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Lucent lays out network future

Chief executive Richard McGinn isn't shy about discussing where he thinks the networking industry is heading.

ATLANTA-Lucent Technologies chief Richard McGinn isn't shy about discussing where he thinks the networking industry is heading.

Predicting that what will happen in the next ten years of the communications industry will "dwarf" the advances of the entire century, McGinn laid out an ambitious, and not unheard-of, future that includes converged voice and data networks and a blow-out of bandwidth.

"I believe we're witnessing something unique in history," he told a crowd of network devotees at the fall Networld+Interop industry trade show here today.

McGinn can't afford to be shy. Lucent is making huge bets that previously disparate voice and data networks will converge within a common layout using a standard transmission means, the Internet Protocol. The company's growth will also largely be driven by this industry shift, with nascent fruits exemplified in a quarterly earnings announcement tomorrow that is expected to reach about $8 billion, or about the size of that reported by rival Cisco Systems.

Like the executives from Nortel Networks who followed McGinn to the podium later in the day, Lucent is finding that the growth of data traffic is far out-distancing that of traditional voice usage, forcing their hand to become data supporters or perish.

Lucent and the likes of Nortel have traditionally been focused on voice-based communications equipment that uses circuits. But with technology advances and growing use of the Net, voice is thought to be "just another packet" of data, able to be carried over a common corporate network or sprawling carrier layout using IP.

"The world is quickly moving to packet networks, but for years to come these networks will have to coexist," McGinn told his audience. "Revolution is all about a multiplicity of networks. The road to this network of networks will be straight for some and circuitous for others."

McGinn said Lucent's data business now totals about $1 billion, a small fraction of the firm's more than $25 billion in total revenues for its most recent fiscal year.

While some view the networking industry as a market undergoing a period of maturation, some, like McGinn and Cisco's John Chambers, continue to hail a coming revolution, marked by a more intelligent, more versatile set of technologies that include high-speed networking equipment, fiber-based bandwidth, and wireless options.

"This business age is being measured in hours, minutes, and seconds," McGinn noted.

During a question-and-answer session after his address, McGinn said the company would continue to augment its own internally developed technology with acquisitions that make sense--a topic on the tips of many tongues now that regulatory shackles have been removed from the former equipment arm of AT&T.

Lucent's chief said the company would continue down this path which has resulted in 10 acquisitions in 30 months, but he would not be more specific. "We have a business model and a business strategy, and part of that strategy is acquiring companies," he said.

Separately, Lucent launched a new set of software and hardware technologies called IP Exchange Systems at this fall's Networld+Interop industry trade show in Atlanta that integrates telephone systems with computers and networking equipment. The new software is targeted at small and medium-sized businesses that want to move voice, video, and data across a common Internet Protocol (IP) network.

Lucent is pushing the new equipment as an alternative to a telecom PBX or in conjunction with an installed PBX. The system includes call manager software for routing of calls, a tool to convert faxes and telephones into IP clients on a network, and a IP gateway that connects the system to the traditional phone network.

A more complete IP ExchangeLink system is also available. The IP ExchangeComm system will roll out next March while the ExchangeLink bundle will ship in the second quarter of next year.