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Lucent Stops the 'Tide

Lucent Technologies Inc. (NYSE: LU) confirmed today that it's canceled its SpringTide Service Switch series. "We're discontinuing feature development and ceasing all active marketing," spokesman Steve Loudermilk told us today.

The news is no surprise. Industry observers had long expected to hear the last of the SpringTide IP service switch, particularly now that the company's aggressively combing its product line with an eye to saleable or ditchable items (see Springtide Ebbing Away? and Lucent Clarifies Product Strategy). Indeed, last week's news that Lucent's stopping support of its TMX 880 multiservice switch served to fuel speculation that the end of the line was in sight for SpringTide (see Lucent Chops TMX 880).

SpringTide was acquired by Lucent for $1.3 billion in 2000, but its wares seemed to founder, and Lucent's been peddling the switch as a wireless router for several months.

It's not clear whether the cancellation will result in layoffs. "We're not commenting on layoffs at this time," the spokesman says. But at least one other source says the news could affect about 150 employees in Lucent's InterNetworking division in Westford, Mass., which was hit by a layoff of about 180 in the wake of the TMX news.

Lucent may be hedging its bets, since it seems the SpringTide technology may be cycled into other products. Loudermilk says Lucent will continue to develop its multiservice line of products using what it learned from SpringTide.

It's unknown just how many engineers from SpringTide might be needed to do that.

At least one analyst thinks Lucent's move is regrettable. "Lucent could be cutting its nose to spite its face," says Ron Westfall, principal analyst at Current Analysis. Broadband aggregation and IP service switching continue to be important market areas, he notes. If Lucent had hung in there, it might have seen a better payoff from the SpringTide series in 2003. Now it's got no equivalent product to meet that need.

Westfall maintains that one reason SpringTide failed to spark sufficient customer interest to keep it going was that Lucent neglected to add some key features to help keep abreast of competitors such as Nortel Networks Corp. (NYSE/Toronto: NT). "Lucent was missing CPE equipment and never fully resolved SpringTide's management software issues," Westfall says. In contrast, Nortel's VPN gear, including its Shasta line, comes with CPE, which helps corporate customers overcome a fear of relying totally on the telecom network for secure links. Further, he notes, one management system is capable of handling Shasta and Nortel's other VPN-oriented products.

— Mary Jander, Senior Editor, Light Reading
www.lightreading.com
Guglielmo 12/4/2012 | 9:23:39 PM
re: Lucent Stops the 'Tide As Lucent cancels the Springtide PDSN/GGSN, what will they offer operators instead? Will they revert to reference selling 3Com? Will they acquire another start-up company?

Unstrung, any response from Lucent on this question?
BT76 12/4/2012 | 9:23:31 PM
re: Lucent Stops the 'Tide Lucent's got a next gen GGSN/PDSN RFP outstanding (started mainly for UMTS). I think their best case would be to partner with 1 vendor for both. Springtide's demise is putting more pressure on them to choose (but DO's still at least 2 years out). Do they have any money for an acquision? I would think a partnership at least at first as this equipment isn't a cash generator in itself (if so, why kill Springtide) but a requirement to offer the end to end system.
joset01 12/4/2012 | 9:23:29 PM
re: Lucent Stops the 'Tide Checking this out as we speak, Lucent people are being fairly tight-lipped as you might imagine

DJ Unstrung
futureisbright 12/4/2012 | 9:22:23 PM
re: Lucent Stops the 'Tide Lucent is out of the business.

It is not actively pushing any more GSM, no big news.

It has no traction for its UMTS.

Supposing that LU want to conclude an agreement with someone (Watercove, Proquent, Tahoe, Megisto, or even Tesaria whom they know well), why would that someone waste precious resources dealing with LU??

They are unlikely to generate any revenues, and the press release would be worthless, if not detrimental. The only favorable factor I can think of, is that the opportunity cost would be low
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