equipment vendors

Alcatel-Lucent ranks high in optical survey; Huawei and Nortel make surprising showings

Alcatel-Lucent may be the leader in the optical equipment market, according to a new Infonetics Research optical equipment survey, but its pricing is a bit much for the service provider purchasing decision-makers asked for their opinions.

Representing major market change, Huawei stood out in open-ended questions about leading optical equipment vendors in the Optical Equipment Vendor Ratings: Global Service Provider Survey. Andrew Schmitt, directing analyst for optical at Infonetics, was surprising because most of the carriers interviewed are based in North America and EMEA where Huawei has little presence, he said. Huawei kept packing on surprises, particularly by receiving the third-highest average rating for service and support, which Schmitt said is usually Huawei’s weakness.

Then in the ironic results category, Nortel came out as the top vendor in an open-ended question about 40G and 100G technology leaders – which will benefit Ciena or a vendor to be named later that wins Nortel’s optical equipment division.

The survey asked service providers which of eight optical equipment vendors they have installed and which ones they are evaluating for future purchases, which they consider the top optical equipment vendors, which they consider leaders in 40G and 100G technology, and their familiarity with and ratings of optical equipment vendors.

The usual suspects included in the survey included Alcatel-Lucent, Ciena, Cisco, Ericsson, Huawei, Nokia Siemens, Nortel and Tellabs. They were ranked on technology, product roadmap, security, management, price-to-performance ratio, pricing, financial stability, and service and support.

Other vendors recognized on the open-ended 40G and 100G technology list include ADVA, Infinera, Mintera, NEC and StrataLight/Opnext.

New AT&T vendor strategy launches massive procurement process change

AT&T is changing the traditional procurement process for network equipment and software solutions with its new Domain Supplier program, and as a result, some chosen vendors will be responsible for a lot more than their own products.

We’ve called this concept “procurement zones,” but no matter what the name, AT&T’s new procurement strategy will revolutionize how the company sources technology for its networks. AT&T’s goal is to make sure it has the best end-to-end technologies in place.

According to the company, each domain will have two suppliers that have been pre-qualified by AT&T. Those selected suppliers could work with AT&T on solutions for a set multi-year period, which puts other vendors at risk of losing business, unless they find their way into the domain vendor’s solution ecosystem as a partner.

pThe blog mill says traditional telecom networking and operations organizations haven’t been thrilled with the change because they want to choose the best technology for the job, not restrict the number of suppliers they can use. But AT&T CTO John Donovan (not a career Bell employee) is backing the idea.

AT&T hasn’t said how many domains it will have, although initial estimates were 14. The company has also said that some of the chosen have been notified, but that was the end of that discussion.

With a domain system, domain winners will have more skin in the game than just selling and delivering products. AT&T has it in mind for suppliers to be responsible for integration, testing and support for end-to-end solutions.

Some winner’s announcements have started rolling in. Ericsson said it has been chosen as one of AT&T’s two supplier vendors for wireline access, which includes technologies such as IP/DSLAM and FTTx. We’re waiting to see if some of the usual suspects come next: Alcatel-Lucent, Cisco, Microsoft, Ciena or Huawei.

In terms of the wireline access domain, Ericsson has already announced that Adtran will be its partner for remote DSLAM products. And so the supply chain reorganizes.

Alcatel-Lucent’s earnings: Moving to half-full

It’s much harder to see the glass as half-full when you’re used to half-empty — or completely empty. Enter Alcatel-Lucent’s 2008 year-end financial results and its $6.2 billion loss. So it may not sound like it at first, but there’s something in that glass, and CEO Ben Verwaayen, who took the top post in September 2008, is starting to hear the Perrier fizz.

Alcatel-Lucent stock went up after the Q4 ‘08 earnings report (released Feb. 4) -– which isn’t easy to do this year. The new chief sees positive signs in things like cash flow being at its highest level in two years, as he explained his view of the company in a BusinessWeek interview. The company plans to make good on promises made last December to reorganize and refocus its strategy, and that means less emphasis on traditional products (read telephone switching equipment).

Verwaayen is shifting the company’s focus to services and Internet-related technologies, while placing less emphasis on traditional products like telephone-switching equipment. The analyst community sees Alcatel-Lucent as doing what it promised.

As part of its new strategy, Alcatel-lucent isn’t trying to do everything itself. To address certain hardware maintenance and expense, Verwaayen said the company may outsource legacy equipment servicing to established vendors that could “co-partner” with Alcatel-Lucent.

And to gain some nimble startup advantages — which is like turning the Titanic for a company the size of Alcatel-Lucent — Verwaayen said the company has asked its Bell Labs research division and its carrier product group to keep an eye out for innovative startups and work with them.

In December, Verwaayen said Alcatel-Lucent would focus on four broad areas in 2009: IP, optical, fixed-line broadband and mobile broadband (particularly Long-Term Evolution, or LTE).

In terms of strategy and services, Tom Nolle’s commentary, Telecom operators need vendor help to justify new investment benefits, discusses how Alcatel-Lucent is one of the main vendors that could help service providers sort out their next-generation network architectures. But only if it can get out of its own way and move forward with the new strategy.