LUCENT PRODUCT CUTS REFLECT DE-EMPHASIS OF ATM, MPLS

A little more than one day after Lucent Technologies publicly outlined its future product strategy, the company made more adjustments to even out its job-cuts-to-products-supported ratio.

The vendor confirmed last week that it has discontinued development of its TMX 880 multiprotocol label switching (MPLS) core product, which has gained little traction in the market. “We notified employees [on Oct. 25] about the discontinuing of the product,” a Lucent spokesman said.

And although Lucent wouldn't confirm the number of employees let go, sources said it was about 180.

Lucent is also looking to sell much — if not all — of its ATM switching line and rely more on vendor partnerships, according to sources. That move may be indicative of the company's growing focus on services and declining dependence on hardware revenue.

Lucent continues to invest in MPLS and next-generation edge products, and will integrate MPLS and other TMX 880 features into its GX 550 multiservice switch, the spokesman said. Though it is shutting down its MPLS core product, others in the industry said the move is not a reflection of the market itself.

“It's clearly part of their restructuring,” said Steve Garrison, director of corporate marketing at Riverstone Networks. “We've seen no slowdown in the market.”

Last week, Riverstone inked a 12-city deal with Spain's Telefonica to deploy Riverstone's RS 38000 and RS 8600 metro routers. “The Lucent product just wasn't fully baked yet,” Garrison said.

Others agreed. “No one was looking at it or buying it, so they may as well dump it,” said Sam Greenholtz, senior analyst at CIR. “If times were good maybe they could keep it, but this box hasn't done anything for them.”

In addition to the TMX 880, Lucent also plans to discontinue either parts of or its entire Springtide IP box, sources said. Like the TMX 880, this product has seen little market traction.

IN THE KILL BOX

TMX 880: Lucent's MPLS core box that saw little market traction; was created to carry multiservice traffic over a single MPLS backbone.

SPRINGTIDE IP SERVICE, WIRELESS IP SERVICE SWITCH ROUTER: One or both of these could go. The wireless version supports next-gen data; the wireline version is designed to streamline network infrastructure.

ON THE TABLE: GX 550: Multiservice switch that supports ATM, IP/MPLS and Sonet CBX 500: Multiservice WAN switch deployed at the network core or edge. PACKETSTAR: Multiservice media gateway that pushes broadband from the core to the edge of the network.

“It's most likely the wireless efforts Lucent made with the Springtide box [that will go], but it could be all of it,” said Ron Westfall, principal analyst at Current Analysis.

Sale rumors also surround Lucent's ATM switching product line, according to a UBS Warburg report and other sources. The products mentioned include the vendor's GX 550 multiservice switch, its CBX 500 multiservice switch and its PacketStar multiservice media gateway. Lucent picked up much of that equipment through its $20 billion acquisition of Ascend.

“Lucent has always been shaky on ATM,” Greenholtz said. “They need to focus on DWDM and next-generation Sonet networking. Otherwise it will be the beginning of a fire sale — switching won't come back and save them.”

Cisco Systems apparently has been looking at the products, but the purchases would be inconsistent with Cisco's acquisition mantra.

“The rumor seems to have resiliency because Cisco can afford to make that type of move and it's probably coming with a bargain price,” Westfall said. “But their rule of thumb has always been to buy a gem here and a gem there and avoid the integration headaches.”

Lucent declined to comment, but a spokesman nodded to an increased interest in partnerships.

“We are looking to partner with other vendors to help us meet the needs of our service provider customers,” the spokesman said. “That could include sharing some technology assets and intellectual property.”