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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.
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...
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.
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?
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 ..
On the other side of Telecom Island, Team MCI/Worldcom also worked under this odious rule. Programmers were told to fix a 20-year-old codebase, but they were forbidden to change anything.
For instance, new functionality had to be implemented without new functions! Adding a new function was too much of a change. So we had 5000-line functions with all kinds of junk in them.
Data abstraction was also frowned upon, so those 5000-line functions took a pointer to the global data structure as their argument. If two functions needed to do the same thing to the global data, the code was duplicated in the two functions: adding a third function which only did that specific action to that specific member of the global data, which would be called by the two extant functions, was an impossibility.
Source code control was performed by a(n alleged) human who distributed and collected paper reservation tickets. He wasn't totally useless, however: he drank lots of coffee. Other than that, he was a waste of a cubicle.
Add to that aged numbskulls just getting around to learning C++, and freshly minted CS grads who as usual don't know anything (what the hell are schools doing these days?!), and criminal managers ---
[If there aren't at least a thousand of those people in jail after the DoJ is finished with MCI, the DoJ will have failed. Just getting the top two or three people will be enough to fool investors and other imbeciles, but the rot is much more pervasive.] ---
and you have an industrial-scale Charlie Foxtrot situation.
And if there are any fundamentalist ARI types out there, be thankful for antitrust regulation which kept MCI/Worldcom from buying Sprint. Antitrust is the only reason MCI/Worldcom's criminal activity was brought to a screeching halt. As a Mahayana Objectivist, I think antitrust should be applied to other criminals like the music and software cartels. Under capitalism, having control of a market is a sure sign of criminal activity.