Focus on business communications

In addition to developing and marketing such world-renowned products as the AXE system, mobile telephone systems and phones, Ericsson has long been active in the area of business communications.

During the first decades of the century, private branch exchanges (PBXes) were developed in parallel with public exchanges. The earliest systems, which functioned solely as internal communications networks, were quickly equipped with a connection to the public telephone network.

In many markets, responsibility for both sales and installation of these private subscriber switches fell on the state-owned PTT. The sales activities that Ericsson directed towards telecommunications authorities therefore also came to include the development and sales of telephones. From 1954 to 1982, these operations were conducted in a separate division, which was first called ERGA and later the G division.

Business operations focused on companies were also very intensive in another unit within Ericsson. Business customers had expressed a need at an early stage for other types of communications services and products that could be regarded in one way or another as telecommunications signaling systems. In 1929, a special Ericsson sales company was established to meet the increasing demand. The company's products included intercom systems, fire alarms and time clocks.

In 1932, the company changed its name to L M Ericsson försäljningsaktibolag. Up until the time of World War II, the company conducted a successful business around the world. After the outbreak of the war, the company changed its name to L M Ericssons Svenska försäljningsaktiebolag. In 1966, the sales company and part of the ERGA division were merged into the newly established company L M Ericsson Telemateriel AB.

Many interesting innovations were created within this part of Ericsson. In the late 1970s, Ericsson was the world leader in loudspeaker telephones for internal communications. In 1982, the company presented the world's first voice controlled telephone, the Ericom PRINA, which featured personal voice recognition and a calling function that could dial the desired number using spoken instructions.

Ericsson also became a world leader in the area of time control, and later, time reporting. Over nearly seven decades, the company distributed products around the world that were nearly everlasting. Today, although time accounting now takes place using more modern methods, there are still many punch clocks from Ericsson in the corridors and employee entrances of companies around the world.

Fire alarms were another major and important area of operations. Ericsson began manufacturing such products during its first year of operations in 1876. Just over a hundred years later, in the early 1980s, Ericsson had become Sweden's largest supplier of automatic fire alarms and had a strong position in several other markets around the world.

With respect to private branch exchanges (PBXes), rapid advances in technology starting in the 1960s resulted in more sophisticated products. One of Ericsson's very first all-electronic switches was the ASE 432, a small switch for the advanced digital switching system MD 110, which was completed after many years development work. At that time, these products belonged to Ericsson Information Systems AB, which had been formed the year before.

To date, more than 15 million MD 110 lines have been installed, making it the world's most widely used system of its kind.

Intercoms, time clocks and fire alarms were transferred to Ericsson Security and Telesystems AB in 1982. Eventually, Ericsson sold its time system products to the Finnish company Wärtsilä, while most fire alarm operations were taken over by the Swiss company Cerberus. Intercoms were transferred to Ericsson Information Systems AB.

Ericsson's business communications operations were radically restructured during the late 1980s. During the 1990s, these operations were successively streamlined, while alliances, partnerships and strategic collaborations were established with other companies. Production facilities, and in later years, even large portions of the sales organization, were eliminated or outsourced to external suppliers.

During the IT revolution, business users have usually been the first to adopt new technology. Today's society is characterized by mobility and accessibility wherever users happen to be located. Computers have taken over the job of typewriters. Electronic storage has replaced binders and filing cabinets, and e-mail has replaced the internal mail system. The younger computer industry has moved closer to, and in large part converged with, the more mature telecom industry. Today's company for business communications, Ericsson Enterprise AB, stands with one foot in each of these two worlds.

Author: Thord Andersson & Kari Malmström

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