Newbridge keys in on three markets

Newbridge Networks has announced a corporate restructuring that defines three distinct business segments: Internet protocol and internetworking solutions, switching and access.

"We eliminated the big, functional development organization and replaced it with three product groups. [Each] is responsible for developing those businesses that we intend to launch," said President and Chief Operating Officer Alan Lutz. Lutz appointed an executive vice president to head each group.

Each unit is responsible for its "plan of record," Lutz said. That encompasses individual R&D, product marketing, product management and affiliate and partner relationships. Profit and loss remains a centralized function, however.

Lutz hopes to expand Newbridge's worldwide presence. Sales and service operations will continue to be divided into three regions-North/South America, Europe/ Mideast/Africa and Asia-Pacific.

"They've taken a business unit approach to managing their business," said Tim Smith, principal analyst with Dataquest. "It allows you to focus more carefully and manage your own priorities, and bring specific functions and features to the marketplace."

Newbridge's challenge will be to maintain its strong integrated network management system across the three units, said Smith.

"Some would perhaps argue that Newbridge is trying to establish areas of business that could be spun off or acquired by other companies," he added.

But retaining all three units could be critical to achieving Lutz's goal of increasing profits to $5 billion by 2002. Lutz expects the access group, a new area, to reach the $1 billion mark in three years.

"For a company like Newbridge to compete against Cisco, Lucent, Alcatel and Nortel, we had to identify market segments, drive for a significant increase in marketing and execute with more precision and more profitability than those large companies," said Lutz.