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December 14, 2021updated 15 Dec 2021 11:28am

Deglobalisation and resegmentation in enterprise telecoms

By GlobalData Technology

There is a fundamental shift happening in the global enterprise telecoms market.

This is evidenced by the sale of non-core international assets, and the restructuring, downsizing, and offshoring of teams and organizations.

As a result of the trend towards protectionism and regionalization of markets, the global enterprise telecoms market is changing in shape. Deglobalization, driven by changing market dynamics (Political and Economic), the impact of the pandemic (Social), and the rise of services such as fibre broadband, 5G, IoT, Cloud, and SD-WAN (Technology), the shape of the enterprise telecoms market is changing.

This is logical where a strategic choice has been made – and reflects the above trends. However, the market has evolved from the days of basic connectivity. At the top end, there are truly global enterprises that are tech-driven and increasingly dependent on strategic suppliers and co-creators). Their requirements are super-sophisticated and require depth and breadth of skills, solutions, and partnerships.

The next layer is larger in terms of numbers and generally still requires sophisticated solutions, but with less of a bespoke, tailored element. After that layer, things get complicated as many enterprises specialize in a particular market (e.g. vertical or geographic) and can range from substantial national companies to globally active entities.

Next down – and growing in number the fastest of all segments – come smaller/mid-sized businesses. This market is super-diverse and tends to be more agile in their operations.

The main challenge is how to market to such a diverse community of enterprises. Traditionally, this has been done by size, including revenues, employees, country coverage, and on and off by vertical, with the most sophisticated MNCs and organizations receiving bespoke solutions.

The other challenge is how to grow revenues and margins across customer segments. The biggest enterprises (‘logo customers’) often produce low margins but provide great PR and tend to be sticky due to the difficulty they would have in changing suppliers without significant disruption.

The rest of the enterprise market is more fluid, which offers service providers opportunities and threats as they can both win and lose customers. The current trend is to target the small/medium-sized business market directly and indirectly. SMB/SME is growing, and many are less focused on costs when expanding, with a focus on technology as an enabler of business.

Smart marketers, strategists, and management need to segment their target customers using behavioural, vertical, and geographic aspects in order to win, retain, and grow their enterprise customer base as the market evolves.