Sprint Nextel Corp. is looking to expand its presence in the consulting business beyond advice and into implementation. Sprint launched its Sprint Enterprise Mobility Inc. unit Thursday, which is designed to advise large businesses and government agencies on how best to use wireless technology and actually implement and manage those systems.
“Sprint Enterprise Mobility was born out of customer need,” Chief Operating Officer Len Lauer said during a conference call Thursday to discuss the new business. The unit is a step up from the company’s Sprint Mobile Business Assessment, which was unveiled in July as the first consulting business dedicated to wireless technology, but is now absorbed into Enterprise Mobility. The move was seen as Sprint’s entry into the lucrative consulting arena, which has proven successful for the likes of International Business Machines Corp. (IBM).
The key change is Sprint will now follow through with its advice and help companies set up the systems, managing them and sharing in the risks.
“Customers desperately needed help with getting their systems implemented,” said Enterprise Mobility President Bill Halbert. “With such a pressing need, we moved quickly to create this business.”
According to Bain & Co., the managed services market for telecom service providers in 2008 will be worth $40 billion to $50 billion in the U.S. Consulting, however, is worth about 10% of that pie, so implementation and management of the system is a crucial revenue stream. The consulting part, however, has been shaken up as well. Rather than focusing on the right technology or services, the advice will revolve around how different services work together and how new ones get integrated with a company’s old system. The unit will be looking at each company and sector specifically and tailoring a unique system for each customer.
In addition, Sprint’s affirmation of the unit’s independence from its parent company was much stronger. It was previously unclear how agnostic the advice was, since much of the business would go to Sprint’s preferred partners. But Lauer and Halbert made certain that their recommendations would include competitors.
“It’s a multi-carrier environment,” Halbert said. “We recognize that. It’s necessary to operate objectively.”
Sprint could be in for a bumpy road as it works with its rivals.
“It’ll be interesting how they work with the other carriers,” said Roger Entner, an analyst for Ovum.
Sprint is hoping to drive overall demand for wireless communications products by offering consulting services. The unit will target businesses in sectors that are likely to be filled with early adopters such as health care, insurance, retail banking and construction.
While the advice is supposed to be unbiased, Entner said Sprint likely is hoping for a bigger piece of the pie in the long run.
Lauer declined to comment on financial expectations for the unit, saying it is too early to tell. He added the unit will be a standalone business with its own sales force.
As it stands, the market for consulting – particularly with wireless systems – is fragmented with niche players focusing on one particular expertise. The company hopes to be an all-encompassing source for advice and implementation.
For the short term, Entner said other carriers likely won’t follow suit with consulting arms of their own.