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Lucent: Down But Not Out
Frisky070802 writes "Forbes has an article about the "new" Lucent. It discusses how Lucent is trying to follow in the path of IBM by transforming itself from an equipment provider to a provider of services, even to companies using equipment from competitors. Patricia Russo, the CEO, claims that Lucent has turned the corner and proven it can survive. The article quotes a few statistics on just what has survived: for instance, revenues down from $28.9B in FY2000 to an expected $8.9B in FY2004, and headcount dropping from 157K to 32.5K over that time." Lucent has fascinated me, simply because they were so well setup, but then floundered for *years*, but have a great amount of interesting technology at their core.
Give away the equipment, earn on "Support and Services". Hasn't this worked well for all the Linux companies of the late 90s?
I worked for Lucent during the Fiorina years and I saw it decline from a great company to one that was brought down to its knees - sure, the dotcom bust was part of the reason but Fiorina's "dubious" business practices didn't help. Whatever anyone says, she was kicked off the Lucent board and how she ever got to HP is beyond my comprehension - well, one idea springs to mind but it involves a casting couch.
I hope Lucent pick themselves up again - the heavy investment in 3G technology did not help their recovery - as they have the Bell Labs heritage (along with Avaya) and a more rounded workforce than IBM, albeit much smaller.
IBM is very good with server technologies and web integration stuff but Lucent has the better telecoms and networks skills and is probably well placed to offer services in those areas.
As for HP the sooner they kick out Fiorina, the better - I wouldn't trust that woman to run a hotdog stall, let alone a global company.
Gentoo Linux - another day, another USE flag.
So... a company did really well during a boom, didn't expect the - let's go with at least a century of data - inevitable bust, and ended up in the fiscal doghouse. The bust is showing faint signs of turning into a boom, and a company lasted long enough to see the dawn. I hope I'm not abstracting a little too much for everyone's taste, but I'm just amazed at how this sort of 'news' borders on anything more than a madlib.
OTOH, it is Lucent. I am confused by the matching corporate-think cycle regarding slimming to 'core business' and 'diversification', which has had profitable units dropped because they weren't the "core business". I realize this comes with a nice immediate fiscal gain, but... so would selling the whole company, or firing all the employees.
Lucent, if I understood properly, was a victim of both this 'core business' nonsense along the need for capital by its parent business unit. I think of Lucent as an innovator, and it seemed set up for failure. So... yippee! Pat yourselves on the back, Lucent. I do find it mildly amusing that their future will be neither a 'core business' nor 'diversification', but rather, (minding) other people's business.
Now if you'd like to credit me the value of shares at the price I originally paid for them...
How good is Lucent at playing nice with the OSS community? Been so long since I saw some of their stuff out on the market. Could be one way to improve their image, like Apple and IBM improved their images a bit when they adopted free or *nix software.
If my answers frighten you, stop asking scary questions.
One of the big changes is what Jose Mejia has done to Lucent's supply chain. The company's Customer Delivery Organization concept has helped the company connect the back-end of manufacturing and supply to the front-end sales force. This has helped the win contracts and control costs.
I'm sure Lucent faces a tough battle given that wireline connections aren't growing, wireless is becoming a commodity, and optical still faces a glut of installed dark fiber. Still, I suspect that they will be able to reap their share of contracts and profit from whatever telecom equipment sales there are.
Two wrongs don't make a right, but three lefts do.
Bueller... Bueller... ???
What do Lucent primarily do? Make base stations or atlease the equiptment for for cell phones. I took a tour of the Whippany, NJ facility and they are also working on getting broadband in the car aswell as piping television through it. They got to about 30 fps, but seeing how there is no motion blur they need a lot more fps. However inlight of their innovation they need to find something that will give them a good chunk of change every month to continure to do innovations.
On another note, the guy I was with said the employees have a very trusting relationship with each other and that if they left their office they can come back and fine it still there instead of being stolen, however it turns out that Lucent has the highest car jacking rate in the entire town of Whippany(or it could be Hanover Twsp which Whippany is a part of)
I have a Lucent Cellpipe DSL modem and Apple Airport Base Station coupled together as my home wireless network router. They work together quite happily but... Airport Base Station just looks great, more like a piece of art than a wireless router. It also runs perfectly silent. Lucent Cellpipe, on the other hand, looks butt-ugly AND IT WORKS LOUD - it constantly hisses and buzzes (I even learned to guess the operating mode from the kind of noise it makes - there's a special kind of hissing when the box is connecting with the PPPoE server, a special kind of hissing when it's connected and everything is OK, a special kind of hissing when WAN goes out of synchro). Obviously, wireless network nodes do not need to look fine and they don't even need to work quiet but... both devices are also a sort of a sample of the general technical culture for both companies. And guess which company's products I'll tend to buy in the future...
Patricia Russo, the CEO, claims that Lucent has turned the corner and proven it can survive. The article quotes a few statistics on just what has survived: for instance, revenues down from $28.9B in FY2000 to an expected $8.9B in FY2004, and headcount dropping from 157K to 32.5K over that time.
Mass firings, revenues dropping to the point where you have to wonder if they even have a product, and an extatic CEO preaching their revival? Sounds like Lucent might still have some of that Bell Labs UNIX copyrights under their sleeve!
SCO employee? Check out the bounty
I don't believe people really know what Lucent does. I see one post about "Lucent should use OSS" and another post talking about their Lucent DSL modem.
Lucent had/has their hands in alot of pots. Yeah, they do make DSL modems, but that was just so they had something to offer up when service providers bought their Stinger DSL Concentrator.
Lucent to me was the manufacturer of hardcore ATM equipment as this really was their core business before the CBX500 became aged. Of course, this is just my experience from my job. Lucent is still so big that knowing all the divisions and sub-organizations within it is confusing at best. I'm sure the other organizations within Lucent had their own core business that was pretty successful.
In 2000, we worked with four lines of ATM switches. Today, we still work with 3 of the 4 and nothing really new has been introduced. So pretty much, everybody that needs to buy one has probably bought one already. That's the peril of a hardware company that hasn't introduced anything new or innovative in about 5-6 years.
The optical switches are pretty exciting (but I've never worked with it so I can't speak to the actual models) but I know they are expensive and are overkill for alot of applications so I don't believe they're flying off the shelf.
So what have we left but to become a services company which has been another auxillary department at Lucent for many years. Perhaps you recall Lucent's acquisition of INS in the late 90s. The difference nowadays is that the services arm of Lucent is probably financially more healthy than the hardware manufacturing arms of Lucent.
I just wasted your mod points! HA!
To see the glass half full for a moment, consider these numbers. The revenue per employee is up from $184K to $274K, about a 50% rise. Given the salaries and other indirect employment costs are a very large part of the overheads in a company the size of Lucent, and that Lucent lost many of those employees by selling off divisions rather than through lay-offs, this seems like a sign of fairly good management.
If intelligent life is too complex to evolve on its own, who designed God?
So now Lucent, like IBM has made the transition to a services co. Watch Cisco make this realization a few years late. Right now, Cisco is very much a box company that relies on a channel to implement its products, but as Cisco moves beyond now commodotized routing and switching into Advanced Technologies, particularly voice, that channel is proving itself to be mostly inneffectual (and Lucent has been buying up the botique Cisco partners that actually have skills). The big players in this channel are mostly large partners that are as nimble as elephants. Because of Cisco's channel focus, the layoffs stripped out most of the cisco employees that were skilled at implementing their advanced tech (and left behind multiple layers of do nothing managers), so now they don't have the ability to enable their channel.
Get a logo that people can take seriously for starters.
Being that I work in several different CO's, I'm fairly familiar with Lucent Equipment (from DDM2000 multiplexers up to the 5E) and Lucent, service provider. If they've changed concentrations, they've failed to show it in the area in which I work...they've recently stopped doing vendor work in the state and, a while back, stopped giving tech support except on their newest equipment like their DMX.
Wow, it seems like only yesterday they were up from 33K to 56K.
Having worked at an AT&T plant, which became Lucent the day after I left:
- When AT&T divested the Baby Bells (1984), the judge told them that they had to continue to manufacture EVERYTHING that was an "active" product - even the stuff they had not made in 10-20 years (everything listed in the spec book). The RBOCs then found out that they did not have to order new equipment, just fix the old stuff, really old stuff.
- We did not even know how much it was costing us to make - the judge said we had to do it. We're talking really old stuff.
- The new stuff our other plants shipped (cellular equipment) maybe did not work, maybe we knew it did not work, but they figured that by the time it was installed, we'd have a fix.
- Bell Labs was becoming a victim of competition - it's hard to invest in research when your struggling to get by on your cash.
- Lots of semiconductor fab competition and the newer plants had a cost and volume advantage. If you lose your grip on your segment of the market, it never comes back.
As Lucent was the equipment part of AT&T (AT&T Microelectronics), how exactly do they become a service business - when all of the services went to AT&T in the split?
Faith is the very antithesis of reason, injudiciousness a critical component of spiritual devotion. Jon Krakauer
What will happen to Plan 9? The commercial rights belong to Vita Nuova, but I think Lucent/Bell Labs retains the copyrights and such...
both devices are also a sort of a sample of the general technical culture for both companies. And guess which company's products I'll tend to buy in the future...
You do realize that Lucent makes (or made) the electronic guts for the Airport, right? Granted, Lucent may not be winning any awards for industrial design, but in a very real way these products were both made by Lucent. Not such an easy decision is it?
It will be a very, very sad day when Bell labs moves away from technology research and starts researching customer service tools and metrics. Or stops researching all together.
Bells labs is also the birth place of a lot of digital audio technology. Max Matthews was there -- the father of electronic music. It's where speech synthesis was invented. Remember HAL singing "A Bicycle Built for Two?" They actually synth'ed a computer doing that back in the 60's.
It's the beginning of the end for one one the cultural icons of technology.
Although, if they're in the service industry now, maybe they'll eventually become a geek theme park. Imagine riding the digital rollercoaster, where you're either at the top or bottom, but never anywhere in between ..
Lucent (and its relatives) have been in decline for decades. It was never the technology, but the ability to turn the technology into viable products. I worked there for years. Every good idea in the past 25 years had been developed by someone there and abandoned, leaving the market to Sun, Cisco and a host of other agressive startups. A lot of great talent was wasted there.
Nortel Networks and John Roth.
It was under John Roth's leadership that Nortel made a number of strategic decisions that beat up Lucent badly in a number of its major markets.
Of course, Nortel isn't doing too well either, but it never was as close to bankruptcy as Lucent.
Want some real fun? Try being a newbie on the last surviving UNIX helpdesk for a huge corporation while its cutting 2/3+ of its staff and equipment. Suddenly you inherit responsibility for thousands of workstations and servers you've never touched in all their years, you have no idea how they've been administered, just that they're now your responsibility now (responsibility but not control - you're not allowed to change anything).
Now just for added fun, have someone start going through the server room yanking out anything that "doesn't look important" ( licence servers, NFS servers, NIS servers ... ). Oh - and meanwhile burnt-out management is trying to decide which of your burnt-out coworkers and burnt-out callers to boot off the island next.
(I wonder, if/when it's my turn for my torch to finally burn out or be snuffed out, if I'll feel that it was all better than unemployment?)
It's a shell now, like PARC. Sad.
I for one will be glad the day that they go under and the mgmt gets what they so richly deserve. to be stripped naked, made to line up and let former employees that got fk'd in the ass by them point and take pictures. Camp xray could use a few more 'guests' for a nice long-term stay. I for one with like to see Pat Russo learn the meaning of the term 'violated' from the other inmates.
1986: Receive MSEE and join AT&T Bell Labs.
1990: Receive PhD and become an "official" researcher at AT&T BL.
1994: Moved from AT&T to LU bell labs research.
1996: All my work becomes advanced development.
1998: All my work becomes development.
1999: Start my own company.
2000: Make 1 billion dollars more than lucent (LU -1 billion for the year)
2002: Lucent becomes my customer.
2004: Lucent becomes my largest customer.
2005: ???
but I'd hit it. Twice.
Fascism trolls keeping me up every night. When I starts a preachin', he HITS ME WITH HIS REICH!
The s.d. area I worked in was the most dehumanizing, torturous environment you could ever hope to work in. Everyone who worked there will probably need some sort of therapy, pink-slipped or not.
The old Bell Labs is nothing but a shadow of its former great self. The progressive, research driven department is the last thing about Lucent that makes it unique at all.
This company is fascinating only in the sense of "how low can they possibly go?" Its like watching a car crash repeatedly.
Mod my jaded ass down!
They've fired most of the people that work for a living. There's way too much management left.
Check this article about our execs salaries and performance relative to those of companies like Cisco.
It will never come back without swapping out all of the upper management and that will never happen.
Most of what we know as digital communications had roots that trace back to Bell Labs - either people-wise or technology.
iamhungryandihavenopointtomake.
When AT&T decided to split up, they did a capabilities survey of their employees. The top rated third would stay with AT&T, the middle rated third would go to Lucent, and the bottom rated third would go to NCR.
However, this was not told to those making the survey. Politics being what it was at AT&T, the politicians and powerful managers got the highest rating and stayed with AT&T, the technicians went to Lucent, and NCR got the leftovers. (There is an interesting sociology thesis somewhere in there on how sucessful the companies were afterwards.)
What remains of Lucent is suffering from the lack of depth of good management talent. Their warehouses, for example, are legendary for their disorganization. I know one contractor that turned down a lucrative contract (during the worst of the recession!) to modernize them because he thought it was hopeless.
However, Lucent still has tons of good technology squirreled away. The problem is, they can't productize any of it, because that would require focused management, a difficult task in the best of times, and an impossible one while in free fall.
Lucent has stabilized for the moment. What Lucent needs to do is hire a few managers to do what, say, General "Hap" Arnold did with Boeing. Pick a promising potential product and do whatever it takes to get a professional quality product out the door, with the full, unconditional backing of management. I can think of several from when I was there, any one of which whose sales could sustain the company on it's own.
This would work even for Lucent's services orientation. For example, Lucent could combine their telecom and IT expertise to specialize in creating fully virtual software development centers and multimedia contact centers. This would provide much the same cost savings as foreign outsourcing, with far less disruption. It would probably be popular with both US companies and the US government.
Lucent's future is far from hopeless. It's downfall, if it occurs, will be the failure of imagination and will.