Alcatel Lucent

Alca-Lu CFO Pesquidoux out, Tufano takes over

Dan O'Shea — Wed, 26 Nov 2008 08:50:00 -0500

The first step in recovery is admitting you have a problem. The second, third, fourth and fifth steps involve launching a broad strategic review, shaking up management, selling asset stakes to raise cash and taking renewed aim at your biggest competitors. At least that's the way Alcatel-Lucent is doing it, and the company has taken many of those actions in the three months since Ben Verwaayen took charge as CEO. The latest management change, announced today, is the departure of CFO and long-time Alcatel employee Herbert de Pesquidoux, who will be replaced by former Solectron finance chief and interim CEO Paul Tufano.

Pesquidoux said he was leaving the company to pursue other opportunities, though he also was an obvious remaining link to the company's past and particularly to the past year of financial shortcomings. He has been CFO for only one year, since predecessor Jean-Pascal Beaufret left in the fall of 2007, and according to The Wall Street Journal, arguably did a better job. Tufano, however, has 30 years of experience in international finance.

The next step in Alcatel-Lucent's recovery, likely to occur sometime next month, reportedly will be the unveiling of the overall strategic review. The company is continuing talks to sell a 20.8 percent stake in its Thales defense electronics unit to aerospace group Dassault Aviation, and just this week rolled out enhancements to solutions for large enterprises, a move seen as taking direct aim at Cisco Systems.

For more:
- The Wall Street Journal covers the CFO move

Alcatel-Lucent pushes big business communications enhancements

Doug Mohney — Mon, 24 Nov 2008 16:41:26 -0500

Alcatel-Lucent announced a bunch of enhancements Monday within its portfolio of enterprise products under the Corporate Communications banner.

Since launching Corporate Communications Solutions two years ago, Alcatel-Lucent has added more than 5,000 new enterprise customers. The company positions the move as riding the wave of IP centralization and leveraging open standards solutions with SIP enhancements.

A 9.0 release of OmniPCX Enterprise new supports up to 100,000 users and expanded SIP trunking. The new OmniSwitch 900E has been designed for high-capacity and scalable deployments, along with multi-virtual routing and forwarding.

Alcatel-Lucent also threw in a lot of upgrades and enhancements around unified communications. The OmniTouch Unified Communication Solution Release 5.1 and OmniTouch 8600 My Instant Communicator provide multimedia, multi-session collaboration, mobile device integration (hello cell phone) and support for third-party apps like Microsoft Office Communicator. On the call center side, OmniTouch Contact Center Premium and Standard Release 9.0, and CC Teamer applications also get mention.

For more:
- A-L lays it out in a press release.

Alcatel-Lucent initiates Thales sale

Dan O'Shea — Tue, 18 Nov 2008 23:50:06 -0500

Alcatel-Lucent is following through on its previously reported intention to sell a stake in Thales, its defense technology unit, to fellow French company Dassault Group for $1.9 billion. That will buy Dassault a 20.8 percent piece of Thales. The move could help Alcatel-Lucent as it continues in financial recovery mode, and the deal apparently helped goose the company's stock price a bit yesterday. Even though it's just a minority stake in a property that isn't exactly core to Alcatel-Lucent, some observers are seeing it as more evidence that new CEO Ben Verwaayen is not hesitant to make decisive moves early in his tenure.

For more:
- The Wall Street Journal reports

Alcatel-Lucent awaits wireline outsourcing

Dan O'Shea — Mon, 17 Nov 2008 08:47:55 -0500

We recently tried to stir the pot a little by suggesting the outsourcing of some elements of wireline operations might be a good next step for AT&T and Verizon, two old-school telcos re-defining themselves as wireless juggernauts. Embarq and BT have pursued such a wireline outsourcing strategy, so it's not a completely shocking idea. We're not sure anyone noticed what we said, but we were happy to see a Telephony interview with an Alcatel-Lucent official who thinks there will be more of these wireline outsourcing deals to come. Of course, with a massive services business and a pressing need to recover from financial letdowns, Alca-Lu certainly should hope there are more to come.

Wireline outsourcing by nature could be a more complex, higher-stakes commitment, considering the legacy of network quality on which many telcos stake their reputations (though that reputation certainly hasn't stopped people from cutting the cord). Telcos may still want to keep a strong hand managing the vendor partners that they hire to manage their networks. Embarq's technology team, for example, works closely with the Nokia Siemens Network team to whom it outsourced voice operations earlier this year. It can be done, and now may be the time.

For more:
- Telephony has this story

Eric Heikkila's thoughts on ATCA

Dan O'Shea — Wed, 05 Nov 2008 11:17:58 -0500

Last week in Hardware Corner, we talked a bit about IDC's ATCA market outlook, and this week, I interviewed Eric Heikkila, director of the embedded hardware and systems group at VDC Research Group. He has long been engaged in evaluating ATCA trends, and had the following thoughts:

On the potential for ATCA vendor consolidation: "I don't think you'll see a lot of that, because it's really already happened for the most part (with Emerson buying Motorola's Embedded Communications Group and RadiSys acquiring Intel's ATCA assets). So, you have had some pretty drastic consolidation already, and a couple of big players are now at the top of the market."

On big network equipment vendors and ATCA: "Alcatel-Lucent and Nortel have been the biggest network equipment provider proponents of ATCA and have already been moving their platforms onto ATCA standards. They are really the customers for embedded ATCA, and are working with those other ATCA technology companies to make that happen."

On carrier support for ATCA: "We are beginning to see the carriers get more involved. They go to their vendors with a list of requirements, and as long as it fits their dollar range, they are not so concerned about the technology. But what's happening now is that their business models are under attack from free services, and they are looking for ways to contain costs. Commercial-off-the-shelf components in general, and ATCA specifically, present one of the most obvious ways of supporting that need. In the end, what will drive more ATCA adoption is if the carriers demand it from their big suppliers."

Alcatel-Lucent narrows loss

Dan O'Shea — Thu, 30 Oct 2008 08:07:02 -0400

Alcatel-Lucent continued its string of quarterly losses, but showed improved profit on lower restructuring charges in its third quarter 2008 earnings report, and said it is working to streamline its portfolio of businesses and products. The company posted a net loss of $51.8 million in the third quarter, much better than losses of $1.7 billion in the second quarter this year and more than $450 million in the third quarter last year.

New CEO Ben Verwaayen, in his first earnings report with the company, said Alca-Lu is under a strategic review to streamline its portfolio. This could result in selling a sizable stake in defense contractor Thales SA.

Alcatel-Lucent also said the telecom equipment market will continue to be flat. Some analysts believe the company can return to a profit in the fourth quarter, though Verwaayen did not predict this.

For more:
- The Wall Street Journal has this report

Alca-Lu announces new metro WDM switch

Dan O'Shea — Thu, 23 Oct 2008 20:06:22 -0400

Alcatel-Lucent has announced a new metro wavelength division multiplexing platform with the catchy marketing slogan that it offers "Zero-Touch Photonics," which refers to its automated provisioning capabilities. The new 1830 Photonic Service Switch 32 integrates tunable, reconfigurable optical add/drop multiplexer and wavelength tracking capabilities that previously had been in separate platforms.

Network equipment manufacturers have been in a mode of integrating platform capabilities where possible to try to gain an edge with carrier clients. Alcatel-Lucent, trying to come back from several tough quarters, certainly could use an edge.

The Zero-Touch Photonics aspect means that carriers use the switch provision and manage WDM ROADM networks without the truck rolls increase in operational expenses. The vendor says it already has a Tier 1 customer that it did not identify.

For more:
- Light Reading Europe has the story

Vendor financing unlikely to return

Dan O'Shea — Sun, 19 Oct 2008 14:51:24 -0400

We're almost a decade removed from an era in which start-up carriers often were coaxed along in their ambitious network expansions by attractive vendor financing deals for gear and services. Those practices became even more prevalent as the young carriers sank under piles of debt and needed even more help to survive. When some of those carriers went belly up, vendors paid the price for providing essentially free equipment or agreeing to long-term bills that they could no longer collect.

Economic realities are again applying pressure across the telecom industry, but Light Reading Europe suggests that vendors such as Nokia and Alcatel-Lucent are in no mood to help carriers out again with vendor financing deals. That's no real surprise, but in some ways, managed network and service deals in which vendors take over management responsibility for carrier networks or services seem to hold a similar risk. These deals often result in vendors hiring hundreds of carrier employees. Will the long-term pay-off be worth it, or will the long-term costs involved remind vendors of a previous era they would rather forget?

For more:
- see this story at Light Reading Europe

BT to outsource some global ops to Alca-Lu

Dan O'Shea — Sun, 12 Oct 2008 21:16:48 -0400

First, mobile network operators around the world warmed up to the idea of outsourcing network operations to their vendors, and now, wireline telcos are experimenting with the concept. It looks as if BT is at least the second major telco this year, after Embarq, to outsource some network operations to a vendor partner. Embarq off-loaded voice management to Nokia Siemens Networks. Now, BT reportedly is planning to outsource some international market network operations to Alcatel-Lucent, in an effort to focus its own organization on its 21st Century Network project and other issues.

The arrangement is a seven-year deal that also will involve the transfer of about 500 employees from BT Global Services to Alcatel-Lucent, according to the U.K.'s The Register. Along with Ericsson and NSN, Alca-Lu has aggressively pursued managed network and managed services contracts from its carrier customers in recent years.

For more:
- see this story at The Register
- read this report at Light Reading

Verizon, Level 3: We need 100G

Doug Mohney — Mon, 06 Oct 2008 21:37:14 -0400

Both Verizon and Level 3 say they need 100 Gigabit optical networks, and the sooner, the better.

Speaking at Optical Expo 2008 in Dallas, Verizon's backbone network design director said the company is currently meeting traffic needs with multiple 10G wavelengths, but managing multiple wavelengths across fiber is a pain; Level 3 is in the same boat.

At the conference Verizon announced the results of a 100G trial with Nortel; Verizon also has run 100G trials with Nokia Siemens Networks and Alcatel-Lucent. Bringing up 100G would pull costs out of the network (simplified management, more capacity on existing fiber), a benefit that works across the board from enterprise metro Ethernet services to Verizon's FiOS fiber-to-the-home network.

Nortel's optical gear comes out strong in the Verizon announcement. Nortel's optical gear performed with better tolerance for signal distortion than what's typically found in today's standard 10G wavelengths. Tests were run over 73 kilometers of field fiber in Texas at 92 Gbps, so no special fiber or "extensive" re-engineering is necessary for faster speeds.

For more:
- Light Reading reports on 100G lust at Optical Expo 2008.

Spotlight: Bell Labs chief pledges more innovation

Dan O'Shea — Thu, 02 Oct 2008 09:18:19 -0400

There was a lot of speculation recently that Alcatel-Lucent's Bell Labs had abandoned its traditional mission after it cut back on some fundamental physics research. However, Bell Labs president Dr. Jeong Kim, speaking at Telephony LIVE this week in Chicago, promised that a leaner agency would continue its tradition of innovation in new ways.

He said that Bell Labs is getting more focused on disruptive near-term innovation than visionary long-term innovation. Basic and applied research will remain big parts of the recipe, but Bell Labs also will take some projects further into the development phases. He also said Bell Labs's research has to be broader than just Alcatel-Lucent's telecom industry focus.

For more:
- read this coverage at Telephony

Spotlight: Bell Labs' honor questioned, defended

Dan O'Shea — Tue, 16 Sep 2008 20:02:54 -0400

Nature magazine reported last month that Bell Labs was dialing down fundmental physics research and that many of its scientists in that particular department had been moved to other areas of emphasis. Wired News Blogs followed up the report a few days later, writing, that Alcatel-Lucent's Bell Labs unit was "pulling out of basic science, material physics and semiconductor research and will instead be focusing on more immediately marketable areas such as networking, high-speed electronics, wireless, nanotechnology and software." Wired also condemned Bell Labs and its owner for losing touch with its mission of innovation

Bell Labs has not said much to specifically back up those reports, but the issue agains cropped up at Telephony this week, where Kevin Fitchard calls some of the coverage "exaggerated--or at least over-simplified." He adds, "What Bell Labs did was eliminate its material and device physics group, which focused on developing new materials and processes for microelectronics." Fitchard notes that while Bell Labs is not the same organization it used to be, it should hardly be taken to the woodshed for having to change a bit with the times.

For more:
- read this post at Wired News Blogs
- see this column at Telephony

Christy leaves Alcatel-Lucent

Dan O'Shea — Sun, 07 Sep 2008 21:07:21 -0400

Cindy Christy, the president of Alcatel-Lucent's Americas Region, has become the latest executive of the Paris-based company to depart the firm. However, she is leaving for personal reasons and not business-related reasons, according to a story at Light Reading. Alcatel-Lucent recently hired a new CEO and a new chairman, after the former CEO and chairman both stepped down after many quarters of poor financial performance. But Christy may have intended to leave even before these events, LR suggests.

Christy has been with the company for about 20 years, since when it was still known as AT&T Network Systems, long before it became Lucent Technologies and eventually merged with Alcatel. She filled several executive roles in recent years, including president of Lucent's Mobility Solutions Group at a time when the wireless business was exploding with opportunity for network equipment vendors.

For more:
- see this story at Light Reading

Can Ben Verwaayen save Alca-Lu from itself?

Jim O'Neill — Fri, 05 Sep 2008 09:50:31 -0400

Take two competing corporate cultures, add a dash of snobbery and two very distinct leadership styles, add very stiff-and cheap-competition from China to taste, and, finally, squeeze in a twist of tepid industry demand. Shake or stir and serve. What you get is something less than a perfect martini. In the case of Alcatel-Lucent, the product of a decidedly unsavory merger in 2006 that has spawned six straight losing quarters, it's an offering that some experts see as something between "struggling" and "beyond redemption."

Alca-Lu finally had enough and forced out its American CEO Pat Russo and French chairman Serge Tchuruk, replacing them with a pair of Europeans they hope blend better than the last ingredients. For its new Dutch CEO Ben Verwaayen and French Chairman Philippe Camus, the task of turning around the troubled telecom will be daunting.

For more:
- see the Economist story

Related articles
Verwaayen gets Alcatel-Luscent top spot. Verwaayen report
Russo, Tchuruk mixed like lemon and cream. Russo report
CEO, chairman step down at Alca-Lu as losses continue. Alcatel-Luscent report
Could Alcatel-Lucent rule change doom Russo? Russo article
Alcatel-Lucent shareholders ease rules for CEO removal. Alcatel-Lucent story

Ex-BT boss takes over at Alca-Lu

Jim O'Neill — Tue, 02 Sep 2008 07:00:11 -0400

Ben Verwaayen, who led BT through five years of cost cutting and job losses, has been named CEO at struggling comms vendor Alcatel-Lucent, which has lost some $7 billion since its 2006 merger. He'll be joined by ex-aerospace exec Philippe Camus, who Alca-Lu named non-executive chairman.

The two Europeans replace Patricia Russo and Serge Tchuruk, who led Alca-Lu to six straight quarters of losses and were at the core of management infighting between Alcatel's French interests and Lucent's American forces.

Verwaayen, who's Dutch, and Frenchman Camus should help quiet the battle within, but Alcatel Lucent has a long way to go. Its market value has declined some two thirds since the merger. Verwaayen knows his way around telecoms and is no stranger to Lucent, where he held various positions before BT.

For more:
- See the Wall Street Journal story

Related articles
Heads roll after huge Alca-Lu losses. Alca-Lu report
Could Alcatel-Lucent rule change doom Russo? Russo article
Alcatel-Lucent shareholders ease rules for CEO removal. Alcatel-Lucent story
AlcaLu's losses continue in Q1 asCDMA business declines AlcaLu report

Alcatel-Lucent nearing CEO hiring?

Dan O'Shea — Wed, 27 Aug 2008 09:14:36 -0400

Alcatel-Lucent's stock value still was jumping Wednesday after a report circulated Tuesday that the Paris company was close to hiring former Alcatel executive Mike Quigley as CEO. The report came from a French newspaper, Le Canard Enchaine (The Chained-up Duck), that refers to itself as a "weekly satirical newspaper" that also often takes investigative bents (such interesting media times we live in). Alca-Lu declined to comment on the report.

Still, it would not be surprising if the company, which said it wanted to move fast after former CEO Patricia Russo left last month, was nearing announcement of a new top executive. Quigley left Alcatel-Lucent a couple years ago, reportedly for medical reasons. But he also was chief operating officer of Alcatel prior to the Alca-Lu merger, and when Russo took the CEO role at the combined company, some saw it as Quigley getting passed over for the job.

Meanwhile, Alcatel-Lucent has lost several other executives in the last two years. Most recently, former Alca-Lu exec Roger Heinz moved to tellabs to become executive vice president of global sales and service.

For more:
- see this Associated Press story at The International Herald Tribune
- read this story on Heinz at Telecommunications

Related articles
Alcatel-Lucent CEO Russo and Chairman Serge Tchuruk stepped down last month. Alcatel-Lucent report
Alcatel-Lucent also had been hounded by rumors that former BT and Alca-Lu exec Ben Verwaayen could return as CEO. Alcatel-Lucent report

10G GPON may challenge WDM-PON

Dan O'Shea — Wed, 20 Aug 2008 18:19:23 -0400

What's the next PON? It may be GPON to network operators who have not even deployed gigabit passive optical network yet (and we're talking about most network operators). However, for technology speculators, it is never too early to start placing bets on the next, next big thing. For many companies, wavelength division multiplexing-PON (WDM-PON) is the next PON they are thinking about. But, Alcatel-Lucent, who has been a WDM-PON doubter in the past, argues that 10 Gbps GPON presents natural progression for GPON-bound carriers that will be less expensive than WDM-PON.

Meanwhile, Nortel Networks recent placed a marker on WDM-PON when its venture with LG acquired WDM-PON pioneer Novera Optics. What do you think? WDM-PON? 10G GPON? Still too busy with broadband PON or GPON to think about it? That's fine. We have a lot of time to let this particular debate unfold.

For more:
- see this report at Light Reading

Related articles:
Alcatel-Lucent is a known WDM-PON doubter. Alcatel-Lucent report
LG-Nortel recently acquired Novera Optics. LG-Nortel report

AlcaLu looking for a peerless leader

Jim O'Neill — Tue, 05 Aug 2008 08:41:51 -0400

There are some people destined to be together: Astaire and Rogers; Lerner and Lowe; Starsky and Hutch. Alcatel-Lucent Patricia Russo and Serge Tchuruk won’t be added to that list anytime soon. The Wall Street Journal today says new reports indicate the two combined like lemon juice and cream … with similar results. The two were canned after telling the board individually on July 27 (as in, “I need to talk about something but wait until he/she leaves the room,”) that they could no longer work with one another.

The alliance between American Russo and Frenchman Tchuruk apparently was doomed from the start of the 2006 merger that created the uber telecom equipment company.

Now, AlcaLu, in a semi-rudderless state, is casting around for a new executive to blame for its woeful performance. Ex-BT chief Ben Verwaayen already has turned the job down, reports the Journal. Also likely on the list of potential scapegoats, uh, CEOs: Thierry Breton, ex-chairman and CEO of France Télécom; Philippe Germond, CEO of information-technology company Atos Origin, and Comcast boss Stephen Burke.

For more:
Check out the Wall Street Journal story

Related articles:
Q2 losses helped usher duo out Alcatel-Lucent report
Could Alcatel-Lucent rule change doom Russo? Russo article
Alcatel-Lucent shareholders ease rules for CEO removal. Alcatel-Lucent story

Microsoft ordered to pay AlcaLu $512 million

Dan O'Shea — Wed, 30 Jul 2008 08:58:42 -0400

Alcatel-Lucent has had a tough week, losing its CEO and chairman, but it may collect close to $512 million after a federal judge last week upheld an earlier jury decision that Microsoft infringed on two of Alcatel-Lucent's software patents.

Microsoft and AlcaLu have been clashing in court for about five years now over a series of patents related to calendar software programs, music download processes, video encoding and other functions. Microsoft lost one round last year, and initially was ordered to pay $1.5 billion, but that ruling was overturned. In April of this year, a federal jury awarded, the Paris-based telecom vendor about $367 million in damages.

Microsoft appealed that finding, but Judge Marilyn L. Huff denied the appeal, and actually increased the amount of damages due Alcatel-Lucent to $512 million, a sum that now includes prejudgment interest to compensate for how long the legal battle has taken.

But, the legal battle is not over yet. Microsoft plans to appeal the latest ruling.

For more:
- read this report at USA Today

Related articles:
Microsoft was lost out in a jury trial last April. Microsoft report
Microsoft got bumped out of Telefonica by AlcaLu. Microsoft report

Alcatel-Lucent post huge loss; CEO, chairman step down

Jim O'Neill — Tue, 29 Jul 2008 06:50:21 -0400

For anyone who’s been waiting for the other shoe to drop at Alcatel-Lucent, that thud you heard this morning was the head of CEO Patrica Russo getting the axe after the telecom supplier announced a humongous $1.7 billion second quarter loss. Joining Russo on the unemployment line is Chairman Serge Tchuruk who, together with Russo, orchestrated AlcaLu’s merger two years ago. Both say they’ll step down by year’s end.

The size of the loss—the sixth straight quarterly red ink since the merger—stunned analysts who had expected less painful news. The company said $1.27 billion of the loss was due to a write-down of AlcaLu’s North America CDMA technology business.

The company also is trimming its board, dumping former Lucent CEO Henry Schacht. News of the shakeup sent AlcaLu shares, which have plummeted more than 60 percent since last year, up 4 percent in European trading.

Alcatel-Lucent said revenue fell 5.2 percent from a year earlier, to $6.4 billion, but said adjusted operating profit of $146 million was better than expected. Analysts had predicted $100 million.

For more:
- See the New York Times story
- Or, the story in the Wall Street Journal

Related articles:
Could Alcatel-Lucent rule change doom Russo? Russo article
Alcatel-Lucent shareholders ease rules for CEO removal. Alcatel-Lucent story
AlcaLu's losses continue in Q1 asCDMA business declines AlcaLu report