Lucent hones Net strategy with Ascend
By Ben Heskett
Staff Writer, CNET News.com
June 28, 1999, 10:50 a.m. PT
update SAN FRANCISCO--Telcommunications equipment maker Lucent Technologies
today unveiled its new push for Internet networking technology following its
completed merger with Ascend Communications.
In the past, Lucent's strength was in producing back-end equipment for
seamless voice networks. But with the growth of Net traffic, the company is
looking to be the leader for technology that can work with the new networks
run by Internet service providers and communications companies.
"Now, more than ever, Lucent is positioned to be a clear leader in
communications networking," said Lucent chief executive Rich McGinn at a
press conference in San Francisco.
The marriage of phone and data networks is one of the biggest trends in the
networking industry. The growth of the Internet has forced communications
companies to alter their network build-out plans to include a larger amount
of Internet-based equipment able to carry data "packets" at a high speed.
A scheduled event today in San Francisco showcased Lucent's plans for
Ascend, as well as for Nexabit Networks, the high-end equipment start-up
Lucent purchased last Friday for $900 million.
The Ascend acquisition closed last week, following a shareholder vote.
Integrating Ascend's technology will allow Lucent to better compete with the
likes of Cisco Systems and Nortel Networks, among others, in its bid for a
piece of the Internet equipment pie.
With Ascend, Lucent expands its Silicon Valley empire that now includes over
4,000 employees across 10 cities in the area. "It is really becoming a
bi-coastal company," said McGinn. "We are following the talent."
McGinn characterized published reports of a recent 10 percent staff cut
through layoffs and departures at Ascend as "rubbish" and "not true."
McGinn said the company could continue to grow at 3 to 5 percent above the
average for the networking industry--a result, he claimed, of the firm's
focus on high-growth businesses.
"We see the opportunities continuing to grow," he noted.
Lucent will organize its newly acquired technology into five groups. The
firm plans to focus on the Internet using voice-on-data networks, as well as
offer virtual private networking (VPN) technology. Lucent will also
introduce advanced uses of Internet protocol (IP)-based software and other
associated services, according to a Lucent spokeswoman.
For the high-end market, Lucent now has several weapons, including its own
IP and asynchronous transfer mode (ATM)-based network switches, as well as
those of Ascend, and the speedy routing technology it acquired from Nexabit.
Nexabit's switching technology is currently in tests.
Ascend is now part of Lucent's newly crafted InterNetworking systems unit.
Mory Ejabat, former chief executive of Ascend, plans to stay on with Lucent
as a consultant for an "undetermined" period. In previous interviews, the
executive said he would stay through the transition. Ejabat has already
taken board positions with a handful of other companies in the networking
and communications industry.
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