Innovate the Future

Original Web Article: Alcatel-Lucent Acquires Velocix for Multi-Source Content Delivery Network

Review Summary: 
It appears that Alcatel-Lucent (EPA:ALU) might be getting their act together. Acquisitions, partnerships and outsourcing improving future outlook.
Review/Analysis:  
When you combine two behemoths like Alcatel and Lucent together, you can expect major integration issues including product differentiation, market overlaps, redundant teams and more. Alcatel-Lucent exhibited every possible problem inherent in such a huge merger and many of us wondered if they would ever recover.
But, eventually, the right leader starts to pound out the problems. Ben Verwaayen appears to be that leader. He has slashed expenses and continues to optimize the corporate structure through deals like the outsourcing agreement with HP (NYSE:HPQ) that will allow Alcatel-Lucent to focus on what it is good at: communications. The HP agreement also sets Alcatel-Lucent up to be a major player and to benefit from the changes brought on by cloud computing, virtualization, de-duplication and the shift to netbooks. HP is making key strategic moves to compete aggressively against Cisco (NASDAQ:CSCO) and Juniper (NASDAQ:JNPR). Alcatel-Lucent will undoubtedly benefit from those moves.
In addition, Alcatel-Lucent is deepening its own attack within the services space and improving its competitive position against Cisco and Juniper in the consumer, SMB, enterprise and ISP spaces. The Velocix acquisition starts to round out the picture by giving Alcatel-Lucent a content delivery network play for ISPs and carriers. Alcatel-Lucent is finally gaining credible competitive positioning beyond their legacy backbone network space.
Other acquisitions over the last two years that are critical indicators of the direction that Alcatel-Lucent is heading: Tropic Networks (a metro WDM network supplier), NetDevices (enterprise services gateways), Thompson Advisory Group (telecommunications consulting), Tamblin (IPTV solutions) and Motive (service management software for broadband and mobile data services).
Alcatel-Lucent is doing the right things to break out of the traditional network equipment vendor mold and go after recurring services revenues. Look for Alcatel-Lucent to provide the infrastructure for services delivery for many carriers like Verizon Business (NYSE:VZ).
 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com