Face it, LU already has ASND's product set. They just can't match ASND's quality
and that is something they cannot buy.
Stimpson,
I disagree with you. LU has a core ATM switch but it is not multiservice. They do not have a multiservice ATM/FR/IP/VoIP/VoATM switch in the same class as the CBX500 and BSTX9000. They do not have a stable and proven IP switch like the GRF which has been in production for 2-3 years. They do not have any telecom customers for their data products (Yurie & Livingston products). Most importantly of all, they do not have expertise in IP nor a credible portfolio of IP data products. Trying to compete against Cisco without IP expertise is like going on an elephant hunt with a butterfly net.
Lucent must be equipped for the coming war, and as of now they are not equipped. Sure, they could try to grow their own expertise and products. But if they know what's good for them, then they'll realize they don't have the time to do that. IMO, the future of the networking market will be determined in two years. If they don't have credible data products within that time frame that can respectably stand up against Cisco, then they will lose.
Cisco owns the enterprise market today, and they will keep it for a LONG time. I work for a large corporation, and it's inconceivable that we could ever break away from Cisco. Now comes round two--the next battleground is the telecom market, and whoever wins it will keep it for a LONG time, until the next paradigm shift. Lucent/AT&T owned it for the past 40 years, but now comes the new data era. The winner receives the market share and profits, and the losers inherit the niche product segments.
I believe Lucent realizes that too much is at stake, and they can't afford to gamble with their future. Ascend is the only company still standing which has successfully stood against the Cisco onslaught, and even beaten them in a few key markets. They need the experience, knowledge, and talent that Ascend (Cascade) has successfully put together.
Now, does that mean they will dismantle Yurie and Livingston after buying Ascend? No, I don't think so. Rather, I believe Lucent will foster a competition among its divisons, and then slowly retire the weaker products while integrating the best features of the stronger products. This is not unheard of--it happens all the time at larger corporations like IBM and HWP.
Now as far as Ascend, can they stand alone? Well yes, probably, but as a standalone company they will constantly be in a defensive posture, always focused on guarding and maintaining their lead in the ATM/Telecom market. To expand and attack Cisco would be to risk losing that focus. If Ascend wants to compete head-on with Cisco, they would need not two, but ten or so acquisitions, and with every acquisition comes the risk that they will lose focus and become distracted. Remember Bay Networks.
Just a few thoughts I had...
bucky89 |
