The Six Five team dives into Qualcomm acquiring Cellwize.
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Patrick Moorhead: Daniel, let’s move into an acquisition that Qualcomm made. I mean, gosh, company on the move here.
Daniel Newman: By the way, I love that you said that, just what you said about the more you know me. You almost sounded like Bill McDermott in the recent interview I did with him. He said almost the same thing. The only problem he has is if everyone knew him, the business would be this big. Not everyone knows us. Yeah. So Qualcomm continues to expand. The number-one focus of the organization has been on getting clear market buy-in to its diversification strategy. CEO Cristiano Amon, I think, is very confident that the company’s device business, its high-end and premium-tier, 5G, Snapdragon and technologies and licensing are all pretty robust, solid, and well-entrenched. But what he’s pretty continuously articulated in all of his market commentary is he doesn’t feel that what is fully appreciated is the business’s diversification, which is the new routes to market, whether that’s PCs, automobile, automotive, IoT.
So the company continues to make acquisitions that are extending sort of the way the company goes to market. And that’s what made this Qualcomm acquisition of Cellwize, because it is in their space. It’s in the RAN space. Basically, Cellwize is in the space of 5G network deployment, automation, management software. And essentially what Qualcomm is looking to do is to utilize Cellwize to help with multi-vendor RAN automation and management and tying it together to what Qualcomm already offers as a leading 5G RAN platform. So as I see it, this is an interesting new go-to-market modality for Qualcomm because they’re getting closer and closer to having to work and actually have the operators as customers buying.
Typically, their market was the ODMs, and there would be kind of this circular relationship that would exist. Qualcommm would help the ODMs build devices. Those device makers would then work with the operators to make sure they were certified. But as Qualcomm becomes more integral to the actual network itself, to the RAN layer itself, these customers start to have to come to Qualcomm more and more. And they’re feeding off of that relationship directly with Qualcomm, which I don’t think should surprise anyone. It’s kind of like building the semiconductors that are going to create the automobile. It used to be done by OEMs that were kind of these Tier Ones that lived in between the car makers and the chip makers. And now the chip makers are just working directly with all the car makers. This is kind of the same thing that’s happening. Qualcomm is going to be working much more closely directly with the operators to be able to help them deploy private and public 5G networks at the pace that the market is expecting.
So as I talked to Derga Malladi, who runs the business… And there’s a pod, and I’ll put it in the show notes, that we did. The long and the short was that this is all about enabling the mobile network operators and enterprises to monetize 5G. There’s a lot more there, but you know what, Pat? There’s just a lot to cover, and I know we only have a few minutes left. So I’ll pause there because I know you probably want to bounce back a few things. But it was a good strategic acquisition that’s going to expand the company’s business, and it’s going to expand the depths of its role in 5G.
Patrick Moorhead: You sucked a lot of the oxygen out of the room, but you did get the interview with Derga, so congrats. What really struck me on this is this isn’t hardware. This is automation and orchestration. This is very different for a Qualcomm to get in this. In fact, I’m unaware of any application or any type of capability that even comes close to this. So it’s one thing to be into hardware. It’s another thing to be into software. Qualcomm’s clearly creating a, I would say, a half-stack platform, right? The reason I call it half stack is you have to add the applications to be a full stack, but still impressive nonetheless.
And I think what we’ve learned is that customers buy into solutions as opposed to a bag of parts, and this is one step closer to that solution. So a big part of Qualcomm’s diversification strategy. It’s interesting. We’re seeing the company not only hit the edge, but start to come in off the edge, right? So consider you have chips, you have smartphones, you have RF that’s going to be connecting to the base station, that’s going to be connected to the RAN, and now an open RAN. So there we go. Going to be watching this a lot.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio