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Online Video Helps Cisco Grow

Mike Sachoff — Mon, 15 Jan 2007 21:51:02 +0000

The rapid growth of online video is forcing service providers to upgrade their networks to deal with the increased Internet traffic and broadband demand. Companies that provide infrastructure for the Internet are seeing their products sell at a rapid rate and are turning healthy profits.

Companies like Cisco Systems, Juniper Networks, and Alcatel-Lucent are all cashing in on the online video explosion. The products they make like routers and switches direct traffic over the web and help companies manage traffic as well as direct large amounts of data.

Zeus Kerravala, a network infrastructure analyst with Yankee Group said in an AP article,” Cisco would like to see video delivered to every device everywhere, if you’re looking to something to create the next wave of network upgrades, video is front and center. It drives bandwidth like we’ve never seen before.”

Online video is expected to grow from $1.3 billion last year to $7 billion by 2010, according to the research firm Parks Associates. Even so companies are still struggling with ways to generate revenue while avoiding the copyright infringement issue.

Around 210 million people have a broadband connection globally, and the number is expected to increase to 40 to 50 million new subscribers each year, according to networking and telecommunications researcher Dell ‘Oro Group.

Increased traffic and video’s large bandwidth requirements are creating a golden opportunity for networking companies.

Cisco has benefited the most from video. Their shares are up 50 percent from a year ago and financial analysts believe the company’s annual revenue can grow 20 percent this year to around $34 billion.

“This is going to be a multiyear phenomenon – right now you’ve got the YouTubes and the consumer applications sucking up capacity on the networks, and we haven’t even had IPTV deployments in any significance yet,” said Troy Jensen, senior research analyst with investment bank Piper Jaffray & Co. “But once this couple-year investment cycle winds down, it could potentially be tough times again.”

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Ericsson Not Interested In Juniper

WebProNews Staff — Tue, 11 Apr 2006 19:10:04 +0000

Carl-Henric Svanberg, CEO of telecom hardware maker Ericsson, said his company has no interest in acquiring Juniper Networks.

After the Alcatel (ALA) and Lucent (LU) deal took place, speculation over the future of Juniper Networks (JNPR) began to swirl.

Those rumors soon filtered around to the point where the Swedish tech firm Ericsson (ERICY) had to deny they were looking at Juniper with an open checkbook in hand.

Svanberg told reporters on Monday, “It’s not critical for us to own routers… We have not looked at them,” in reference to Juniper.

Hopeful investors pushed Juniper up amid that speculation, but the deflating comments by Svanberg pushed the stock price back to 18.76.

For Juniper’s part, the company continued forward with its normal business. The company announced the availability of its next-generation Secure Access SSL VPN Federal Information Processing Standards (FIPS) appliances, the SA 4000 FIPS and SA 6000 FIPS.

Those products are intended for government use, particularly at the federal level. Juniper does need to see significant adoption of those and other parts of its hardware lines in the wake of the Alcatel-Lucent merger.

Lucent has been one of Juniper’s biggest customers, along with Ericsson and Siemens. The business Lucent gave Juniper would likely go to Alcatel now, draining a large part of Juniper’s revenue stream, the Wall Street Journal reported.

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David Utter is a staff writer for WebProNews covering technology and business.

Alcatel, Lucent Merge For $13.4 Billion

WebProNews Staff — Mon, 03 Apr 2006 22:25:53 +0000

The French communications hardware maker Alcatel will mercifully end Lucent Technologies unfulfilled expectations and position the company to better face Cisco in the marketplace.

Alcatel ((ADR) NYSE:ALA) and Lucent (NYSE:LU) announced their merger, which will form a combined company with a market cap of about $36 billion.

A fixed exchange ratio of 0.1952 will be the centerpiece of the stock-for-stock merger, the companies said in a presentation. That will give Lucent shareholders about $3.01 worth of Alcatel American Depository Shares for each share of Lucent, which closed Friday at $3.05.

Lucent CEO Patricia Russo will move to Paris to be the CEO of the merged firm, with current Alcatel CEO Serge Tchuruk taking the position of non-executive chairman of the board. The new board will have six current directors each from Lucent and Alcatel (including Russo and Tchuruk); they will mutually choose two new independent European directors.

The company plans to eliminate ten percent of its combined workforce after the merger, reportedly as many as 8,800 people. Also, Alcatel will form a separate, US-based independent subsidiary to allow it to compete for certain US government contracts. Alcatel plans to have that company managed by a three-member board of US citizens “acceptable to the US government.”

Alcatel expects collective revenues from the merger to reach almost $25 billion based on both companies 2005 performance. They also expect to enjoy a competitive benefit from the merging of the two firms research and development teams. Lucent’s main base of Murray Hill, New Jersey, for Bell Labs will remain its US headquarters.

Among their technology developments, Alcatel believes this will strengthen their Triple Play/IPTV deployments of over 40 projects and more than 20 commercial live networks. This also leads into Quadruple Play services that introduce mobile television to the mix.

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David Utter is a staff writer for WebProNews covering technology and business.

IPTV – Microsoft and Alcatel in Global Deal

Nick Wilson — Tue, 22 Feb 2005 14:29:13 +0000

And as if you needed any more convincing that Microsoft wants to own your home …

Link: Microsoft, Alcatel in Internet TV pact:

As part of their joints efforts, the companies will develop and customize new applications for various markets around the world and enhance network reliability for large-scale deployments of the technology, they said.

The collaboration pairs Paris-based Alcatel, which provides telecom equipment for voice, data and video, with the world’s largest software company, based in Redmond, Wash.

Alcatel will be Microsoft’s preferred network access and systems integration partner, while Microsoft TV will be Alcatel’s preferred software partner for the Internet-television efforts, globally.

Personally, sooner rather than later please – i dont care who makes it possible, i just want it – im sick of Danish TV heh..

Nick Wilson is the publisher and founder of Threadwatch.org.

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Alcatel Shares Fall After 4th Quarter Results

WebProNews — Thu, 03 Feb 2005 15:17:54 +0000

Alcatel shares fell 8% after the company reported fourth-quarter results with operating and net profits not living up to expectations.

The company’s net profit reached 281 million euros (365 million dollars).

A Turkish press article points out that “Alcatel was severely hit by the shake-out which followed the end of the Internet and technology boom four years ago.”

Alcatel’s press release says:

Alcatel’s Board of Directors reviewed and approved fourth quarter and full year 2004 results. Fourth quarter sales were up by 10.7% at Euro 3,812 million compared with Euro 3,443 million (up 13.4% at constant exchange rate) in the same period last year. The gross margin was 34.4%. Income from operations amounted to Euro 393 million, a 10.3% operating return on sales. Net income pre goodwill for the quarter was registered at Euro 139 million or diluted Euro 0.10 per share (USD 0.14 per ADS) and net income after goodwill at Euro 40 million or diluted Euro 0.03 per share (USD 0.04 per ADS).

For full year 2004, sales amounted to Euro 12,265 million, a 5.7% increase compared to 2003. At a constant exchange rate, yearly sales increased by 9.5%. The gross margin for full year 2004 was 37.3%. Income from operations was registered at Euro 978 million, an 8.0% return on sales. Net income pre goodwill amounted to Euro 689 million or diluted Euro 0.51 per share (USD 0.68 per ADS) and net income after goodwill amounted to Euro 281 million or diluted Euro 0.21 per share (USD 0.28 per ADS).

Serge Tchuruk, Chairman and CEO, summarized the Board’s observations:

“2004 has been characterized by a strong turnaround at Alcatel in both sales and profits. While carrier markets showed a modest recovery, Alcatel’s sales increased by close to 10% at a constant Euro/USD exchange rate. In spite of very competitive market conditions our operating income came close to the one billion Euro mark, which is twice last year’s performance. A positive free cash flow has been registered in both the fourth quarter and full year, even after financing restructuring programs.

We are confident that Alcatel is on the right track. We have maintained an aggressive strategy in developing or acquiring disruptive technologies, like the mobile NGN from Spatial Wireless, and are now getting the benefits of our applications and solutions approach. We are quite encouraged by the 50% revenue increase in 2004 in fixed/mobile applications and by major successes in end-to-end solutions integration such as triple play.

An aggressive strategy has also been followed in establishing footprints in certain high potential markets of the emerging world, accepting temporary losses as an investment for future growth. The gross margin of the fourth quarter was particularly impacted but we nevertheless reached our goal of a double digit operating margin in that quarter under adverse currency conditions.

We will maintain our strategic direction in 2005, closely monitoring our operations in order to reach our priority target, which is a 10% operating margin. In that regard, even if market conditions are likely to stay very competitive, we are confident that the required selective commercial strategy will leave room for revenue growth, given the positioning of our product offering and our momentum in the market place. Considering this operating margin target and the 5% reduction expected in comparable fixed expenses, we will maintain some flexibility in the gross margin, permitting investment in new markets or new technologies as required. After the execution of reserved restructuring plans, new restructuring costs are now expected to be brought down to about 1% of sales in 2005 and to be entirely financed by capital gains.

In terms of business trends, we expect a positive inflection in fixed communications by mid-year, with our sales fuelled by the triple play momentum, a continuation of our growth in mobile communications, due to our good positioning in emerging markets, and significant progress to be achieved in vertical markets for our private communications group”.

Outlook

“We anticipate a low to mid single digit growth rate in sales yoy for the first quarter as well as for the full year 2005. Earnings per share (pre-goodwill) should grow double digit for the full year beginning with a positive EPS pre-goodwill in the seasonally low first quarter.

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NetLogic Delivers Data Plane Products for Alcatel’s 7670 RSP

NetworkNewz — Tue, 07 Sep 2004 16:55:46 +0000

NetLogic Microsystems announced that it is delivering data plane products for Alcatel’s highest-performance multi-service switching and routing product, the 7670 Routing Switching Platform (RSP).

This is the second major project between Alcatel and NetLogic Microsystems, the first involving cooperation on Alcatel’s previously announced 7301 Advanced Services Access Manager (ASAM) platform.

NetLogic Microsystems’ products for the 7670 RSP platform include solutions designed to interface with custom ASIC’s. These solutions perform high-speed search operations on routing, ACL and security databases and are ideal for packet classification, policy enforcement, IPv4 and IPv6 forwarding, MPLS searches, network security and QoS enforcement for differentiated services in core, edge, metro, campus and enterprise networking applications.

NetLogic Microsystems’ product for Alcatel’s 7301 ASAM platform includes a glueless solution, which is designed to interface directly with AMCC Network Processors. The glueless solution for the 7301 ASAM platform offers support for multiple network processors, enables automatic learning and aging for MAC addresses and includes a policy engine that enables fast and granular control over network resources through rules support, thereby allowing network administrators to authorize access to applications based on the user privileges. Additionally, this solution supports traffic policing to allow the network manager to control the maximum rate of traffic sent or received on an interface, and to partition a network into multiple priority levels or class of service (CoS). The glueless solution is also bundled with a full suite of firmware/software including Advanced Table Management Algorithm (TMA) and management software for policing and billing support, which greatly accelerates system development and time-to-market.

“We are very pleased that Alcatel, a world leader in telecommunications, has worked with NetLogic Microsystems to enhance the value of Alcatel’s most advanced products by utilizing the processing capabilities of multiple NetLogic Microsystems’ products,” said Martyn Humphries, vice president of Marketing for NetLogic Microsystems. “These products demonstrate NetLogic Microsystems’ track record of being the first to deliver the highest performance and highest technology devices in the marketplace, making our products a perfect fit for Alcatel’s 7670 RSP and 7301 ASAM.”

Alcatel’s 7670 RSP is optimized to deliver multiple new and existing services on a converged IP/MPLS infrastructure, due to hardware and software enhancements. New software released in May 2004 includes high availability IP VPN RFC2547 service enhancements leveraging ACEIS Non-Stop Routing technology, Ethernet Virtual Leased Line service over MPLS, and Ethernet to FR/ATM Service Interworking over MPLS. Improved MPLS service resiliency is provided along with MPLS Label Switch Path (LSP) “modify without break”, which is the ability to increase an existing LSP’s bandwidth without disrupting service. Also released in May 2004 is the Channelized Multi-Rate 48 Line Card (MR48). This card supports 2.4 Gb/s of wire-rate IP, MPLS and ATM forwarding, including concurrent routing and signaling protocols for IP/MPLS and ATM Private Network to Network Interface (PNNI) on the same port. Fully software configurable, the MR48 enables any service on any port using any protocol, giving carriers a flexible, operational roadmap to deliver uniform services throughout their networks — now and in the future.

Alcatel’s 7301 ASAM has multiple benefits for service providers. Each access line can deliver audio, video, and data and the total capacity of an Alcatel 7301 ASAM can support up to 10,000 simultaneous users. This enables service providers to generate new revenues from advanced broadband entertainment services such as on-line gaming, music, video, and pay TV. Improved capacity, nation-wide coverage and guaranteed service level agreements mean carriers can confidently tap the lucrative small and medium enterprise market by offering low-cost virtual private network (VPN) services over DSL. As DSL access moves closer to even the most remote customers, the 7301 offers cost-effective aggregation of remote nodes and a Gigabit-Ethernet interface provides a smooth evolution towards efficient aggregation of Ethernet Metro Area Network (EMAN) services.

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