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Optical/IP

Springtide Ebbing Away?

Lucent Technologies Inc.'s (NYSE: LU) Springtide services router -- now being used as a wireless router -- could be on the chopping block in the next round of corporate bloodletting, according to analysts who follow the company.

"I think that is actually one of the areas they will cut," says Hasan Iman, telecom equipment analyst at Thomas Weisel Partners. "Lucent has never been really big on data networking."

"Springtide is definitely high on my list of candidates to cut," agrees Lehman Brothers analyst Stephen Levy. "Lucent wrote off most of the goodwill related to Springtide last quarter."

"The next level of cuts [at Lucent] aren't going to be broad based," explains Iman. "They're going to have to start cutting divisions."

This is because Lucent, along with other vendors such as Ericsson AB (Nasdaq: ERICY) and Nortel Networks Corp. (NYSE/Toronto: NT), need to slash cash burn rate, and, as Iman sees it, only chopping divisions will, er, cut it.

A Lucent spokesman told Unstrung that the company does not comment on rumor and speculation (the old story…). However, he did say that the company is evaluating the Springtide product line. "We'll let you know," he says.

So that's encouraging…

However, the wireless market is still extremely important to Lucent, and the ebbing of Springtide could leave the firm with a big partner-shaped hole in its product line. Cisco Systems Inc.'s (Nasdaq: CSCO) 6500 and 7200 wireless routers (see Cisco's Wireless Wait) might be a natural fit for that hole, suggests Iman.

"I think a logical fit for them would be Cisco," says Iman. "Because some of the other major players have already allied with Juniper."

Indeed, It was Ericsson's move to develop the J20 wireless router with Juniper Networks Inc. (Nasdaq: JNPR) that helped to break the taboo that operators should source all of their wireless network equipment from one supplier.

"There are alternatives that Lucent could just integrate from third parties," agrees Levy.

Indeed there are. As well as IP networking players like Cisco and Juniper, there are a slew of startups out there that would be happy to have Lucent's business if it does decide to can the Springtide line (see Having a Flutter on the GGSNs).

If Lucent does drop Springtide, that will mean the failure of another of its major acquisitions of the last few years. Lucent bought Springtide -- the company -- in 2000 for $1.3 billion.

For those of you at the back that haven't been paying attention, wireless routers are the kit that help to enable all fancy-pants wireless data services promised with the coming of next-generation networks. Also known as GPRS Gateway Support Nodes (GGSNs) and Packet Data Serving Nodes (PDSN), they are the primary interface between a carrier’s radio and packet core networks. In their next-gen guises, these wireless routers comprise a new class of equipment that adds sophisticated service creation, billing, and IP traffic management capabilities to this strategic point in the network (see What's the Wireless Router Market Worth? for more details).

— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.com
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joset01 12/4/2012 | 9:35:20 PM
re: Springtide Ebbing Away? BTW, CW, when are Cisco actually going to drop some cash and buy Tahoe -- or maybe Starent -- after all they would surely be a bargain with the market like it is.

Or is Cisco happy that the 6500/7200 caters to all the operators' needs?

[email protected]
joset01 12/4/2012 | 9:35:20 PM
re: Springtide Ebbing Away? no, thank you all, keep the (doubtless informed) rumor and speculation coming and I'll keep checking it out. :-)

[email protected]
deepciscothroat 12/4/2012 | 9:35:20 PM
re: Springtide Ebbing Away? As I mentioned in an earlier post, Lucent is definitely exiting here. Clearly, they have a much stronger play in CDMA and virtually nothing happening in GSM (what happened to all the Lucent GSM salesman? Where are they now?)

Find out which data players are stronger in CDMA (Cisco, Starent, Tahoe) and the puzzle does not look so hard, does it?

Good catch Danno

cw
wonderfull 12/4/2012 | 9:35:19 PM
re: Springtide Ebbing Away? Has Lucent deployed any on its SpringTide PDSNs?
Both Verizon and Sprint use CommWorks.

On Tahoe..is the PDSN ready for Alpha at least?
Guglielmo 12/4/2012 | 9:35:18 PM
re: Springtide Ebbing Away? The rumor about Cisco buying Tahoe keeps circulating, but seems unlikely, at least for now, given Tahoe has no paying customers.
deepciscothroat 12/4/2012 | 9:35:16 PM
re: Springtide Ebbing Away? None that we have seen

We hear yes on Tahoe - it's in trials right now
deepciscothroat 12/4/2012 | 9:35:16 PM
re: Springtide Ebbing Away? Don't be so sure
noitall 12/4/2012 | 9:35:14 PM
re: Springtide Ebbing Away? Ciscowireless:

You are right on Tahoe. Further along than you realize.

You'll miss out on this company. Who knows, maybe Megisto will still be available. Good luck.
deepciscothroat 12/4/2012 | 9:35:13 PM
re: Springtide Ebbing Away? Too bad. We will beat them on our own
noitall 12/4/2012 | 9:35:12 PM
re: Springtide Ebbing Away? Right. Like I said, good luck. You guys are clueless as always. JNPR, NOK, ALA, ERICY: none of them are sitting on their hands. They're all getting ready to make moves in this space.

My prediction: Watercove goes to Junisphere, Megisto goes to ERICY, Tahoe goes to ALA, Seimens or NOK, whoever's got the biggest checkbook and the biggest plans. You get embarrassed yet again and find yourself with no product and nothing new to show your customers. Your customers, fed up with broken promises, buy from the guys they know and love (see above).

I'm buying a Cat 65k with my startup shares and using it as a coffee table. Maybe you can sign it for me.

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