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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: jach who wrote (6610)	3/14/1999 9:52:00 AM
From: KYA27	Read Replies (1) \| Respond to of 21876

IBD interview with MCGinn c/o SI board IBD. Lucent Moving At Light Speed Into New Era Date: 3/15/99 Author: Michele Hostetler Lucent Technologies Inc. hopes to see the light this year. Fiber-optical light, that is. Fiber optics, now used mainly in long-distance networks, will make its way to corporate networks in the next few years, says Richard McGinn, chief executive of the largest seller of telecommunications gear. Fiber optics - glasslike wires that use light to send information hundreds of times faster than do copper phone wires - will play a key role in melding data and voice onto the same networks, McGinn says. Lucent is squaring off in this emerging converged-network market with longtime rival Northern Telecom Ltd. and data networking leader Cisco Systems Inc., among others. McGinn recently talked with Investor's Business Daily about how he sees communications networks evolving. IBD: What is your vision for networking? McGinn: There are truly fundamental, dramatic changes taking place today in the industry that we define as communications networking. We have a march of technology occurring in semiconductors, software, photonics and wireless that is disrupting conventional wisdom about networks. There are literally convulsions occurring in the markets these days. We are moving from a world where a lot of enterprises and service providers . . . selected parts or boxes and then . . . knit those things together to deliver the services they needed. These networks tended to be application- specific, like voice. The architecture we're heading toward is a network of networks that is multiservice, high-performance, very highly reliable and increasingly cost-effective. Prices are coming down, . . . and we can measure it in percentages - plural - every month, not unlike the curves we've seen in the past in the PC industry. We're seeing performance going up dramatically. In optical, as an example, it's even faster than Moore's Law (which says chip performance doubles every 18 months). IBD: How is optical technology changing networking? McGinn: That is literally an embryonic network. Photonics is where silicon technology was 15 years ago. It's really at the beginning stages, maybe the first inning of play. You're going to move from the tremendous carrying capacity of broadband optical in long-distance telephone networks . . . to metropolitan- area networks and then campus-area networks and ultimately at the local- area network. The beauty of this is that companies will wind up with dynamic bandwidth - individual wavelengths on fiber-optical systems. Ultimately, as you move to the enterprise (a company's local-area network) in three to five years, you'll see a substantial flattening of (traditional gear sales). You'll see less need for the hodgepodge of active electronics in these enterprise networks that today are characterized by hubs, routers and so on. This is really quite a major leap forward for the enterprise. Photonics (use of fiber optics) is transforming the way networks are deployed. It's evolving even as we speak. IBD: When will fiber optics become more widespread? McGinn: We are supplying carrier- grade optical networks to certain (corporate) campuses today. They tend to be superheavy users, not the normal kind of businesses. But I'd expect within 12 to 18 months you will see the firm implementation of metro- area optical networks going in (thanks to) new low-cost technology. And within two to three years, the market will begin to pick up substantially for campus and individual-building optical networks. That puts huge pressure on the status quo in the enterprise marketplace in terms of hubs and routers. IBD: The latest in fast gear for service providers and carriers is terabit routers, a step up from gigabit routers. Do you plan to buy any of the start-ups that are developing such routers? McGinn: We organically and through acquisition are going to serve all the requirements necessary to deliver these full networked offerings. I think we've demonstrated with quite a number of acquisitions and one pending that we are quite willing and able to both develop on our own and acquire companies. How's that for a non-answer? IBD: How do you see network traffic evolving? Voice now accounts for 80% of phone carriers' revenue, and data 20%. McGinn: I guess what I hear is voice traffic is growing somewhere between 3% and 5% a year, . . . and data traffic for the Internet is growing 50%, 80%, pick your favorite large number. I think it's safe to say . . . we'll reach a parity probably within five years in terms of the amount of traffic that's moving around man to machine and machine to machine vs. human to human. IBD: What's Lucent's strategy for moving from just voice to voice-data networks? McGinn: It's a piece-by-piece basis. There are those who would say one size fits all. Our (voice) customers are telling us they are going to make the move to either migrate from their existing network or have their existing networks progress or reside alongside a data network. New carriers coming in probably are going to go with a data network architecture to start with. You've got different business strategies . . . driving the direction that people take in data networks. We're addressing each of them. IBD: How are you positioning Lucent against Cisco and Nortel? McGinn: We consider them to be two very good competitors in the field, coming from two different perspectives. We have to position ourselves not vis-a-vis them, but according to what customers are telling us.

To: jach who wrote (6610)	3/14/1999 10:49:00 PM
From: Sure Thing	Respond to of 21876

jach, Everytime I try to purchase a few shares of CSCO I am unable to pull the trigger due to that nagging CSCO market cap that's equal to LU and NT combined. When CSCO's declining profit margins sink into the thick skulls of their shareholders it's gonna be painful. Especially with LU beating them in the carrier space (ASND) and NT nipping at their enterprise profits. When some of the analysts turn negative on CSCO by the end of 1999 it will get ugly. John Chambers has been warning of lower profit margins and this time he has good reason to be singing that song. - Sure Thing -

To: jach who wrote (6610)	3/14/1999 11:43:00 PM
From: Boplicity	Respond to of 21876

Microsoft, Intel to unveil telecom alliance - FT LONDON, March 15 (Reuters) - Microsoft <MSFT.O> and Intel <INTC.O> are expected to announce a joint attack on the fast-growing telecommunications equipment business on Monday, the Financial Times reported. The newspaper said in its Monday edition that the two companies will unveil an alliance with hardware producers Hewlett-Packard <HWP.N> and Northern Telecom Ltd. <NTL.TO>, also known as Nortel Networks. If successful, the alliance could open up a huge market for Microsoft's Windows NT operating system and Intel's Pentium microprocessor, the report said. The venture is seen as possibly advancing the introduction of corporate networks combining voice, data and video signals on the same infrastructure, the report said. The plan is for Canadian-based Nortel to build routers, switches and servers for corporate networks running Microsoft NT software and handling both data and voice communications. Nortel initiated the new four-way alliance, the article said. The move is seen as a departure from usual practice in the the telecoms equipment market where competitors such as Cisco Systems <CSCO.O> and Lucent Technologies <LU.N> produce both the hardware and software needed for their equipment. The venture could give Nortel the opportunity to get in on the ground floor of a growing market, even if it runs the risk of undermining its profitable voice telecoms business lines. Other telecoms equipment suppliers could eventually be brought into the alliance if it proves successful, and it is understood that the new range will be marketed by Hewlett-Packard under its brand name, the report said.