& cplSiteName &

Alcatel-Lucent CEO: We Can Go It Alone

Ray Le Maistre
5/8/2014
50%
50%

Just over a year ago, the name plate on the Alcatel-Lucent CEO office got a refresh, as Michel Combes became the first French national to take the helm at the Franco-American vendor. (His predecessors, of course, were Dutch and American -- Ben Verwaayen and Pat Russo, respectively.)

Combes moved in on April 1, 2013, and quickly stamped his authority on the company, initiating his Shift Plan (a fancy name for a restructuring process) and doing all he could to make sure the company didn't follow Nortel to the vendor scrap yard. (See Alcatel-Lucent Unveils Shift Plan and Alcatel-Lucent Builds Future Around IP.)

Since then, Alcatel-Lucent (NYSE: ALU)'s share price has tripled, from a shocking $1.32 on the day he took over to $4.02 today. That's still not great -- the company's market capitalization is still only US$11 billion. And when Alcatel-Lucent was formed in late 2006 the stock was trading above $14.00.

The CEO says he had a number of things to address. The company was "trying to do too many things," Combes told Light Reading recently. "We had lost our competitiveness, and we had a broken balance sheet. But we have innovation, which we are reigniting, and a clear vision, and we have fixed the balance sheet. We are starting to reshape." (See Alcatel-Lucent Shifts Up a Gear to End 2013 and AlcaLu Breathes New Life Into Bell Labs.)

That stock might move again tomorrow (May 9) once the company's first-quarter financials have been unveiled.

Whatever those numbers show, Combes will, of course, tell everyone that the company has a bright future as the world becomes ever more connected. The reason he may be right, of course, is that the bedrock of Alcatel-Lucent these days, and the fulcrum of Combes's Shift Plan, is the vendor's IP division, which has long been the company's shining star. And that's just as well, as the future of communications and information networks is IP -- at least for the foreseeable future. (See TiMetra at Heart of AlcaLu's Shift.)

Michel Combes has put in a decent shift as CEO of Alcatel-Lucent.
Michel Combes has put in a decent shift as CEO of Alcatel-Lucent.

The CEO has plenty of convincing to do, though, especially as questions still arise about AlcaLu's future portfolio. Does it have what it takes to make a viable business from mobile broadband access, in the face of intense competition from Ericsson AB (Nasdaq: ERIC) and a rejuvenated Nokia Corp. (NYSE: NOK)? (See Nokia Ushers In New Era, Retires NSN Name and Nokia, Juniper Team To Target Telco Cloud.)

Combes is adamant that radio access is part of the company's future. The CEO reiterated that "ultra-broadband access -- all types of fixed and mobile, from 4G, small cells, 5G," plays a critical role in the roadmap of the company. "We have absolute dedication and commitment to our own mobile broadband. The future is an IP router with a small antenna. 5G will be a small-cell-based architecture and will have to be context-aware -- that's a big challenge."

Combes is also excited about many other emerging technologies and markets. He sees massive potential in the connected car sector -- and he's clearly a fan of the four-wheeled world in general, as he names his favorite movie as Rush, the biopic of 1970s Formula 1 driver James Hunt. And he's bullish about AlcaLu's role in the shift towards virtualization in telecom networks.

"The cloud and NFV -- we are investing a lot in that space. It's the convergence of networks and IT," notes Combes, before adding that the company's SDN unit, Nuage Networks , is already well advanced in what he calls the "first stage of SDN," in the data center. The second stage is the software-defined VPN, and the third step is the virtualization of "the [enterprise] campus… There will be much less hardware on the customer premises."

He adds: "One of the biggest surprises I had when I joined was finding Nuage and CloudBand. That was a very nice surprise." (See How Alcatel-Lucent Set a Telco Cloud Example .)

The upheaval that the cloud and virtualization will bring will result in a "substantial transformation of the way networks will be managed -- they will need a distributed cloud."

And, naturally, Combes is confident his company can deliver what's needed for that. But can it deliver it alone? Will the upheaval force the vendor community into further consolidation? There is constant speculation that Alcatel-Lucent might join forces with the Networks business of Nokia (which was until very recently NSN). (See Eurobites: Alcatel-Lucent's Shares Rise on Nokia Bid Rumor.)

"I don't think consolidation is inevitable. The Shift Plan has reconnected us with cash generation, and we are now in control of our own destiny," Combes says. "That doesn't mean it won't happen, but our focus now is on our own future and building strong partnerships, like the ones we have with Qualcomm and Intel. Those are very powerful." (See Joint Qualcomm & AlcaLu Small Cells Due Mid-Year and Alcatel-Lucent announces global collaboration with Intel to speed industry move to cloud.)

For the time being, Combes is faced with squaring up to his main rivals -- Ericsson, Cisco Systems Inc. (Nasdaq: CSCO), and Huawei, he believes -- to win new business and further improve the company's fortunes. How well he's been doing lately, we'll see when the first-quarter numbers get published.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(13)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
MikeP688
50%
50%
MikeP688,
User Rank: Light Sabre
5/13/2014 | 12:44:08 AM
Re: Makes me think of
I hope so for the sake of the thousands who still work for ALU and all who depend on it especially as I saw ALU's latest quest to partner w/Australia's NEXTGEN Team... 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/12/2014 | 4:52:43 PM
Re: Makes me think of
MikeP - I don't think it's at all the case that hte train has left the station and AlcaLu has been left behind. The company's IP focus gives it a solid foundation to rebuild on. 
MikeP688
50%
50%
MikeP688,
User Rank: Light Sabre
5/10/2014 | 11:38:45 PM
Re: Makes me think of
What is gratifying to see how cheerful and optimistic he is--but it seems to me as you noted that the train has left the station and ALU has been left in the midst.   
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/10/2014 | 4:07:02 PM
Makes me think of
Alcatel-Lucent's story makes me think of another struggling company: BlackBerry.

Alcatel-Lucent is succeeding by finding its strongest pillar -- IP networking -- and rebuilding the company on that foundation. 

What strong pillar does BlackBerry have? Does it even have one? Keyboard phones are a plus for many people, but is that enough to rebuild a whole company on?
DOShea
50%
50%
DOShea,
User Rank: Blogger
5/9/2014 | 10:25:59 PM
Partnerships
Partnerships will help, but if ALU is intent on taking on the likes of Ericsson, the latter company is positioning competitively by both partnering AND acquiring. If ALU isn't going to sell the entire company, can it buy  to augment the areas it hasn't sold off already?
gronchi
50%
50%
gronchi,
User Rank: Light Beer
5/9/2014 | 7:13:49 AM
Re: About ALU CEO
You're right!

I always get lost between CEO/Chairman/President and so on...
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
5/9/2014 | 5:48:46 AM
Re: About ALU CEO
Tchuruk was chairman of ALcatel-Lucent, while Russo was CEO.
gronchi
50%
50%
gronchi,
User Rank: Light Beer
5/9/2014 | 5:45:09 AM
About ALU CEO
Just to be precise, Pat Russo was CEO together with Serge Tchuruk, French citizen, so M.Combes is not really the 1st one...

 http://en.wikipedia.org/wiki/Serge_Tchuruk

BR,

G.

 
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
5/8/2014 | 5:15:07 PM
Re: A strong and competitive ALU is good...
I think the partnerships are key too. ALU said they are going to do 4 to 5 of those, so I'll be curious to hear what the next ones focus on and who they are with.
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
5/8/2014 | 4:38:37 PM
Alcatel-Lucent CEO: We Can Go It Alone
@Heraldsvik, it sounds as it ALU's success is a win-win for everyone. 

I like their recognition of the intersection of networks and IT as being a key to further success.  You are right, if they can now execute and bring to life their development capabilities and deliverables, they will continue to hold a strong position. 

I also think they might have a good strategy with building a multi-partner network, as opposed to just merging with a single player.  This might work.
Page 1 / 2   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Interviews
    AT&T Expert on the Key Pillars of UC

    4|29|16   |   03:58   |   (0) comments


    Vishy Gopalakrishnan, AVP of product marketing at AT&T, talks about the three developments that are making unified communications and collaboration secure and reliable for enterprise users.
    LRTV Documentaries
    LRTV Report: Mobile Core Innovation

    4|28|16   |   25:32   |   (0) comments


    Hear from multiple industry experts from Deutsche Telekom, SK Telecom, Heavy Reading, Huawei, Cisco, Ericsson, Nokia, NEC and many more about developments in the mobile core as operators virtualize their IMS and evolved packet core systems and prepare for a 5G world.
    LRTV Huawei Video Resource Center
    NFV World Congress Highlight

    4|26|16   |     |   (0) comments


    The highlight of the NFV World Congress contains exciting telecom news. Join us for an inside look at Huawei's ICT 2020 plan and its latest collaboration with industry leaders.
    LRTV Interviews
    Unified Comms Finds Its Voice

    4|25|16   |   03:44   |   (0) comments


    Peter Quinlan, VP of UCC Product Management at Tata Communications, talks about the evolution of the unified communications and collaboration services sector and how voice is now a big part of current developments.
    LRTV Documentaries
    So... What Do We Do Now?

    4|25|16   |   03:24   |   (0) comments


    After a long hiatus, Max Dingman, the CEO of a GeeGhiz, returns for a motivational board room pep talk.
    LRTV Documentaries
    NAB 2016 Highlights

    4|21|16   |     |   (0) comments


    Light Reading's Cable/Video Practice Leader Alan Breznick climbs down from the slots to tell us about the latest news in broadcast technology at NAB 2016 in Las Vegas.
    Between the CEOs
    CEO Chat: Deepfield's Craig Labovitz

    4|21|16   |     |   (0) comments


    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Shades of Ray
    Leading Lights 2016: Shortlists Announced

    4|20|16   |   0:53   |   (0) comments


    The judging is over and the Leading Lights 2016 shortlists have been published -- you can see who made the cut by clicking on this link.
    LRTV Custom TV
    Introducing MulteFire – Qualcomm at MWC 2016

    4|18|16   |   3.29   |   (0) comments


    MulteFire is the latest option for using LTE in unlicensed spectrum. As oppose to its close 'siblings', LAA and LTE-U, MulteFire operates solely in unlicensed spectrum, which enables it to offer the best of two worlds – LTE-like performance with WiFi-like deployment simplicity. In this interview, Sanjeev Athalye, Sr. Director, Product Management at Qualcomm ...
    Between the CEOs
    CEO Chat: Grant Van Rooyen of Cologix

    4|18|16   |     |   (0) comments


    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    LRTV Huawei Video Resource Center
    ONS 2016 – Demonstration of Huawei's NetMatrix Multi-Vendor SDN Orchestrator

    4|15|16   |     |   (0) comments


    This demonstration shows how Huawei's NetMatrix SDN Orchestrator (SDN-O) addresses an operator's core service agility needs for services spanning multi-domain, multivendor networks: it includes a demonstration of:
    - Rapid New Service Design: using YANG to model a complex example of multi-domain, multivendor L3VPN network connectivity service that ...
    LRTV Custom TV
    AT&T Wants to Own North Carolina

    4|15|16   |     |   (1) comment


    Venessa Harrison, president of North Carolina for AT&T, tells how the company will expand its GigaPower service beyond the seven N.C. cities it already serves.

  • This blog, sponsored by AT&T, is the second part of a ten-part series examining next-generation broadband technologies titled "Behind the Speeds."
  • Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Ultra-Broadband Summit, Hong Kong
    Iain Morris, News Editor, 4/27/2016
    WiCipedia: Woman Cards & Bitch Switches
    Sarah Thomas, Director, Women in Comms, 4/29/2016
    FCC Poised to Re-Regulate Wholesale Access
    Carol Wilson, Editor-at-large, 4/28/2016
    Mitel Asks: What Time of Day Do You Shower?
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/25/2016
    GoT Fans Curse HBO (Not Right) Now
    Mari Silbey, Senior Editor, Cable/Video, 4/25/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.