Alcatel-Lucent's big overhaul not so big

To that end (and also to shrink costs), Verwaayen pledged to consolidate research and development centers and to focus harder on applying common research to a broader scope of products. “Don’t build [an innovation] for a specific application, build it to be reused over and over again,” he said. “In R&D, it’s not just how smart you are. In many cases in R&D, it’s how good you are at reaching out to others.”

Going forward, Alcatel-Lucent will focus its products on three carrier spending priorities: spending needed in order to meet regulatory obligations, that needed to grow carrier revenue and that guaranteed to cut carrier costs. Whatever swings occur in the macroeconomy, Verwaayen said, they shouldn’t interfere with those three imperatives.

Verwaayen described 2009 as a year of transformation at the company, the benefits of which will be seen in 2010 and beyond. Next year, the vendor expects the market to contract 8% to 12%, roughly consistent with predictions made recently by UBS analysts.

Where the CEO expressed the most ambition or sweeping change, details were sparse. For example, he said Alcatel-Lucent would focus on creating for carriers a “flat, cheap” network “with flat IP on top” that is nonetheless “world-class,” “a better network” with “guarantees” that give users and applications developers incentive to use it creatively and prolifically. He also showed a concern for helping carriers maintain the best role in a world of over-the-top Internet applications. And in recognition of the often fine line between telecom and IT, he stressed the importance of partnering with IT companies rather than trying to be one.

“We need to go to open interface,” he said. “We need to allow the rest of the world to leverage their capabilities on ours. This industry for a long time has been about proprietary systems and almost closed mindsets -- this company for sure. So [this is a] big change.”

Perhaps the most dramatic technological changes, Verwaayen seemed to imply, will come from the company’s research arm, Bell Labs. “I asked Jeong Kim at Bell Labs to be as disruptive as he can be,” Verwaayen said. “I don’t want voices in concert. I want disruption. Because I want a disruption as close as possible to what we do, so we get an open mind.”