The New Alcatel-Lucent Enterprise
It’s been an exciting year for Alcatel-Lucent ,which recently completed the sale of 85% of its enterprise business (ALU-E) to China Huaxin, a Chinese investor focused on the telecom space. Michel Emelianoff, President, Alcatel-Lucent Enterprise recently addressed industry analysts to discuss the changes and what they mean for ALU-E. Emelianoff told the analysts that Huaxin is a very long-term investor, looking to create long term assets.
Starting with some background, Emelianoff explained that the market is transforming, with big changes in mobile, multimedia, the evolution to SDN, distributed intelligence, etc. In addition, there is a transformation in terms of the business model about how businesses consume the communication services (moving from premises-based solutions to the cloud). In light of this transformation, ALU-E needed to transform as well.
The new ALU-E is a French company with two major shareholders – China Huaxin, which now owns 85% of the company, and ALU, with the remaining 15%. The new company will leverage its rich network of 2500 business partners across the globe, and will continue to have an indirect model, which is “in the DNA of the organization.”
ALU-E has an aggressive agenda, and is looking to double the size of its business in the next five years. As part of its transformation, ALU-E will go after certain sectors and geographies in order to be in the top three in these markets. In addition, the company will transform how they deliver value to the market, evolving from being product centric to being focused on delivering business outcome to customers and business partners (music to my ears!). Transformation will be a journey, with much of the activity happening throughout 2015.
Emelianoff describe the four major pillars of ALU-E’s growth strategy:
- Leverage ALU-E’s position in its core market, EMEA;
- Very aggressively go after geographies where there are opportunities and white spaces being created through the transformation of the market. and create value in those geographies. ALU-E has the opportunity to generate significant growth in the Chinese market, as well as other markets;
- Focus on specific sectors for solutions and capture significant market share and generate market value in thse sectors. More information on this will be disclosed later in the month; and
- Cloud – ALU-E has already announced its personal cloud strategy, and has started to release offers in this area and is in a position to accelerate.
The good news is that China Huaxin appears to be willing to invest in ALU-E’s future. Noting that China Huaxin has the funds and an appetite to grow the business, and wants to double ALU-E’s business. Emelianoff stated that the company will continue to grab and gain market share in Europe, and will accelerate its growth in the networking space, while leveraging its ability to expand its presence in other geographies. This seems to be a very reasonable approach. The bad news is that ALU-E may not get the attention it deserves in North America. The company has long battled to be a significant player in North America, but never gained the mindshare or market share that some of its competitors have enjoyed. According to conversations I’ve had with several ALU-E channel partners, the company will clearly be at a disadvantage when it comes to U.S.-based government entities that are reluctant to deal with Chinese companies.
The company has many challenges ahead, as do all of the vendors in the UC/business communications market. Hopefully Huaxin will allow ALU-E to continue innovating and developing new and interesting products and services, and will put money into marketing to help the company differentiate itself in this ultra-competitive market. Bonne chance!