Oak, Soros Buy Lucent's Excel
The deal may work out better for everybody involved. Excel, which by most measures has remained fairly independent while owned by Lucent, will receive a new injection of cash and could be rejuvenated by becoming a private company and having a management team solely focused on its products. Lucent will shed yet another high-priced acquisition that has likely suffered in the recent downsizing, yet it will retain a relationship with Excel via a reseller agreement.
It all points to the Lucent’s move to forge ahead with an emphasis on OEM (original equipment manufacturer) reseller deals and a services business model, as witnessed by recent deals with Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) (see Lucent Partners With Juniper and Lucent & Cisco: Together at Last).
”This isn’t terribly surprising, given Lucent’s recent strategy to have OEM partnerships,” says Dan Klein, an analyst with the Yankee Group. “Lucent is really shifting its focus to services.” Marc Zionts, the former CEO of a wireless infrastructure provider Airslide Systems, will be the CEO of the newly private Excel. J.C. Murphy, a former VP with Excel who stayed through its acquisition by Lucent, will be the president.
”Lucent’s need to own Excel as a product was not as important as being the end solution provider,” said Murphy in an interview with Light Reading. “This is another move by Lucent to focus on things they do best.”
Excel will be profitable and will have about 160 employees in its new incarnation, according to the new Excel executives. In addition to having the OEM relationship with Lucent, Zionts and Murphy say the company will pursue deals with other large companies, such as Motorola Inc. (NYSE: MOT) and Qualcomm Inc. (Nasdaq: QCOM) to develop applications that tie together both wireless and wireline IP telephony applications. Excel’s PC-based software platform, called Converged Platform Services, has been used in the telecom market for functions such as unified messaging, softswitching between TDM and IP networks, and prepaid wireless services. Recently it added compatibility with SIP and H.323 Internet conferencing standards.
One question looming is how Excel will pursue deals with companies such as Motorola, while maintaining the revenues via its Lucent OEM partnership. Motorola recently acquired its own softswitch startup, Winphoria Networks (see Motorola Eats Winphoria), and seems keen on gaining a big piece of the softswitching market.
— R. Scott Raynovich, US Editor, Light Reading
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