Lucent, Alcatel Take on the Enterprise

Networking gear vendors bank on IBM Global Services deal, outsourcing program, respectively

As carrier sales dry up and enterprise spending shrivels, struggling networking gear vendors such as Lucent Technologies Inc. and Alcatel S.A. are looking to new—or, in some cases, old—customers to help weather the economic downturn.

But while the moves make clear what the vendors said they hope to get from new marketing programs and partnerships—namely, a boost to flaccid sales—the benefit to users is much less evident.

After shedding its direct interest in the enterprise market by spinning off Avaya Inc. just one year ago, Lucent last week said it is once again looking for ways to reach those same corporate users. A marketing agreement forged with IBM Global Services could help open a new avenue to enterprises, officials said.

Lucents reappearance at the enterprise doorstep comes at a time when most service providers and carriers are cutting spending on network infrastructure. (Last week, the Murray Hill, N.J., manufacturers financial woes grew as Standard & Poors Corp. downgraded its debt rating to junk status.) IBM Global Services will bring Lucents data networking, optical and wireless products to corporate users with its e-business, e-business infrastructure and business management offerings.

For Lucent, the value of a more direct channel to the corporate networks—especially a channel with an expansive global presence—is obvious. "IBM Global Services is one of the best-equipped sales forces in the world," said Dick Muldoon, a Lucent spokesman. "This gives enterprise customers access to Lucent networking systems gear.

"Complex networking gear usually isnt sold [a la carte]," Muldoon added. "If youre thinking about building an IP VPN [virtual private network], for example, youre looking for consulting expertise that would help you build it."

"The fact that IBM is going to include this gear in its portfolio, I honestly dont think means anything terrible or anything wonderful for enterprise customers," said Robert Rosenberg, president of The Insight Research Corp., in Parsippany, N.J. "But as a customer, Id be very heartened that the contract Im writing is one with IBM." Both Lucent and Avaya are clients of Insight.

The deal with IBM also puts Lucent in the awkward position of competing with Avaya, of Basking Ridge, N.J., its former enterprise division.

"It does sound initially that it is sort of in our space," Robyn Roberts, an Avaya spokeswoman, said of the IBM-Lucent agreement. "On the surface, it certainly sounds like some of the things we do."

IBM Global Services officials in Armonk, N.Y., declined to comment.

Meanwhile, Lucents recently scuttled merger partner, Alcatel, is also directing attention on enterprises and service providers as carrier sales slip. Last week, the Paris-based manufacturer launched a Borderless Enterprise Market program to improve connectivity with customers, partners, employees and suppliers. With the deployment of open IP networks, enterprises and service providers can bring their networks together, creating new kinds of outsourcing relationships, Alcatel officials said.