FRAMINGHAM (03/20/2000) - Carriers can choose from two paths. Many provide retail voice and data services, with all the associated customer service headaches. But some, such as Williams and Level 3 Communications Inc., stick to providing big pipes for other carriers that actually do the dirty work of serving end users.
The same kind of decision faces box vendors that serve carriers and enterprises. Consider Lucent Technologies Inc. Last November, responding to concerns that its enterprise data strategy was buried under its carrier push, Lucent announced it was creating a consolidated enterprise networks unit. So when it recently unveiled what looked like a spinoff of its enterprise business, it seemed Lucent was just carrying that strategy a step further.
Except that isn't what's happening, because the November reorganization never really took. Instead, Lucent is simply taking three old divisions and hurling them out of the company. The big one is its voice products group, which remains little changed organizationally from before 1996, when it was AT&T Global Business Communications Systems. The other two are its Systimax cabling unit and its LAN switching business. What's missing from the spinoff are all the products at the WAN edge, such as virtual private network routers, remote access concentrators and firewall products.
The official explanation is that the WAN edge, even on the customer premise, straddles the boundary between enterprise and service provider nets. The real story, barely concealed by Lucent officials, is that CEO Rich McGinn is juiced up about the acquisitions of Ascend and Xedia, where most of these products come from, and much less engaged in old 10/100 Ethernet switch ports and structured wiring.
Lucent may present the spinoff as an enterprise play, but of its $8 billion in revenue, IDC estimates that only $270 million come from data switches. The spinoff is basically a big PBX company.
Maybe that's not so bad. There's never been a large, U.S.-based dedicated PBX vendor. Most other PBX players are units of foreign conglomerates. Nortel Networks' PBX base never contributed as much revenue as its carrier voice products, and back in the AT&T days, what's now Lucent was overshadowed by AT&T's long-distance revenue.
But on the data side, it begins in a sorry No. 10 position in switch ports shipped. And it'll have to start from scratch to develop an integrated LAN/WAN strategy. All this at a time when Cisco - with 30 times Lucent's share in LAN switch ports - has also shipped a half million voice-enabled, modular 2600 and 3600 multiservice access routers.
Users could buy WAN gear from the non-spun-off Lucent, but McGinn has bought so heavily into the carriermanaged network concept that he's never fully developed an enterprise data channel. Without feet on the street and value-added resellers in the door, it's difficult to see how Lucent can make much more of a mark. After 20 years of largely squandered Bell Labs data patents and four years of expensive acquisitions, it seems Lucent is still seeking the key to the enterprise network.
Rohde is a senior editor with Network World. He can be reached at firstname.lastname@example.org.