& cplSiteName &

Matchmaking NSN

Ray Le Maistre
8/2/2012
50%
50%

7:05 AM -- Speculation about a potential merger between Alcatel-Lucent (NYSE: ALU) and Nokia Networks has increased again recently as both vendors try to restructure their way out of trouble. AlcaLu CEO Ben Verwaayen has countered that speculation this week as he discusses his company's current challenges. (See Alcatel-Lucent: Too Little, Too Late?)

But for those interested in NSN's future, you should check out the excellent analysis of potential suitors by Heavy Reading Senior Analyst Patrick Donegan. He argues that of all the possible partners -- including Ericsson AB (Nasdaq: ERIC) and Samsung Corp. -- NEC Corp. (Tokyo: 6701) is the most likely to make a move. There are a number of reasons why that makes sense. (See Who's Going to Buy NSN?.)

Donegan makes a great case for NEC from a macro-economic, cultural, historical and technology perspective. But, digging a bit deeper, there's another reason the NEC/NSN combination makes sense -- it's to do with Service Provider Information Technology (SPIT).

Modern communications equipment vendors can't get by with just great network equipment any more. They need a services (consultancy, systems integration, managed) element, strength in telecom software and IT systems (OSS, BSS, cloud platforms and so on) and global reach and scale.

The strong market leaders, Ericsson and Huawei, have recognized this -- that's why Ericsson acquired Telcordia. NSN also believes this: Its renewed focus is on mobile broadband systems, professional services and Customer Experience Management (CEM), an increasingly important strand in the SPIT sector.

But NSN's broader SPIT story lacks breadth, especially in terms of a broad OSS, BSS and cloud services support systems portfolio. As a major IT/cloud systems vendor, NEC would be a great parent to help NSN be a stronger IT transformation partner to communications service providers (CSPs).

And in building the telecom software side of its portfolio, NEC has shown an appetite for acquisitions. In June 2008 it bought OSS firm NetCracker for US$300 million and subsequently merged it with its existing telecom software assets to create a SPIT giant. Then a few months ago it splashed out $449 million to add billing, customer care and revenue management capabilities to its portfolio by acquiring Convergys Information Management. (See NEC to Buy Convergys Unit for $449M and NEC Shells Out $300M for NetCracker.)

NEC also has a strong mobile backhaul product line that would fill a hole at NSN, which sold its backhaul unit as part of its restructuring process. (See DragonWave to Buy NSN Unit.)

And it's a leading force in one of the most exciting areas of networking development -- software-defined networking (SDN). (See NEC Enhances OpenFlow-based SDN Fabric.)

There are, then, a number of factors that favor a NEC/NSN tie-up. As Donegan points out, such a move would "take a marked break in NEC's corporate culture," but as he also notes, stranger things have happened.

— Ray Le Maistre, International Managing Editor, Light Reading

(13)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
exon
50%
50%
exon,
User Rank: Light Beer
12/5/2012 | 5:25:03 PM
re: Matchmaking NSN


and the name is ALNSN? or maybe "bell labs" (seems to be the only thing left standing with some brand quality)....


anyway if you just consider the portfolios, they have many complementary parts, no doubt about that - NSN recent ditching of Juniper makes it more sensible too. but how on earth they are going to organize this monster (size-wise but mainly complexity-wise) and compete?


This could work if the management stays FAR away from Paris, if they dispose whole parts BEFORE they merge (i could think of the services alltogether to make for leaner organizations).


But who is going to engineer the deal? merkel and hollande?

yarn
50%
50%
yarn,
User Rank: Light Sabre
12/5/2012 | 5:25:02 PM
re: Matchmaking NSN


Another merger is the last thing that ALU or NSN needs right now. Management of both NSN and ALU needs to put their entire focus on stabilizing the patient and nursing it back to health.

FastCache
50%
50%
FastCache,
User Rank: Light Beer
12/5/2012 | 5:25:00 PM
re: Matchmaking NSN


Any of these M&A scenarios is likely to result in the accelerated demise of all concerned. Alcatel-Lucent continues to be in denial. Merging with someone else is hardly going to help the process of a turnaround.


Better to exit poorly performing businesses and to focus on true value creating ones.  Customers need to decide who are their strategic suppliers for each part of their network. Subscale players in any technology area cannot serve their customers with the sustained innovation required.

pdonegan67
50%
50%
pdonegan67,
User Rank: Light Sabre
12/5/2012 | 5:24:59 PM
re: Matchmaking NSN


Can't say I agree that any of these scenarios will likely lead to the acclerated demise of the acquirer. NEC and Samsung, for example, have a lot to gain from acquiring NSN's account footprint, and potentially some of their product line too. Neither firm has the scope to aggressively leverage price and financial terms as Huawei has done to break into so many accounts.

pdonegan67
50%
50%
pdonegan67,
User Rank: Light Sabre
12/5/2012 | 5:24:58 PM
re: Matchmaking NSN


Historically I would agree with you but I think Japan's business culture with respect to international M&A may be changing faster than you think.


The barriers to undertaking a huge deal of this kind are lower than they were a couple of years ago and they may be set to go lower still.


That doesn't make NEC a shoe-in for this deal. But it does means they are a much more plausible candidate for this than they would have been just two or three years ago.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:24:58 PM
re: Matchmaking NSN


At least the bit about culture.  The Japanese are really not big on any acquisitions and large ones are very out of the norm.


I think that breaking up these firms and selling off some pieces seems the right thing.  They don't seem to understand portfolion management at all.


seven


 

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:24:56 PM
re: Matchmaking NSN


 


I would say that it might be so...and NEC would be the last buy that happens.  Imagine what happens at NSN when every senior manager in the company is fired to be replaced by a Japanese manager.  Should be a great sport to watch them wipe out the dirty gaijin.  :)


 


seven


 

pdonegan67
50%
50%
pdonegan67,
User Rank: Light Sabre
12/5/2012 | 5:24:53 PM
re: Matchmaking NSN


Can't agree with you there, I'm afraid. I can't see the bulk of NSN giving Cisco or Juniper anything much besides margin dilution.

allip
50%
50%
allip,
User Rank: Light Beer
12/5/2012 | 5:24:53 PM
re: Matchmaking NSN


NSN might be a good fir both Cisco and Juniper who have been gearing up to enter


the 4G wireless infrastructure market..

Soupafly
50%
50%
Soupafly,
User Rank: Light Sabre
12/5/2012 | 5:24:53 PM
re: Matchmaking NSN


What about Dimension Data?


Are they so outlandish......?

Page 1 / 2   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
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
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Friday, September 30, 1:00PM EDT
Gigabit & the Great Migration
Robert Howald, Vice President, Network Architecture, Comcast
UPCOMING COURSE SCHEDULE
Wednesday, October 5, 1:00PM EDT
Gigabit & Smart Cities
Joe Kochan, COO & Co-Founder, US Ignite
Friday, October 7, 1:00PM EDT
Gigabit & DOCSIS 3.1
Ty Pearman, Director, Access Architecture, Comcast
Wednesday, October 19, 1:00PM EDT
Securing a Virtual World
Rita Marty, Executive Director, Mobility and Cloud Security, Chief Security Office, AT&T
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
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 Interviews
CenturyLink: SDN/NFV Pose New Interconnection Possibilities

9|28|16   |   04:37   |   (0) comments


Network operators should develop new APIs and business processes for reselling virtual assets to each other, says CenturyLink's Bill Walker. That will enable them to build digital business portfolios that help them avoid becoming commodity transport providers.
LRTV Interviews
Level 3: Overcoming Terror of Being Supplier, Integrator & Developer

9|28|16   |     |   (0) comments


At Light Reading's NFV & Carrier SDN event in Denver, Travis Ewert of Level 3 Communications said there is terror in becoming supplier, integrator and developer, but it can be overcome and be cost effective.
LRTV Custom TV
Introducing IoT World News

9|27|16   |   01:43   |   (0) comments


Self-driving cars, medical sensors, smart cities... and refrigerators. In order to address the huge scope of IoT, KNect365 has created a unique online community that will help businesses to understand and monetize the opportunities that live within the IoT market. We look forward to welcoming you to IoT World News -- your gateway to a better connected future.
LRTV Interviews
AT&T: Re-usable Functions Next NFV Key

9|27|16   |   06:03   |   (0) comments


The next generation of NFV has to break functions down into re-usable software chunks, making everything much more cloud-like.
LRTV Interviews
Masergy on Security: Attackers Gaining Upper Hand

9|27|16   |   5:10   |   (2) comments


At Light Reading's NFV & Carrier SDN event in Denver, Ray Watson, vice president of Global Technology at Masergy, says that because of the growth in virtualization, the threat landscape is shifting in favor of the attackers. As a result, service providers need to think beyond just defending the perimeter and take a more holistic approach to security.
LRTV Interviews
Verizon Takes Next Step on Biz Virtualization Journey

9|26|16   |   4:38   |   (2) comments


At September's NFV & Carrier SDN event in Denver, Light Reading sat down with Victoria Lonker, director of Product and New Business Innovation at Verizon, to chat about where the carrier is with delivering virtualized services to business customers.
LRTV Interviews
Global Services: The $40B Face-Off

9|26|16   |   05:53   |   (1) comment


More service providers than ever before are battling it out to win a slice of what is now a $40 billion global communications services pie, explains Ovum Principal Analyst David Molony.
LRTV Documentaries
MEC Congress: The Key Takeaways

9|22|16   |   03:25   |   (3) comments


Three key takeaways from the Mobile Edge Computing (MEC) Congress in Munich, Germany.
Wagner’s Ring
Time to Shut Up About 'Dumb Pipes'

9|22|16   |     |   (12) comments


Service providers can't compete with OTT players. It just isn't in their DNA. Instead, service providers need to embrace what they're good at -- providing reliable, secure connectivity.
Wagner’s Ring
Keeping Your Tech Career Going After 50

9|21|16   |     |   (13) comments


How do you keep your career moving forward when you're past the half-century mark?
LRTV Interviews
Peering Into the Digital Future

9|20|16   |   04:25   |   (0) comments


Nick Thomas, practice leader of digital media at Ovum, talks about how digital transformation in the technology, media and telecom sectors will enable the development of a new range of applications and services for enterprises and consumers and how the upcoming Digital Futures event in London will examine ...
LRTV Custom TV
Napatech Tackles NFV's Major Challenge

9|7|16   |   08:42   |   (0) comments


One of the main challenges for network operators introducing NFV is to combine performance and flexibility in a cost-effective way, but there is a solution, explains Napatech's Dan Joe Barry.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Time to Shut Up About 'Dumb Pipes'
Mitch Wagner, West Coast Bureau Chief, Light Reading, 9/22/2016
Verizon CFO: Eat Our (Fixed) 5G Dust!
Dan Jones, Mobile Editor, 9/22/2016
WiCipedia: The Women Helping Women Edition
Eryn Leavens, Special Features & Copy Editor, 9/23/2016
Eurobites: Telefónica Taps Juniper for Network Security
Paul Rainford, Assistant Editor, Europe, 9/26/2016
Open Source Getting on My Nerves
Carol Wilson, Editor-at-large, 9/26/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
There's Nothing Like Missing a Full Minute of Pokémon Go Click Here
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.