Lucent Technologies Inc. (NYSE: LU) has discontinued development on a high-end core ATM switch, just when it was due to go into production.

The company confirmed this morning that it's ceasing work on the MSC 25000 Multiservice Packet Core Switch, which was released as a "new flagship" in the vendor's core switching portfolio this past June (see Lucent Intros Products, Upgrades).

"We've been in the process of conducting product portfolio re-evaluations and making some tough decisions," says Lucent spokesperson Michael Alva.

The move magnifies the difficulty that large telecom equipment companies such as Lucent and Nortel Networks Corp. (NYSE/Toronto: NT) are having in making the transition from older networking switches based on ATM (Asynchronous Transfer Mode) to next-generation multiservice products. This transition has been made especially difficult by the carrier spending decline, stock-market crash, and severe financial problems.

As part of its restructuring program, Lucent has been on a mission to "rationalize" its product line, weeding out whatever appears to be slowing down the overall goal of selling to big carriers. So far, the axe has fallen on several products, including the DWDM gear Lucent acquired through its purchase of Chromatis (see Lucent Ditches Chromatis) as well as some low-end platforms in its Metropolis product line (see Optical Team Seeks Group Gig).

Lucent says the big carriers lack firm interest in the features targeted for the initial release of the MSC 25000. Instead, they're focusing on core products with high-speed IP and MPLS quality-of-service capabilities. While these features were in the MSC 25000 roadmap, Alva admits, Lucent couldn't have gotten them in the switch fast enough to suit initial takers.

Other vendors agree that carriers increasingly want MPLS with their ATM core switches. "The ATM market is alive and well," asserts Bob Sullebarger, VP of marketing and business development at Équipe Communications Corp.. He stresses, however, that customers want a clear path to MPLS as an add-on to existing products.

Others agree. "We see very strong interest in ATM core switching," says Adam Twarog, director of marketing and business development at the Carrier Internetworking Division of Alcatel SA (NYSE: ALA; Paris: CGEP:PA).

He says most carriers continue to support connection-oriented networks for frame relay and ATM alongside connectionless IP and routing faclities. Increasingly, they see MPLS as being instrumental in helping to manage both. Alcatel says many customers are testing out its MPLS capabilities for the 7670 Routing Switch Platform (RSP).

Équipe and Alcatel continue to pour effort into their ATM core switches. Équipe plans to ship its own product later this year -- at about the time Lucent would have debuted the MSC 25000. Other big players, including Nortel, say plans are on track for new products as well.

None of these vendors is likely to mourn the loss of a competing product. And they might have another to contend with yet: before the end of the year, Lucent plans to replace the MSC 25000 with a new "high speed" multiservice switch -- one that supports frame relay, ATM, and IP in one platform with IP quality-of-service and MPLS capabilities.

But Lucent is keeping mum on specifics. It won't say what it means by "high speed," or whether the new switch will build on the technology originally developed for the MSC 25000.

Also not being addressed are rumors that the facility in Westford, Mass., charged with MSC development, will suffer layoffs as a result of the product discontinuation. "We won't comment on rumors and speculation," Adva says.

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com