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ERIC's Subsidiary Teams Up With SAP to Drive Digital Transformation

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Vonage, a wholly owned subsidiary of Ericsson (ERIC - Free Report) , recently announced a collaboration with SAP SE (SAP - Free Report) . Under this partnership, the two companies are aiming to explore generative AI use cases through the integration of Vonage’s network Application Programming Interface (API) platform and SAP Business AI. 

Per the collaboration, Vonage will equip SAP with access to its network APIs, including Quality-on-Demand (QoD), Device Location and Number Verification APIs from its Communications Platform as a Service (CPaaS) solution. The QoD API promises to deliver businesses extended reality experiences, enhanced broadcast services and support for autonomous vehicles, while the Device Location, along with Number Verification APIs, will be used for authentication to help customers mitigate the risk of fraud. The Device Location API will be useful for applications such as IoT asset tracking and fleet management.

Additionally, Vonage also plans to integrate its network APIs with SAP’s Business Technology Platform and generative AI to introduce cutting-edge solutions. This advancement is expected to elevate user experiences and support sustainability through advanced technologies, enhanced data visualization and augmented reality training.

Will ERIC Stock Benefit From the Collaboration?

With its headquarters located in New Jersey, Vonage became Ericsson’s wholly-owned subsidiary in 2022. This market leader in cloud communication services provides a wide range of speech and verification-capable communications APIs in addition to a low-code, programmable component portfolio with AI capabilities that streamline and leverage application development.

Ericsson continues to execute its strategy to become a leading mobile infrastructure provider and establish a focused enterprise business. In 2023, Ericsson witnessed solid revenue growth in its Enterprise segment, driven by the acquired Vonage businesses that underscore the company’s strategy to expand its presence in the wireless equipment market. 

As businesses face rising demands for enhanced customer experiences, this collaboration between Vonage and SAP represents a strategic move toward harnessing the full potential of generative AI and advanced communication technologies to meet the rising customer demands. Furthermore, Vonage will leverage Ericsson’s mobile network leadership to extend its CPaaS platform to build reliable and innovative applications to address improved connectivity and enhanced customer engagement. These advancements will likely generate incremental demands for Ericsson’s services, leading to higher revenues. Improving financial performance is likely to propel the stock upward.

ERIC’s Stock Price Performance

Shares of Ericsson have gained 43.4% over the past year compared with the industry’s growth of 38.3%.

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ERIC’s Zacks Rank and Key Picks

Ericsson currently carries a Zacks Rank #3 (Hold). 

A couple of better-ranked stocks in the broader industry have been discussed below.

Workday Inc. (WDAY - Free Report) carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%. Workday is a leading provider of enterprise-level software solutions for financial management and human resource domains. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


Airgain, Inc. (AIRG - Free Report) currently carries a Zacks Rank #2. It has a long-term earnings growth expectation of 35%.

Based in San Diego, CA, Airgain provides antenna products as integrated wireless solutions. These devices are designed to address vital connectivity requirements during product development and throughout the entire lifecycle of other industries, such as automotive and consumer, in addition to various sectors within an enterprise.


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