In the past, Lucent's strength was in producing back-end equipment for seamless voice networks. But with the growth of Net traffic, the company is looking to be the leader for technology that can work with the new networks run by Internet service providers and communications companies.
"Now, more than ever, Lucent is positioned to be a clear leader in communications networking," said Lucent chief executive Rich McGinn at a press conference in San Francisco.
The marriage of phone and data networks is one of the biggest trends in the networking industry. The growth of the Internet has forced communications companies to alter their network build-out plans to include a larger amount of Internet-based equipment able to carry data "packets" at a high speed.
The Ascend acquisition closed last week, following a shareholder vote. Integrating Ascend's technology will allow Lucent to better compete with the likes of Cisco Systems and Nortel Networks, among others, in its bid for a piece of the Internet equipment pie.
With Ascend, Lucent expands its Silicon Valley empire that now includes over 4,000 employees across 10 cities in the area. "It is really becoming a bi-coastal company," said McGinn. "We are following the talent."
McGinn characterized published reports of a recent 10 percent staff cut through layoffs and departures at Ascend as "rubbish" and "not true."
McGinn said the company could continue to grow at 3 to 5 percent above the average for the networking industry--a result, he claimed, of the firm's focus on high-growth businesses.
"We see the opportunities continuing to grow," he noted.
Lucent will organize its newly acquired technology into five groups. The firm plans to focus on the Internet using voice-on-data networks, as well as offer virtual private networking (VPN) technology. Lucent will also introduce advanced uses of Internet protocol (IP)-based software and other associated services, according to a Lucent spokeswoman.
For the high-end market, Lucent now has several weapons, including its own IP and asynchronous transfer mode (ATM)-based network switches, as well as those of Ascend, and the speedy routing technology it acquired from Nexabit. Nexabit's switching technology is currently in tests.
Ascend is now part of Lucent's newly crafted InterNetworking systems unit.
Mory Ejabat, former chief executive of Ascend, plans to stay on with Lucent as a consultant for an "undetermined" period. In previous interviews, the executive said he would stay through the transition. Ejabat has already taken board positions with a handful of other companies in the networking and communications industry.