STOCKHOLM (Reuters) - Nokia (NYSE:NOK) said on Wednesday it plans to launch a cloud-based software subscription service targeting telecom companies for providing software around analytics, security and data management.
Many technology companies have been moving toward a subscription model from upfront licensing to build a predictable, recurring business.
While some of Nokia's software portfolio will be offered under subscription from this year, more will be commercially available in early 2022.
When Nokia created its software division in 2016, the idea was to get into subscription too, but we never executed, Senior Vice President Mark Bunn said in an interview.
"Now we have executed on it ... we have built underlying technology to be able to operate at scale," he said.
A cloud-based software platform can lower costs, make it easier to deploy and manage, and customers can try the platform before committing for long-term use.
Nokia, which has been in discussions with potential customers, said it is targeting an addressable market of $3.1 billion for the 2021-2025 period, with an annual growth rate of about 25-30%.