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paolo.franzoi
paolo.franzoi
12/5/2012 | 4:03:38 AM
re: Calix Goes to the Node

Alcatel is strong in BellSouth and AT&T.

BellSouth had their RFP and is now looking to be consumed by AT&T. AT&T is in love with Alcatel. What does Calix bring that would cause AT&T to open a spot for them? A coffee cup holder?

seven
stephencooke
stephencooke
12/5/2012 | 4:03:37 AM
re: Calix Goes to the Node
Seven,

An analyst recently told me that there are roughly 65M people in the US in population centers that number less than 10,000 who are served by tier 2 & 3 carriers.

Granted that to do a decent job on these sized accounts requires a large and geographically dispersed sales force (read: good channel selection, support and management) but that number was bigger than any RBOC until the latest merger announcement. ALA can't be everywhere at once, so the startup mantra goes...

Steve.
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:03:37 AM
re: Calix Goes to the Node

Stephen,

Yes, but Calix has already won the vast majority of the new business in that market. So, what is the point of winning business that you have already won?

seven
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:03:35 AM
re: Calix Goes to the Node

Stephen,

What you have stated is normal marketing theory, but is just not what is going on now. Alcatel is the prime contractor for the Lightspeed network and is choosing the 3rd party products that enter that network. Think Calix is on their list?

Did you see any RFPs for Lightspeed? No? Really. That is because there weren't any.

seven
stephencooke
stephencooke
12/5/2012 | 4:03:35 AM
re: Calix Goes to the Node
Seven,

Business won is a transient thing (otherwise stated as "complacency is deadly"). That is why account managers have jobs. To maintain the relationships and to show the customer that progress is continuing.

Carriers can be very fickle with their suppliers, particularly the bigger carriers. Calix has to show their existing customers that they are moving forward and hope that, at some point, their offering becomes attractive to bigger fish; whether the attraction is a cup holder or a better business case.

You have said that AT&T/SBC is "in love with" ALA. It may appear this way at some level but I would bet that they (AT&T) are continuously testing ALA's competitor's products if for no other reason than to obtain pricing leverage at the purchasing table. If one of those competitors came up with a better business case ALA may have to scramble to maintain that "love".

I heard a major account manager, who happened to be well situated with the carrier in question, telling an underling who was struggling to keep up with the workload of apparently useless information and support requests: "Yes they are a*****es, but they are OUR a*****es".

Steve.
chengjinzhu
chengjinzhu
12/5/2012 | 4:03:33 AM
re: Calix Goes to the Node
In my opinion this is not about Calix getting positioned to be a number two in an RBOC - that's a thankless job and a financial black hole.

This is about clearing the decks of any viable competitor in the NLECs and IOCs.

This product announcement is squarely aimed at Occam.

The OSI acquisition was designed to own the FTTP story in these same accounts.

Now if they execute the will keep these two markets to themselves and life will be OK. Of course, profits will remain elusive and the days of 60% gross margins in the AFC glory days are long gone.
stephencooke
stephencooke
12/5/2012 | 4:03:33 AM
re: Calix Goes to the Node
Seven,

Interesting information, thank you. I have never heard of a major carrier allowing a supplier to decide what equipment gets deployed in their network. Is TRI Labs now a wholly-owned subsidiary of ALA? I am quite familiar with things like "If you don't interoperate with vendor X we aren't interested" (and vendor X's inability, due to logistical issues, to show up and support interoperability with anyone else. This is one of the reasons why carrier labs exist in the first place) but I haven't heard of anything beyond that until now. I have also heard of supplier deployment and installation contracting but never third party equipment selection.

How could ALA certify that any third party's product could interoperate with AT&T's OSS, etc.? Interesting...

Steve.
MorningWd
MorningWd
12/5/2012 | 4:03:32 AM
re: Calix Goes to the Node
Perhpas LR can verify, but I believe that ALA is doing all of the OSS / BSS integration for AT&T at one of their facilities in Plano. I've also heard that they have the integration lab there where they do all of the end-to-end testing to which seven alluded.
RTL Rules
RTL Rules
12/5/2012 | 4:03:32 AM
re: Calix Goes to the Node
seven,

My (perhaps inaccurate) picture of ALA is that they have a complete access solution and they're selling it to SBC.

What third party vendors would ALA need?

I imagine they need middleware. Do they need hardware? (CPE?)

RTL
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:03:31 AM
re: Calix Goes to the Node

RTL,

I don't believe they need any 3rd party stuff outside of things like power, batteries, connectors, cable, and things like that. They are clearly working with other hardware vendors on the CPE (2wire) and transport side (Fujitsu).

As to winning all the Tier 2 and Tier 3 carrier business, they have the vast majority of it already. Now they have 3 platforms to support. We will have to see if they can turn this into a net margin profitable business.

seven
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