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Quigley Talks IP and M&A

Alcatel (NYSE: ALA; Paris: CGEP:PA) president and COO Mike Quigley is in control of a company that has a worldwide stake in the future of IP access networks and fixed/mobile convergence. So, naturally, his insights on where Alcatel is going -- and what tech areas it sees as important -- are as useful for venture capitalists funding startups as they are for carriers planning their networks.

And, in his first interview with Light Reading TV, Quigley didn't disappoint. He addresses a variety of topics, from WiMax and its impact on fixed networks, to Alcatel’s recent move into GPON. He even talks frankly about his position as a likely successor to Alcatel CEO Serge Tchuruk (see Alcatel Says 'Oui' to GPON).

The LRTV interview with Mike Quigley is found here: Full Transcript of LRTV's Interview With Mike Quigley, Alcatel President & COO.

One specific item of interest was Quigley's comments on Alcatel's relationship with Microsoft Corp. (Nasdaq: MSFT) -- and how the company ceded one market so it could spur carrier deployments in an even bigger field.

When Alcatel abandoned its field-proven IPTV middleware solution in favor of an unfinished solution from Microsoft, it was a curious strategic move (see Alcatel's IPTV U-Turn).

“It was no easy or obvious move for us to partner with Microsoft, but we took the view of the long term," Quigley says in the interview.

By taking the long-term view, Quigley refers to the potential upside for Alcatel in an IP equipment and infrastructure market that has been energized by Microsoft’s entrance.

Indeed, some have said that Alcatel's involvement in IPTV software was a key means of creating demand for its IP edge routers and access gear (see IP DSLAM Revenues Jump 20% and IPTV Alters Network Landscape). And IP middleware vendors were relieved to see one fewer competitor.

“You know, Alcatel wants to sell infrastructure, and that’s what they’re good at,” says CEO Mauro Bonomi of competing middleware player Minerva Networks Inc. Bonomi believes that Alcatel may have seen IPTV as the service that would spur the telcos to speed up deployments.

Alcatel entered the IPTV middleware market in 2003 by acquiring two firms -- iMagic and Thirdspace -- and proceeded to deploy the middleware in more than 20 telco networks worldwide (see Alcatel Denies iMagic Fadeout).

And, though it was making progress, Quigley says that the real way for it to drive standards, integration, and lower-cost deployments, was to cooperate with Microsoft rather than to square off against the software giant: "Clearly the coming together of two large companies… really could have a major effect on driving the industry forward."

The tough choices Quigley has been faced with over the years also extend to the IP routing space, where Alcatel decided to acquire a service edge router company rather than build its own core router.

"We looked for a company that would have a good service edge router that could do two jobs for us," Quigley says. "One, it could be part of our overall triple-play solution… The other part was to make sure we provide both the Layer 2 and Layer 3 VPNs." (See Alcatel Eyes Video Market.)

— Mark Sullivan, Reporter, Light Reading

ecipo 12/5/2012 | 3:08:32 AM
re: Quigley Talks IP and M&A Dresdner Kleinwort Wasserstein stated lately: there are indications that Alcatel's competitive position in the next generation systems segment is weak and that the company is experiencing pricing pressures.
http://www.newratings.com/anal...
Any ideas in which next generation systems Alcatel competitive position is weak?
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