Lucent Technologies Inc. is looking for hope on the horizon by giving ISPs (Internet service providers) tools to deliver value-added services like Web filtering and virtual private networking to their customers.
The company announced a new high-speed networking device for improving security and adding services on Monday, as part of an unveiling of its overall Internet strategy.
Lucent's strategy is based on intelligent switch technology from Spring Tide Networks Inc., acquired last year. Lucent intends to roll out the Spring Tide 7000 switch, which will permit business networks to provide services along set policy lines. "The network changes its behavior, based on the user and (the user's) needs," said Tony Gale, Lucent's vice president for IP portfolio management.
The switch will allow network managers to set security parameters for users, like the types of Web sites an employee can view, the strength of a firewall, or the kinds of access permitted on a virtual private network.
Providers of high-speed Internet service view such services as a potential growth area. "There is a growing demand for value-added services," said Aaron Kane, director of channel sales at Atlantech Online Inc., a mid-sized ISP in Washington, D.C. He estimates that about 20 percent of the company's clients desire value-added services, but most are asking for more speed, at lower prices.
"The Internet is a technical success but a business failure," said Tom Nolle, an analyst from CIMI Corp. ISPs need to provide more than Internet access in order to survive. Value-added services like virtual private networks are critical to improved profitability, he said.
Lucent has been hit hard by missteps in the networking market and the general economic slowdown. The company announced a 10,000-worker layoff Friday. Lucent executives stressed in a conference call Monday the potential of this technology to bring some of its customers closer to profitability.
"The service provider market is going through another transition," said Janet Davidson, Lucent's Internetworking systems group president. "While revenue growth has been explosive, few, if any have been profitable... This segment must focus on driving to profitability instead of driving to growth."
She said the strategic plan for Internet services may involve some "strategic hires," but noted that "the Spring Tide team was executing on plan," so Lucent doesn't plan any major personnel changes in this division.
Lucent Technologies, based in Murray Hill, New Jersey, can be reached at +1-908-582-5800 or on the Internet at http://www.lucent.com/.