Lucent touts its service provider strengths

Conceding that it trails others in selling to enterprises, Lucent Technologies officials last week pitched the company's next-generation networking technologies primarily to service providers.

This market -- a traditional strength for the company -- has helped Lucent achieve a growth rate of 20.4 percent in 1999, and revenues of $US38.3 billion.

To continue this growth, Lucent plans to focus on service providers with its communications, wireless, convergence, and other networking products, said Rich McGinn, chairman and CEO of Lucent. However, he added that the company has not given up on the enterprise market.

For enterprises, Lucent's strategy will be to leverage and improve its existing equipment while offering a solutions-oriented focus, said William O'Shea, executive vice president of Lucent and chief executive officer of the company's Enterprise Networks business.

"[We'll] bring our equipment along as part of the solution, as opposed to creating a lot of hot boxes," O'Shea said. New Cajun switches, new WAN offerings, new security systems, and new PBXs are planned, he added.

Lucent officials detailed several recent offerings aimed at creating an all-optical network and said that Lucent has doubled its revenue in the dense wave division multiplexing (DWDM) market.

"We believe in the all-optical network, but ... it will take time," said Harry Bosco, senior vice president and chief technical officer of Service Provider Networks at Lucent.

New products include the WaveStar LambdaRouter, which supports OC192 and DWDM. Lucent also has developed OpticAir, an optical-transmission product.

Pat Russo, Lucent's vice president and CEO of Service Provider Networks, said the company's challenge is to develop offerings for the telecommunications service providers on which Lucent now depends for the bulk of its business.

"We've developed the best league solutions for our customers, all of which want to be first in their markets," Russo said. "But these companies also want products that meet their specific business objectives."

Lucent officials also underscored the company's work in wireless technology, an area in which it invested nearly $2 billion, said Jim Brewington, group president of Wireless Networks Group.

The convergence of voice and data networks also is important, Lucent's McGinn acknowledged.

"The secret here is how to take the best of both and drive down the cost of networks," without sacrificing reliability, McGinn said.

A slide used by McGinn in his presentation showed Lucent trailing Cisco, Nortel, 3Com, Fujitsu, and IBM in the enterprise market. Using a movie-credits analogy, McGinn said Lucent is "down there with the best boy and key grip," with a few hundred million dollars a year in enterprise systems sales.

"In hospital terms, our enterprise data efforts have flat-lined, and other parts of our business have grown," McGinn said.

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