No Jitter is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

A-L-Who?

It's time to meet Alcatel-Lucent Enterprise (ALU-E) again. I had the opportunity to get a view of this company and it isn't at all what I expected. Even with ALU-E now divested of Genesys, there's plenty more UC stuff tucked underneath. The Enterprise division is not well known in North America, but does compete globally, ALU just closed 2Q2012 with revenues of 3.5 billion euros.

That same quarterly report, which represented 10.6 percent revenue growth over 1Q2012, was nevertheless down more than 7 percent from 2Q2011 revenues. Moreover, the company announced a loss of 254 million euros for the most recent quarter, along with new plans to lay off 6.6 percent of ALU's workforce by the end of 2013. CEO Ben Verwaayen said the layoffs will impact "all parts" of the company except Research and Development. He also stated that the company will exit underperforming markets. He did not elaborate which markets or products were under consideration, and no details were available on the potential impact to the ALU-E division.

However, despite that difficult quarter, hidden behind these headlines is a story about a UC company going through a major transition.

Genesys Spinoff
In the Spring of 2011, rumors broke that ALU intended to divest its enterprise division. Just over a year ago, ALU announced an agreement to sell its illustrious Genesys product line to private equity firm Permira and Technology Crossover Ventures for about $1.5 billion. That left the Enterprise unit without its crown jewel. So, allow me to introduce to you, ALU-E sans Genesys.

The Enterprise division has two primary areas of focus--networking gear (including switches, routers, WLAN gear) and Communications (including telephony and unified communications). The UC components are surprisingly comprehensive (though a bit weak in contact center with the Genesys sale). The portfolio spans several business models including premises based CPE, software, and soon a cloud model. Its solution portfolio extends from the smallest SMBs to the largest enterprises, and its UC portfolio nicely covers mobility and video.

This has also been a year for personnel transition. Last January, Michel Emelianoff was named as the division's leader. Emelianoff had been the General Manager of ALU's data and security solutions business. His first task was to execute the separation of Genesys, which involved extracting shared source-code and other key technologies. He also had to backfill several executive slots of personnel who went to Genesys, particularly in marketing.

The separation of the divisions is largely complete and according to Emeilianoff, accomplished with good results. The two firms will share some interconnected technologies for some time. The new code created the opportunity for software updates and rebranding.

Along those lines, ALU-E recently announced new versions of its OpenTouch suite of UC products. The upgrades include:

* Improved mobility features--specifically for the iPad and Android devices.
* Improved conferencing and collaboration including wideband audio, whiteboarding, and annotation features.
* Video communications now interoperate with LifeSize endpoints.

OpenTouch also now offers a software based SBC and broader support of virtualization with VMware.

New names too: the Business Communications solutions and Corporate Communication Solutions are now combined under OpenTouch for Mid-Sized and Large Enterprises (MLE), and Office Communication Solutions became OpenTouch Suite for Small and Medium Businesses. The OmniPCX portfolio of enterprise communications servers remains unchanged.

At ALU's recent analyst meeting in Chicago, Mr. Jan Zuubier, ALU-E’s head of Global Sales, reported general improvements around the globe's six regions, but he sometimes referred to pipeline rather than results. The trouble spot is Southern Europe, the epicenter of most global economic concerns. In North America, he reported, they are seeing improved traction in campus and data center deployments attributed to ALU-E's BYOD and mobility solutions. The company is focusing more on global accounts, which now includes firms headquartered in North America, too. He also reported notable improvements in healthcare and hospitality.

Much of the North American region's growth was attributed to ALU-E's new focus on the channel. Zuubier rattled off several marquee partners including AT&T and CenturyLink. ALU-E reports about 270 partners, and the firm developed a "Direct Touch" model to work with the channel rather than compete with it. ALU-E continues to field a direct sales force (in North America only), but the focus is now on working with or "collaborating" with its partners.

ALU-E believes it is well positioned for ongoing growth. With Genesys gone, ALU-E is more focused on unified communications, and it intends to capitalize on what it calls a shift from the "PC era" to the "personal cloud era." Thus the firm is focusing on mobility, cloud, and video communications. ALU-E intends to release new hosted offerings likely in 4Q2012 in EMEA, and in North America in 2013. ALU-E's cloud strategies will include simple over-the-top solutions, managed solutions, and full private cloud implementations.

One of the strengths of the portfolio is a decoupled and modular architecture between apps, clients, and services. This includes MyIC deskphones that offer a rich set of APIs and capabilities; My IC Experience Mobile Suite OpenTouch Conversation for a unified experience on tablets; and a broad portfolio for visual communications (collaboration, recording, content management and distribution including rights management and streaming, video mail, and immersive webcast solutions).

One impressive customer success profiled was the Dorchester Hotel in New York. This high-end boutique hotel wanted to create a state-of-the-art atmosphere in the guest room and uses the MyIC buttonless phones for a wide variety of room controls including lighting, blinds, temperature, music, and video entertainment. The result is a unique user experience and a reduction in room clutter (clock, radio, thermostats, light switches, etc.).

ALU-E is poised for progress with its UC and network gear portfolio. If the company can break through on awareness and channel, it could become a serious threat to competitors with larger North American market share. However, its primary obstacle to such success is its parent, which has been reeling since its 2007 acquisition of Lucent.

ALU-E has a lot under its belt, impressive technology, comprehensive products, worldwide distribution, strong innovation history, and a clear vision aligned with the market. The question is, can the overall firm afford the necessary investments to ramp its channel and portfolio?

Dave Michels is a Contributing Editor and Analyst at TalkingPointz.com