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AlcaLu: The Network Integrator

Michelle Donegan
News Analysis
Michelle Donegan
11/28/2007

Alcatel-Lucent (NYSE: ALU), Light Reading's Top Turkey, jazzed up its services business group today with a new marketing logo and five key business areas that it will focus on for future growth.

AlcaLu's services business group is key to CEO Pat Russo's new restructuring plan and growth strategy, which she announced on Halloween with the company's third-quarter results. Russo said there would be a greater focus on "high value added services and applications for the carrier markets" and "solutions for the enterprise markets and industry and public sector." (See AlcaLu Cuts 4,000 More Jobs, AlcaLu Revamps Its Carrier Business, and AlcaLu Reports Q3.)

The services business group is led by John Meyer, who is not a musician, but is one of the seven-member top executive team that reports to Russo. The group reported revenues of €2.1 billion (US$3.1 billion) for the first three quarters of 2007, which is an increase of 3 percent compared with the same period in 2006. Meyer said he expected full-year revenues for his group to be somewhere in the range of €4 billion ($6 billion), but about €1 billion ($1.5 billion) of that will be recorded in the products business group as services related to product deployments. (See Russo Shakes Up AlcaLu's Top Team.)

To mark its growing importance to AlcaLu's overall business, the services group has created a new marketing logo:

"We define ourselves as the network integrator," says Meyer. "[Networks] are going to be complex as hell… and I'm going to be integrating all of that."

When Light Reading asked whether the network integrator will become the logo and marketing line for all of Alcatel-Lucent as a company in the future, Meyer told us, "If we're successful, maybe… if we really do a good job."

His answer could be interpreted as an indication of Alcatel-Lucent's longer-term future direction. But for now, the network integrator role is confined to Meyer's services group.

"Internally, I want our people to start thinking this way… and we want to create an identity for the ourselves in the market," he says.

The services group will focus on the following five service areas: IP transformation; multi-vendor maintenance; applications integration; managed services and network operations; and industry and public sector.

AlcaLu recently rebranded the industry and public sector area, which is led by Michael Fabian, president of industry and public sector. This sector basically comprises non-carrier customers and focuses on the transport, energy, and government sectors.

"It's a great hedge against the carrier business," says Fabian.

"This business runs on references. They're like a club," he says of the public sector. "If you're in with the Paris Metro, you can go to London Underground… The doors are completely open to you."

Recent customer wins in this sector include a deal to deploy an observation tower system in Poland to assist the Polish Border Guard with monitoring its Eastern border. Another example is a €34 million ($50 million) contract to design and deploy a communication, security, and IT system for the King Shaka International airport just north of Durban, South Africa.

— Michelle Donegan, European Editor, Light Reading

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foton
foton
12/5/2012 | 2:58:06 PM
re: AlcaLu: The Network Integrator
Wow - well done Pat! When the chips (fries?) are down, you reach back into the cupboard and pull out a previous stategy - the "We'll be the Network Integrator" plan. If I remember right, sometime round about 2001/2 when Murray Hill had sucked the life out of all the acquisitions (IPSS, Nexabit, Chromatis etc. etc.) and there was nothing sexy in R&D, being the Network Integrator was launched as Lucent's killer strategy. To be fair, the viewgraph skills weren't being used on logo development and we were busy sending Kudos cards to each other....Oh well, let's hope your new French management team think it's shiny and new and buy it.
jasanz
jasanz
12/5/2012 | 2:58:05 PM
re: AlcaLu: The Network Integrator
I think that it sounds good... LWS had a very strong brand and analysts were praising how advanced their 3rd party integration story was before the merger... So it makes sense to give John Meyer the chance to continue what started 4 years ago.

Even if I dont like logo :) I think that there are not many companies out there ready to take responsibility for being prime integrator for a SPs... That is a pretty nightmare, dont you think?
gocowboys
gocowboys
12/5/2012 | 2:58:03 PM
re: AlcaLu: The Network Integrator
Absolutely!

I remember when Lucent announced that they were defocusing the equipment business and entering the systems integration business. I think that Pat was trying to copy IBM at that time.

This whole thing remains idiotic. I would think that the investment community would smell a rat when Pat announces that the growth will come from systems integration. This is a telecommunications equipment company after all.

Pat needs to go...any strategy beyond that is myopic.
Michael Poole
Michael Poole
12/5/2012 | 2:58:02 PM
re: AlcaLu: The Network Integrator
New? What's new?

It must be a good 10 years ago that Alcatel (not Lucent) bought all my erstwhile engineering and planning mates at Telecom NZ lock, stock and barrel. They're now Alcatel staff, and have been for ages. I have a suspicion that the very idea of a supplier designing, building and managing a carrier's network even came out of NZ (not sure whether it was Alcatel or Telecom that thought of it, though). I suspect I can name some of the culprits, but of course I shan't.

M
bbasmdc
bbasmdc
12/5/2012 | 2:58:01 PM
re: AlcaLu: The Network Integrator
Key finding from a 4 year old Heaving Reading report...

"Lucent is abandoning its own convergence products in favor of re-inventing itself as a service organization. It will fail"

http://www.heavyreading.com/de...

Harsh, but true :-)
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