Samsung having cemented their positions. It was difficult for the Symbian operating system to make any inroads. This is the biggest reason behind Nokia's downfall.

Nokia was slow to recognize the potential of smartphones and the shift from feature phones to touchscreen devices. They failed to anticipate the demand for devices with advanced capabilities, such as app ecosystems and touch interfaces. This led to a loss of market share to competitors like Apple's iPhone and Android-based smartphones.

Another reason for Nokia's failure was the ill-timed deal with the tech giant Microsoft . The company sold itself to Microsoft at a time when the software behemoth was fraught with losses.

Nokia's sales screamed the mobile phone maker's inability to survive on its own. At the same time, Apple and Samsung were making significant strides in innovation and technological developments.

It was too late for Nokia to adapt to the dynamic and rigorous changes in the market. Microsoft’s acquisition of Nokia is considered to be one of the biggest blunders and wasn't fruitful for either side.

The partnership limited Nokia's ability to differentiate itself and left it dependent on Microsoft's success in the mobile industry . The Windows Phone platform struggled to gain traction, further impacting Nokia's market position. This case study provides valuable lessons for businesses considering similar alliances and emphasizes the importance of aligning visions, complementary strengths, and adaptable strategies.

Marketing plays a crucial role in shaping a brand's success and perception. In the case of Nokia, its decline can be attributed, in part, to failed marketing strategies that hindered its ability to compete effectively in the mobile phone market.

One notable misstep in Nokia's marketing approach was its unsuccessful implementation of umbrella branding . Companies like Apple and Samsung successfully adopted the umbrella branding model, with flagship products like the iPhone and Samsung Galaxy series acting as the focal point for expanding their product lines. However, Nokia failed to follow suit and capitalize on the umbrella branding strategy, missing out on the opportunity to create a cohesive and recognizable brand identity.

Additionally, Nokia's marketing efforts struggled to maintain the user trust that the company had built over the years. Inefficient selling and distribution methods further eroded consumer confidence and made it difficult for Nokia to reach its target audience effectively.

While Nokia attempted to regain momentum by introducing hardware and software innovations, these offerings were often late to the market and lacked the uniqueness that would have set them apart from competitors. Rivals had already released similar features and devices, diminishing Nokia's ability to capture consumers' attention and regain market share.

The failure of Nokia's marketing and distribution strategies played a significant role in its ultimate decline and exit from the mobile industry market. Without a strong brand identity, effective distribution channels, and timely innovations, Nokia struggled to compete with rivals who had successfully aligned their marketing strategies with evolving consumer preferences and market dynamics.

Nokia's failure to keep pace with changing technology and trends played a significant role in its decline. While the company had earned a reputation for its hardware, it didn't prioritize its software lineup, which proved to be a crucial oversight.

Initially, Nokia was cautious about embracing technical advancements in order to mitigate the risks associated with introducing innovative features to its phones. However, this approach hindered the company's ability to adapt to the rapidly evolving market.

The business needed diversification, but it was too late by the time Nokia realized this. Instead of being amongst the early initiators, Nokia transitioned when almost every major brand had already started producing awesome phones.

This case study shows Nokia's failure to keep up with changing technology and its delayed response to industry trends significantly contributed to its downfall.

Nokia overestimated its brand value. The company believed that even after the late launch of its smartphones, people would still flock to stores and purchase Nokia-manufactured phones. This turned out to be a misconception, as consumer preferences had shifted towards other brands.

People still make predictions that Nokia will retain the market leadership if it uses better software at its core. However, this is far from the truth, as seen today.

The company got stuck with its software system, which is known to have several bugs and clunks. Nokia felt its previous glory would help alleviate any sort of trouble. Unfortunately, things didn’t play out that way.

Unfortunately, the market dynamics had changed, and consumers were no longer willing to overlook the shortcomings of Nokia's software. Competitors had surpassed Nokia in terms of user experience and software innovation, leaving Nokia struggling to regain its position.

Nokia's lack of innovation in its products significantly contributed to its failure case study. While brands like Samsung and Apple came up with advanced phones every year, Nokia simply launched the Windows phone with basic features, failing to keep up with the industry's rapid progress..

The Nokia Lumia series was a jump-start measure, but even that collapsed due to a lack of innovation. The unattractive and dull features didn’t help. In the era of 4G, Nokia didn’t even have 3G-enabled phones. Nokia also came up with the Asha series, but it was game over by then.

Wrong decisions and risk aversion brought about the decline of the mobile giant. Nokia refrained from adopting the latest tech. Nokia's failure became a powerful case study that made organizations realize the importance of continuous evolution and enhancements. The journey of what was once the world’s best mobile phone company to losing it all by 2013 is quite tragic. Nokia's failure was not solely due to its lack of innovation but also its shortcomings in leadership and guidance. These factors, combined with its inability to adapt to market demands and technological advancements, sealed the company's fate.

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Nokia underwent a sudden and significant organizational shift by adopting a matrix structure driven by enhancing agility within the company. However, this abrupt change resulted in dissatisfaction among stakeholders, particularly as key individuals in top management departed from the organization. These individuals, who had played instrumental roles in establishing Nokia as a leading company, were no longer part of the decision-making process .

The shift to a matrix structure also brought about internal challenges, as stability in top management, a crucial element for organizational coherence, was disrupted. Over just five years, Nokia experienced two CEO replacements , preventing employees from fully adapting to new leadership goals and visions. The frequent changes in leadership created instability and hindered consistent strategic direction. The lack of continuity in leadership contributed to employee dissatisfaction and impacted the overall cohesiveness of the organization. Employees and other stakeholders found it challenging to align with successive CEOs, leading to a breakdown in communication and a sense of disconnect within the company.

Nokia Changes their Logo After 60 Years

Nokia's problem arose when its R&D division underwent a split, with one faction dedicated to enhancing the Symbian operating system and the other focused on developing MeeGo. The competing claims of superiority between the two teams led to internal friction, causing delays in the release of new phones. The company grappled with the challenge of harmonizing divergent technological directions, impacting its ability to bring innovative products to market in a timely manner. This internal competition within the R&D division created a complex dynamic, hindering Nokia's efficiency and potentially affecting its competitive edge in the rapidly evolving smartphone market.

Nokia's downfall can be attributed to its failure to analyze market trends and adjust its strategy accordingly. The company neglected the burgeoning smartphone market, ultimately missing a significant opportunity for growth. Rather than capitalizing on this evolving landscape, Nokia could have revitalized its position by enhancing its existing software, such as Symbian. Unfortunately, the lack of strategic foresight and adaptability led to a missed chance to stay competitive in the dynamic tech industry.

Moreover, the oversight in market analysis and strategic planning eroded Nokia's market share and diminished its relevance in the rapidly changing consumer electronics landscape. The company's reluctance to pivot and innovate in response to market dynamics ultimately contributed to its decline in the face of evolving consumer preferences and technological advancements.

The fall of Nokia can be attributed to a combination of factors that hindered its ability to adapt, innovate, and stay competitive in the mobile phone market. The resistance to smartphone evolution, missed opportunities, ineffective marketing strategies, and the deal with Microsoft all contributed to its downfall. Ultimately, Nokia's decline serves as a reminder of the importance of staying agile, embracing change, and continuously evolving to meet consumer demands.

Why did Nokia fail?

Not switching to Android, lack of innovation, not upgrading the software, and overestimating the brand value were some of the reasons that led to Nokia's failure.

What is Nokia?

Nokia is a consumer electronics company popular for its mobile phones. It is one of the largest mobile phone manufacturers in the world.

Is the Nokia company closed?

No, the company is still running, but it has shut down some of its plants.

What happened to Nokia?

Once a dominant force, Nokia clung to outdated software, allowing Android and iOS to surge ahead, leaving the brand lagging. Despite its focus on new technologies, Nokia's legacy now lives on in the realm of Android.

Why did Nokia fail to compete with Samsung and Apple?

Nokia didn't adopt Android and focused on its hardware more than its software, which is why it failed to compete against Samsung and Apple.

Are there any new Nokia smartphones coming in the near future?

Though Nokia might seem dominant on the phone front, the company occasionally comes up with some new phones/smartphone devices. Here are some of the Nokia smartphones that are likely to be launched in 2022:

• Nokia 2760 Flip 4G
• Nokia C21 Plus
• Nokia Suzume
• Nokia C2 2nd Edition

Who took over Nokia?

Nokia phones were robust and dependable companions of the pre-smartphone era. However, Nokia's Java and Windows phones failed to stand out in the market dominated by Apple and Android phones. The Android phone manufacturing companies like Samsung, LG, HTC, Sony, Motorola, and other Chinese smartphone developers like MI, Realme, Oppo, Vivo, and the Apple IOS devices took over Nokia in the mobile sector.

What lessons can other businesses learn from Nokia's failure?

Nokia's failure highlights the importance of embracing change, anticipating market trends, and continuously innovating to meet customer expectations. It underscores the need for effective marketing strategies, strategic partnerships, and an unwavering commitment to adaptation and innovation in today's rapidly evolving business landscape.

Was Nokia's lack of innovation a significant factor in its decline?

Yes, Nokia's lack of innovation in its product lineup played a significant role in its downfall. The company failed to keep pace with rivals who consistently introduced advanced devices and embraced evolving market demands, which resulted in Nokia losing its competitive edge.

Why did Nokia go out of business?

Nokia lost its phone industry dominance by sticking to outdated software, missing the smartphone revolution, and experiencing a significant sell-off. Despite not going out of business, Nokia's cautionary tale highlights the vital role of innovation in a rapidly evolving tech landscape, with the company still present in network tech and patents.

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Nokia Change Management Case Study

Nokia is a company that has undergone significant change over the years, transforming itself from a mobile phone manufacturer to a leading player in the telecommunications infrastructure market.

This transformation was driven by a range of factors, including changes in market conditions, advancements in technology, and shifting customer needs and preferences.

However, perhaps the most important factor in Nokia’s successful transformation was its approach to change management.

In this blog post of Nokia’s change management case study, we’ll examine key strategies and tactics that the company employed to drive its successful transformation.

By examining the lessons learned from Nokia’s experience, we can gain valuable insights into effective change management and the critical factors that are required for a successful organizational transformation.

Let’s start reading.

Brief History of Nokia Journey of Change 

Nokia was a Finnish company that produced a wide range of products, including paper, rubber, and cables. It was not until the 1980s that Nokia started focusing on telecommunications equipment, but even then, it was still a relatively small player in the industry.

In the late 1990s, Nokia made a strategic decision to focus solely on mobile phones, which at the time were rapidly growing in popularity. Nokia recognized the potential of the mobile phone market early on and invested heavily in research and development to create innovative and user-friendly devices.

Nokia’s decision to focus on mobile phones paid off, and by the early 2000s, the company had become the world’s largest mobile phone manufacturer, with a dominant market share. Nokia’s success was due to its ability to offer a wide range of phones at different price points and to develop cutting-edge technology such as the first mobile phones with built-in cameras and internet connectivity.

However, Nokia’s dominance in the mobile phone market was short-lived. The company struggled to keep up with the rapid pace of technological innovation and the rise of new competitors, such as Apple and Samsung. As a result, Nokia’s market share declined sharply in the late 2000s and early 2010s, and the company eventually sold its mobile phone business to Microsoft in 2014.

Nokia refocused on telecommunications infrastructure and services. It was a again a success story. In 2015 Nokia acquires French telecommunications equipment company Alcatel-Lucent.

What are those external and internal factors that caused change?

There were several external and internal factors that led to Nokia’s change management and transformation from a mobile phone producer to a telecommunication infrastructure service provider. Here are some of the key factors:

External factors:

• Increased competition: The rise of new competitors such as Apple and Samsung in the mobile phone market put pressure on Nokia’s mobile phone business, leading to declining market share and profits.
• Rapid technological change: The rapid pace of technological innovation in the mobile phone industry made it difficult for Nokia to keep up and remain competitive.
• Shift towards smartphones: The shift towards smartphones and the decline of feature phones also contributed to Nokia’s decline in the mobile phone market.
• Opportunities in telecommunication infrastructure: The growing demand for 5G networks and other telecommunications infrastructure services presented an opportunity for Nokia to diversify and expand its business.

Internal factors:

• Strategic decision-making : Nokia’s leadership recognized the need to adapt to changing market conditions and made the strategic decision to shift its focus towards telecommunications infrastructure services.
• Strengths in telecommunications: Nokia had a strong history and expertise in the telecommunications industry, which gave it a foundation to build on in expanding its business.
• Investment in research and development: Nokia continued to invest in research and development, allowing it to develop new products and services in the telecommunications infrastructure market.
• Acquisitions and partnerships: Nokia made strategic acquisitions and partnerships to expand its capabilities in telecommunications infrastructure services, such as the acquisition of Alcatel-Lucent and the partnership with Xiaomi.

07 Key Drivers of successful change management of Nokia 

The successful change management of Nokia from a mobile phone manufacturer to a telecommunications infrastructure provider was driven by several key factors. Here are some of the most important drivers:

1. Clear Strategic Direction

Nokia’s clear strategic direction helped guide decision-making at all levels of the organization, ensuring that all stakeholders were aligned towards common goals and objectives. This helped Nokia to allocate resources more effectively, ensuring that investments were directed towards initiatives that supported the company’s long-term goals.

The leadership and employees focused its efforts on key priorities, such as developing new products and services in the telecommunications infrastructure market, and helped to minimize distractions from other activities that were not aligned with the company’s strategic objectives.

2. Agility and Adaptability

Agility and adaptability are important characteristics for organizations looking to succeed in a rapidly changing market environment. Nokia’s ability to demonstrate both agility and adaptability was key to its successful transformation from a mobile phone manufacturer to a telecommunications infrastructure provider. Nokia was able to quickly recognize and respond to changing market conditions and pivot its business towards new opportunities, such as the growing demand for telecommunications infrastructure services. 

3. Research and Development 

Nokia’s continued investment in R&D played a critical role in its successful transformation from a mobile phone manufacturer to a telecommunications infrastructure provider. By investing in R&D, Nokia was able to develop new products and services in the telecommunications infrastructure market and stay ahead of its competitors. This allowed the company to offer innovative and cutting-edge solutions that met the evolving needs of its customers. Additionally, Nokia’s investment in R&D helped the company to build a strong intellectual property portfolio, which further strengthened its competitive advantage in the market.

4. Operational Excellence 

Nokia’s focus on operational efficiency and continuous improvement was a critical factor in its successful transformation from a mobile phone manufacturer to a telecommunications infrastructure provider. By streamlining its operations and reducing costs, Nokia was able to improve its competitiveness and profitability in the highly competitive telecommunications infrastructure market. This focus on operational excellence helped the company to optimize its production processes, reduce waste, and improve product quality, which in turn helped it to deliver products and services to its customers more efficiently and at a lower cost.

5. Strong Leadership 

Nokia’s success in transforming itself from a mobile phone manufacturer to a telecommunications infrastructure provider was due in part to the strong and experienced leadership of CEO Rajeev Suri, who played a key role in leading the company through the transformation process. Suri’s leadership was critical in rallying employees around the new strategic direction and ensuring that all stakeholders were aligned towards common goals and objectives. Suri also provided clear direction and guidance to the organization, helping to steer the company through the challenges and uncertainties of the transformation process.

6. Cultural Change 

Nokia’s success in transformation is also due to cultural change. Nokia encouraged employees to be more innovative and agile in their work, fostering a culture of experimentation and continuous improvement. The company also emphasized the importance of collaboration and teamwork, encouraging employees to work together to solve complex problems and achieve common goals. Nokia invested in employee development and training, helping to foster a culture of continuous learning and development. This cultural shift helped to create a more flexible, innovative, and agile organization that was better able to adapt to changing market conditions and drive the company’s successful transformation.

7. Acquisition and Partnerships

Acquisitions and partnerships are critical tools that Nokia used to expand its capabilities and build a competitive advantage. By acquiring companies with complementary products and services, Nokia was able to expand its capabilities in telecommunications infrastructure services, giving the company a competitive advantage and helping it to build a comprehensive portfolio of products and services. Additionally, by partnering with other companies in the industry, Nokia was able to leverage the strengths of its partners to deliver innovative solutions that met the evolving needs of its customers.

Final Words 

Nokia’s successful transformation from a mobile phone manufacturer to a leading player in the telecommunications infrastructure market is a powerful case study in effective change management. By adopting a clear strategic direction, investing in research and development, focusing on operational excellence, fostering a culture of innovation and collaboration, and pursuing strategic acquisitions and partnerships, Nokia was able to adapt to changing market conditions and pivot its business towards new opportunities. Ultimately, Nokia’s transformation serves as a powerful example of how organizations can successfully adapt and evolve in response to changing market conditions, leveraging their strengths and capabilities to drive growth and success in new markets and industries.

About The Author

Tahir Abbas

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The Rise and Fall of Nokia

By: Juan Alcacer, Tarun Khanna, Christine Snively

In 2013, Nokia sold its Device and Services business to Microsoft for €5.4 billion. For decades Nokia had led the telecommunications (telecom) industry in handsets and networking. By the late 2000s,…

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• Publication Date: Jan 6, 2014
• Discipline: Strategy
• Product #: 714428-PDF-ENG

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In 2013, Nokia sold its Device and Services business to Microsoft for €5.4 billion. For decades Nokia had led the telecommunications (telecom) industry in handsets and networking. By the late 2000s, however, Nokia's position as market leader in mobile devices was threatened by competition from new lower-cost Asian manufacturers. Apple's 2007 release of its iPhone established an entire new category-the smartphone-immediately popular with users. What were Nokia's missteps over the years? What should Nokia have done differently?

Jan 6, 2014 (Revised: Jun 11, 2020)

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714428-PDF-ENG

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Case study: Nokia: Enabling 5G and DevOps at a Telecom Company with Kubernetes

Nokia 's core business is building telecom networks end-to-end; its main products are related to the infrastructure, such as antennas, switching equipment, and routing equipment. "As telecom vendors, we have to deliver our software to several telecom operators and put the software into their infrastructure, and each of the operators have a bit different infrastructure," says Gergely Csatari, Senior Open Source Engineer. "There are operators who are running on bare metal. There are operators who are running on virtual machines. There are operators who are running on VMware Cloud and OpenStack Cloud. We want to run the same product on all of these different infrastructures without changing the product itself."

The company decided that moving to cloud native technologies would allow teams to have infrastructure-agnostic behavior in their products. Teams at Nokia began experimenting with Kubernetes in pre-1.0 versions. "The simplicity of the label-based scheduling of Kubernetes was a sign that showed us this architecture will scale, will be stable, and will be good for our purposes," says Csatari. The first Kubernetes-based product, the Nokia Telephony Application Server , went live in early 2018. "Now, all the products are doing some kind of re-architecture work, and they're moving to Kubernetes."

Kubernetes has enabled Nokia's foray into 5G. "When you develop something that is part of the operator's infrastructure, you have to develop it for the future, and Kubernetes and containers are the forward-looking technologies," says Csatari. The teams using Kubernetes are already seeing clear benefits. "By separating the infrastructure and the application layer, we have less dependencies in the system, which means that it's easier to implement features in the application layer," says Csatari. And because teams can test the exact same binary artifact independently of the target execution environment, "we find more errors in early phases of the testing, and we do not need to run the same tests on different target environments, like VMware, OpenStack, or bare metal," he adds. As a result, "we save several hundred hours in every release."

Today, Nokia is building telecom networks end-to-end—from antennas to switching and routing equipment—serving operators in more than 120 countries. "As telecom vendors, we have to deliver our software to several telecom operators and put the software into their infrastructure, and each of the operators have a bit different infrastructure," says Gergely Csatari, Senior Open Source Engineer at Nokia. "There are operators who are running on bare metal. There are operators who are running on virtual machines. There are operators who are running on VMware Cloud and OpenStack Cloud. We want to run the same product on all of these different infrastructures without changing the product itself."

Looking for a way to allow its teams to build products with infrastructure-agnostic behavior, the company decided to embrace containerization, Kubernetes, and other cloud native technologies, a move that is being made across the telecom industry. Since early 2018, "when people are picking up their phones and making a call on Nokia networks, they are creating containers in the background with Kubernetes," says Csatari. "Now, all the products are doing some kind of re-architecture work, and they're moving to Kubernetes."

Nokia's cloud native journey began about two years ago, when Csatari's team was building the company's Telephony Application Server (TAS). "We wanted to have a service execution engine in the product, which was a totally separate function from all other parts," he says. "There, we had the possibility to think about new architectures and new tools that we could use. We created this particular product based on Kubernetes, and we liked the work, so we started to talk about cloud native and containers and all of these things. We did a very extensive research of different container orchestration tools. We knew that we have some, let's say, strange or different requirements because of the special environment that our software is running on."

For one thing, Nokia's software serves millions of people, and is required to have the carrier-grade "five nines" availability: to be up 99.999% of the time. "If you turn it to minutes, this means we're allowed to have only 10 minutes of downtime in a whole year," says Csatari. "Downtime here means that you are not able to serve the person to full capacity, which means that we cannot fail. This includes software upgrades, everything, because when you call 911, you're using our software, and you expect that it will work."

That meant that they needed to be able to set affinity and anti-affinity rules in their orchestration tools. "You cannot put all of the functions to the same physical host because physical hosts are failing," Csatari explains. "If you fail with one physical host, then you lose all of the core processing processes. Then there are no calls going through. So we have to divide them among the different physical hosts. At that time, only Kubernetes was able to provide these features. The simplicity of the label-based scheduling of Kubernetes was a sign that showed us this architecture will scale, will be stable, and will be good for our purposes."

The TAS went live in early 2018, and now Kubernetes is also enabling Nokia's foray into 5G. The company is introducing microservices architecture and Kubernetes while adding 5G features to existing products. And all new 5G product development will be on top of Kubernetes. "When you develop something that is part of the operator's infrastructure, you have to develop it for the future, and Kubernetes and containers are the forward-looking technologies," says Csatari.

There have been real time savings thanks to Kubernetes. "By separating the infrastructure and the application layer, we have less dependencies in the system, which means that it's easier to implement features in the application layer," says Csatari. Because teams can test the exact same binary artifact independently of the target execution environment, "we find more errors in early phases of the testing, and we do not need to run the same tests on different target environments, like VMware, OpenStack or bare metal," he adds. As a result, "we save several hundred hours in every release."

Moving from Nokia's legacy cluster management system, which had been built in-house more than thirty years ago, to a Kubernetes platform also meant that "we started using Linux as a base operating system, so we just opened the window to all of these open source projects instead of implementing everything in house," says Csatari. (From CNCF's ecosystem, the team is already using Helm , gRPC , CNI , Prometheus , and Envoy , and plans to implement CoreDNS .) "Our engineers can focus more on the application level, which is actually the thing what we are selling, and not on the infrastructure level. For us, the most important thing about Kubernetes is it allows us to focus on value creation of our business."

The company has a long-term goal of moving the entire product portfolio into the Kubernetes platform. To that end, Nokia teams are working together with other companies to add the features needed to use Kubernetes with the real-time, nanosecond-sensitive applications close to the edge of the radio network.

And the CNCF community is proving to be a great forum for that collaboration. "I had some discussions at KubeCon with people from the networking SIG and the resource management working group, to work together on our requirements, and that's very exciting for me and my colleagues," says Csatari. "Previously, everybody had the same problem, but everybody just did it in his own, and now we are trying to solve the same problem together."

Perhaps the biggest impact that Kubernetes is having on Nokia, Csatari believes, is that people are starting to think about how a telecom company can do DevOps. "We are building a DevOps pipeline, which reaches from the actual developer to the customers, and thinking about new ways how can we digitally deliver our software to our customers and get feedback from the customers right to the engineers," he says. "This is something that will fundamentally change how telecom companies are delivering software, and how quickly can we develop new features. This is because of the usage of containers and, of course, the usage of Kubernetes."

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PTCL is transforming its customer service

Case study: Nokia Customer Care Applications and Network Insights

PTCL: the largest telecommunications company in Pakistan

  The largest telecommunications company in Pakistan, PTCL operates as the country’s major ICT services provider. PTCL has more than two million subscribers, offering services all over Pakistan and has also started providing data and cloud services to enterprise clients. 

To improve customer service and boost agent efficiency, PTCL needed to get deeper insights into its network, with high visibility across all vendors’ technologies — as well as a platform that offered automation capabilities for faster, more streamlined issue resolution.  

How Nokia helped PTCL with AVA Fixed Network Insights and Service Management Platform

  Nokia’s approach for transforming PTCL’s customer service operations involved two key components.  

Network analytics

To collect more data about PTCL’s network infrastructure, Nokia implemented its AVA Fixed Network Insights solutions, including:

• Nokia Network Analyzer – Copper to assess whether digital subscriber lines were providing the quality and stability needed to deliver high-speed internet and triple-play services
• Nokia Network Analyzer – Fiber to determine whether PON and optical links were meeting quality-of-service requirements for the best broadband and fiber-to-the-home services

Automated customer service management

Based on the data collected on PTCL’s network, Nokia then performed a consultancy study to determine the quantifiable improvements its Service Management Platform could bring to PTCL’s call centers.

Nokia’s Network Analytics and Customer Care solutions

Nokia’s solution has since been deployed in all PTCL contact centers across Pakistan. Agents are now equipped with single-pane- of-glass visibility, showing all relevant information — including guided resolution steps — to improve troubleshooting efficiency while reducing customer service costs. 

In addition, customers are empowered to more easily solve their own issues through a variety of digital channels now available to them, further reducing agent effort. Customers are also reporting a better overall quality of experience across PTCL’s internet connectivity, IPTV and communications services, in large part due to the improved issue prediction and resolution enabled by the Service Management Platform .   

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