& cplSiteName &

TiMetra at Heart of AlcaLu's Shift

Ray Le Maistre
6/20/2013
50%
50%

The telecom sector's history is littered with misguided and overpriced acquisitions that have proven expensive, flawed, damaging and sometimes even fatal. But occasionally there's a gem and Alcatel-Lucent's US$150 million acquisition of IP router startup TiMetra in 2003 is not only a candidate for vendor acquisition of the century but, arguably, has proven to be life-saving.

One can reasonably argue that Alcatel-Lucent would have already been dismantled, or gone the way of Nortel, if it wasn't for the IP division that was built from that acquisition a decade ago.

That deal was brokered even before the TiMetra team, led by Basil Alwan, had shipped a commercial product. And not everyone thought it a good move at the time. As Light Reading reported, one venture capitalist was highly cynical in an email comment: "What a ridiculous price. I'd like that banker representing TiMetra to be on my team! He can sell ice to Eskimos!" (See Alcatel & TiMetra Seal the Deal.)

Incredibly, 10 years on, Alwan is still at Alcatel-Lucent, and, not surprisingly, is one of the vendor's shining stars. The company has a lot to thank him for, beyond sticking with the cause. The IP division, from a standing start, has grown steadily during the past decade and is battling Huawei Technologies Co. Ltd. for the number two spot behind Cisco Systems Inc. in the global router market share pecking order, according to Infonetics Research Inc.

Now Alwan's business unit (which includes the optical gear as well as the IP routing platforms) is at the heart of the vendor's "Shift Plan" to resurrect the vendor. (See Alcatel-Lucent Builds Future Around IP.)

Alcatel-Lucent CEO Michel Combes, who has been with the company only a matter of months, even name-checked TiMetra as he explained how Alwan's group will be responsible for driving sales and margin growth in the next few years.

Alcatel-Lucent's 2012 financials show how important the IP division has been: Its revenues increased by 24.2 percent year-on-year to reach €1.97 billion (US$2.6 billion), about 23 percent of the company's networks sales and nearly 14 percent of the vendor's total sales for the year. And while IP equipment sales increased, optical and mobile infrastructure revenues declined year-on-year, while fixed-line product sales were flat.

The IP division is also at the heart of the vendor's software-defined networking (SDN) efforts. (See Alcatel-Lucent Spins Up Its SDN.)

Does Alwan's IP and optical group have what it takes to keep Alcatel-Lucent afloat? Perhaps, if Combes can line up and execute all the separate parts of his plan (which include all sorts of cost cuts and financial maneuvers).

But without Alwan and the TiMetra legacy, Combes would likely have nothing to keep afloat.

— Ray Le Maistre, Editor-in-Chief, Light Reading

(9)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
ip-router-eng
50%
50%
ip-router-eng,
User Rank: Light Beer
7/8/2013 | 3:02:11 PM
re: TiMetra at Heart of AlcaLu's Shift
Garci- The heart of ALU's IP is also in Kanata. And yes, Kanata is the heart of the other stuff you mentioned.
Garci
50%
50%
Garci,
User Rank: Light Beer
7/6/2013 | 2:59:50 AM
re: TiMetra at Heart of AlcaLu's Shift
The heart of ALU's IP is in mountain view, but Ottawa (Kanata) is the heart of the mobile backhaul division, a huge chunk of the newtork management component and all the ATM/POS/Timing side of the house
ip-router-eng
50%
50%
ip-router-eng,
User Rank: Light Beer
6/26/2013 | 2:21:11 PM
re: TiMetra at Heart of AlcaLu's Shift
myhui - answer to your 3 questions is yes, really yes, and yes IP R&D.
Sacha Gera
50%
50%
Sacha Gera,
User Rank: Light Beer
6/23/2013 | 11:08:53 PM
re: TiMetra at Heart of AlcaLu's Shift
The heart of ALUs IP r&d is done in Ottawa stemming from the original newbridge office... 2300 engineers
myhui
50%
50%
myhui,
User Rank: Moderator
6/22/2013 | 2:30:13 AM
re: TiMetra at Heart of AlcaLu's Shift
ALU bought Newbridge? Really? Do they still have an R&D presence in Ottawa, Canada?
ip-router-eng
50%
50%
ip-router-eng,
User Rank: Light Beer
6/21/2013 | 8:51:23 PM
re: TiMetra at Heart of AlcaLu's Shift
Let's not also forget the Newbridge acquisition.
jj
50%
50%
jj,
User Rank: Light Beer
6/21/2013 | 5:15:50 PM
re: TiMetra at Heart of AlcaLu's Shift
If ALU has acquired RedBack then they would have been dead long back. Ericsson is struggling to get anything from Redback acquistion other than burning money for useless R&D.
Ray Le Maistre
50%
50%
Ray Le Maistre,
User Rank: Light Sabre
6/21/2013 | 11:31:10 AM
re: TiMetra at Heart of AlcaLu's Shift
It has been suggested on Twitter that I may have forgotten about the fixed broadband access part of ALU's business in my assessment. BUt I hadn't - I hadn't forgotten any part of it. My contention is that without the IP division, Alcatel-Lucent would not exist today in its current for, if at all. The IP division has propped the company up for the past few years and an argument could be made that the IP division has a greater market value than the whole of ALU.

Of course, this is all just opinion. Without TiMetra Alcatel may have developed something inhouse that was even better, or maybe Lucent would have. OR maybe it would acquired Redback instead of Ericsson. We don't know.

Right now, though, my view is that the ALU team has the IP division to thank for even being able to execute a turnaround strategy.

I'm more than happy to be told how wrong I am...
bibliotastic
50%
50%
bibliotastic,
User Rank: Light Beer
6/21/2013 | 11:21:20 AM
re: TiMetra at Heart of AlcaLu's Shift
Yep, the TiMetra acquisition is the exception that proves the rule - most tech M&A is value destructive (except for the VC sellers, bankers and lawyers).
More Blogs from EuroBlog
Having taken a breather from its acquisition spree in the US, Zayo could kick-start some infrastructure consolidation action in Europe
Some good news for its Finnish parent – Nokia Siemens Networks is on a margin roll
Telefónica to boost its broadband lines in LatAm with DSL management the from ASSIA
According to the value of Nokia's takeover deal, Nokia Siemens Networks is worth less than $5B
As APAC and North America forge ahead, Europe seems stuck in yesteryear
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
Apple, Qualcomm Lock Horns Over Licensing

1|24|17   |   01:07   |   (0) comments


Industry giants clash over licensing fees.
LRTV Interviews
Heavy Reading: The Web-Scale View

1|18|17   |     |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's former chief analyst Patrick Donegan shared insight from the recent web-scale operators report, which featured research on how web-scale operators view the market, the best web-scale companies to ...
LRTV Custom TV
Cisco's Cloud Scale Networking: Automation, Virtualization & Simplification

1|18|17   |     |   (1) comment


Cisco's Sanjeev Mervana outlines the latest innovations in networking technology at CES 2017 in Las Vegas.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
A Women in Comms Glossary
Sarah Thomas, Director, Women in Comms, 1/18/2017
Is Cable One Beefing Up for Slaughter?
Alan Breznick, Cable/Video Practice Leader, Light Reading, 1/20/2017
Google Security Lessons for IT
Curtis Franklin, Security Editor, 1/18/2017
TV's Paradox: No HDR Without 4K
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Nokia CTO: 2017 Is the Year 5G Gets in the Field
Dan Jones, Mobile Editor, 1/19/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
You've Heard of Slow Food? Click Here
This is slow tech.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.