AlcaLu Touts IP Upgrades

LONDON -- Alcatel-Lucent (NYSE: ALU)'s wireline chief says the company is focused on gaining more share of the routing market, and that it aims to do that through investments in technologies such as Deep Packet Inspection (DPI) and policy management.

In a briefing here in the City, Michel Rahier, president of the vendor's wireline business group, says such technology will draw carriers to the AlcaLu platform. Redundancy features were beefed up in the product line earlier this year. (See AlcaLu Tunes Up Redundancy.)

Rahier says the mission is to continue to eat market share from Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NYSE: JNPR). He claims his division currently holds the No. 2 position in the IP edge service routing market with 22 percent, citing first-quarter 2007 statistics from Synergy Research Group Inc. That's still way behind Cisco's 56 percent but ahead of Juniper's 10 percent and the 6 percent that Ericsson AB (Nasdaq: ERIC)'s Redback Networks Inc. business commands. (See Agilent, Sequans Team.)

"In the past 18 to 24 months we have built up to 22 percent, taking 10 percent from Cisco and 12 percent from Juniper, and we're growing our market share at 1.5 percent per quarter," says Rahier.

Specifically, the company plans to add DPI capabilities into the 7750 service router platform, and integrate "service- and application-aware policy enforcement" capabilities into the 7750, the 7450 Ethernet aggregation switch, and the ISAM multiservice broadband access platform. (See Deep Packet Inspection .)

Rahier says that adding such capabilities to these network edge platforms is meeting the needs of carriers that want integrated, decentralized subscriber and service management capabilities.

The policy management capabilities, which help carriers manage their network resources to gain control over the delivery of services such as IPTV, have been developed using the experience gained from the collaboration with Bridgewater Systems Corp. (Toronto: BWC) (See Alcatel Launches Service Manager, Who Makes What: IP-Based Services Control, and Broadband Policy Servers.)

Alcatel-Lucent's IP business, founded on the acquisition of Timetra back in 2003 and led by Basil Alwan, is pushing hard on R&D to ramp up that share even further, says Rahier. (See AlcaLu Exec Wins Popularity Contest and Alcatel & TiMetra Seal the Deal.)

"It's not just about digesting Timetra. We are going to continue to invest in the next generation from a technology and product point of view. We have been first to address IP routing with QOS, but Cisco and Juniper have woken up and have announced it, too. We have a lot of developments to continue to leapfrog the competition in the coming years," claims Rahier. (See Juniper Pushes Services Policy and Cisco Catches Integration Fever.)

One area that's not receiving any investment, though, is the Ethernet switch technology Lucent took on board when it acquired Riverstone in March last year. Rahier says the 7750 and 7450 are "the products of choice." He notes that Riverstone had five significant deployments, and that Alcatel-Lucent is working with those customers to provide them with the support they need and a technology migration path. (See Telefónica Uses Lucent/Riverstone Combo and Riverstone Wins in Korea -- Again.)

The Alcatel-Lucent man also had time to take a swipe at PBT (Provider Backbone Transport), the carrier Ethernet technology that is beginning to divide the industry and get under the skin of the IP router vendors that don't want a new approach to Ethernet transport raining on their MPLS parade. (See PBT Parties On, Verizon Preps God Box RFP, AlcaLu: PBT Is Peripheral, Huawei Joins PBT Fan Club, and Cisco Tracks PBT Standards Process.)

"Ethernet over MPLS is the way to go for carriers. Compared with some other technologies that are being pushed by some of our competitors, such as PBT, we believe this is an offering that is much more standardized and comes at about the same cost point as PBT. We are showing our customers that Ethernet over MPLS is the right way." (See Nortel Pushes PBT Pact and NSN Touts PBT.)

— Ray Le Maistre, International News Editor, Light Reading

einstein 12/5/2012 | 3:05:39 PM
re: AlcaLu Touts IP Upgrades "One area that's not receiving any investment, though, is the Ethernet switch technology Lucent took on board when it acquired Riverstone in March last year"

An interesting question remains why does Lucent want to buy Riverstone back then in 2005 when they announce the Merger? Why spend USD400m over and then decide to kill it? Because of the marketshare? Just 5 valuable customers as pointed out? USD400m cash is a lot of money or maybe not for ALU.
einstein 12/5/2012 | 3:05:38 PM
re: AlcaLu Touts IP Upgrades Ray,

I agreed that Riverstone and Lucent are walking quite closely for a year or so. I think Telefonica IPTV, triple play integration by Lucent was much after the merger. Lucent basically takes over maintenance of the Telefonica self-developed IPTV middleware. The much earlier system or triple Play was done very much by Telefonica. Lucent was just the System Integrator or reseller of Riverstone into the DSL network (was it called Imagenio project in spanish). They also sold the Stinger DSLAM there.

And I do remember that the announcement of the merger of Alcatel-Lucent happened just after the auction of Riverstone assets (they filed for bankruptcy to ensure a faster sale of the company). Perhaps you are right to say Lucent purchase Riverstone for over USD400m as a backup plan should the merger failed. It sure is a huge sum of money to spend for backup plans.
digits 12/5/2012 | 3:05:38 PM
re: AlcaLu Touts IP Upgrades Well, at the time there was no guarantee that the merger would take place, and Riverstone's technology was becoming a vital part of Lucent's standalone triple play offer at major customers such as Telefonica.

Remember, also, there was something of a scrap over Riverstone -- Ericsson wanted it too.

Ericsson's Riverstone Hangover
MorningWd 12/5/2012 | 3:05:37 PM
re: AlcaLu Touts IP Upgrades Another possibility to consider is the talent of some of the employees at Riverstone. Besides the points mentioned, ALU could probably take these "new" employees and make them productive quite rapidly on the continued development of the former TiMetra equipment.
metroman 12/5/2012 | 3:05:36 PM
re: AlcaLu Touts IP Upgrades
If LU had pulled out following the auction they would have had to pay fees to Ericsson. These fees coupled with the value that E/// would have seen in having the RSTN technology was probably seen as a significant risk to the combined ALaLU. In one swoop you take out a competitor that could have been dangerous in the hands of Ericsson, you save the damages you would have to pay out at that stage and you get the most talented VPLS team in the industry. Couple that with the value of the Telefonica implementation (in terms of revenue and reference) the deal was probably seen as net-zero. A low risk spend to prevent another significant competitor getting these assets.

rodolg 12/5/2012 | 3:05:16 PM
re: AlcaLu Touts IP Upgrades Currently we are seeing that the ip network is evolving, carriers are demanding that the ip network should be more service aware and it seems that such awareness demands intelligence or at least new technologies not common in IP equipments .

Alcalu is not the only one of thinking to put more intelligence or new functions inside IP equipment such as Edge Routers, we have seen Huawei with its God Box called ME60 which is an intelligent Edge Device that integrates SBC, DPI, Firewall, BRAS and Routing functions in one box. And then we have Redback with its new equipment its new smartedge 1200 . .

Now the point is if this products will be succesfull.... to be honest when i saw for the first time the news of Huawei ME60 i thought it was going to be difficult the acceptance of this type of product, but it looks like it is the trend because now more manufactures of IP equipment are looking forward to do this.

I believe this type of solutions will change very much our current conception of the ip network.

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