Ericsson is continuing to execute its revised strategy in the Cloud Software and Services segment. As outlined at its Capital Markets Day 2022, key priorities include limiting subscale software development, accelerating automation to lower deployment and maintenance efforts and changing focus from market share gains to profitable business.
With the revised Cloud Software and Services strategy, Ericsson is laying the foundation to turn the segment around. The target is to reach break-even in full-year 2023 on EBIT/EBITA level with gradual improvements towards long-term attractive profitability.
In July 2022, Ericsson has completed its billion-dollar acquisition of Vonage, a global provider of cloud-based communications, which has a strong track record of growth and margin evolution.
The acquisition provides Ericsson with access to powerful building blocks to offer a full suite of communications solutions including Communications Platform as a Service (CPaaS). By leveraging the Vonage CPaaS offering, Ericsson aims to transform the way advanced 5G network capabilities are exposed, consumed and paid for.
The revised Cloud Software and Services strategy is a testimony to what Ericsson President and CEO Börje Ekholm mentioned to Telecom Reviewon digitalization. “Digital infrastructure will change the way we work, live, and function. So we should expect to see profound changes,” he noted.