Lucent's metro re-entry may re-energize giant

Lucent Technologies Inc.'s re-entry into the crowded but booming metropolitan-area network market is a necessary move in the company's turnaround, analysts say.

At SuperComm 2001 two weeks ago, Lucent announced a renewed focus on the MAN market as part of a sweeping product launch across the company's Switching and Internet-working business unit. Lucent unveiled four platforms under the Metropolis banner - one for next-generation SONET access, another for multiservice dense wave division multiplexing (DWDM) in the core, and two for access and core wavelength division multiplexing.

"We've been kind of quiet in the metro space," says Bruce Dunlap, Lucent's vice president of metro networks. "But we've been in the metro for over 10 years. We needed to get a broad portfolio together before we attacked the market."

The Metropolis lineup includes the metroDMX, a next-generation SONET cross-connect and add/drop mux; the metroMSX, an integrated multiservice platform that performs add/drop muxing, cross-connect switching and DWDM, and supports ATM, time-division multiplexing and IP; and metroEON and metroMLS, DWDM devices that map Gigabit Ethernet, SONET and storage network services onto wavelengths at the core and access points, respectively.

The MAN launch comes when Lucent is in the midst of a difficult restructuring. The company, which still does not have a CEO, posted a US$3.7 billion loss last quarter and is laying off tens of thousands of employees due to reduced spending by its carrier customers. Despite reports of progress in its turnaround attempt, Lucent entertained merger talks with Alcatel SA, a sign the company may be looking to be rescued. Those talks recently fell apart.

Metropolis represents a breath of life for Lucent, although not exactly a new breath in the MAN market. Metropolis is the next generation of Lucent's DDM-2000 and FT-2000 SONET add/drop muxes and cross-connects, of which there are more than 150,000 installed, Dunlap says. Lucent plans to tap this installed base to gain additional traction in a market dominated by Nortel with increasing incursions from Cisco Systems Inc., ONI Systems Corp., Ciena Corp. and Sycamore Networks Inc.

The MAN market is hot because service providers need equipment to break the bandwidth bottleneck in the metropolitan core, edge and access points, Dunlap says. Currently, the metropolitan area cannot match the bandwidth capacity of the optical long-haul network, creating a performance imbalance for applications that need to traverse the globe.

Lucent is hoping service providers pick its offerings to tip the bandwidth scales back toward the metropolitan environment. Dunlap says the company has 18 Metropolis customer trials and deployments under way.

"They needed to show they do have a renewed focus on the metro space," says Grier Hansen, an analyst at Current Analysis Inc. "As far as a momentum for Lucent, it's great they've announced these products are available and that there are customers interested."

Lucent faces some hurdles, however. It'll be facing a lot of large, established vendors that have "proven solutions" in this market, Hansen says. Also, the Metropolis products - some of which were developed internally, others obtained through the acquisition of Chromatis - are still not under a common management platform.

"It takes away some of the 'family' aspects of [the launch]," Hansen says.

Lucent still has a good shot at gaining sizable share, says Michael Howard, co-founder of Infonetics Services Corp.

"Carriers and service providers are still deciding how they're going to build out their optical networks," he says. "There's a lot of options for them from a lot of different equipment manufacturers, and there's no one way to skin the cat."

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