Analysis: Bell Labs slugs it out

Networking giant is using garden creatures to conquer the universe. Louisa Bryan reports

If you live outside the US, the name Lucent Technologies probably doesn?t leap to mind as one of the heavies of the networking scene.

However, analyst GartnerGroup now rates Lucent alongside Cisco and Nortel as one of the three networking suppliers most likely to reign over the brave new converged coms world.

Spun out of the AT&T leviathan in 1996, the US telco equipment supplier bought its former parent?s Bell Labs unit soon after, and has since been busy repositioning itself for the convergence of voice and data networks.

Traditionally strong in the voice market, Lucent has a long haul ahead of it to make up the data networking territory already claimed by the likes of Cisco and Nortel. To address its shortcomings, it has been on a spending spree, with its most recent acquisitions including Ethernet specialist LanNet, and Gigabit Ethernet switch supplier Prominet.

It reportedly still has $30 billion left in its war chest, and according to Gartner research director Neil Rickard, it will need every penny of this to plug some of the gaping holes that still remain in its portfolio. Lucent?s lack of local area network (Lan), ATM Router, Internet protocol (IP) and Frame Relay equipment and distribution channels in Europe put it well out of the race for the time being, Rickard thinks. One large strategic acquisition or a bundle of smaller ones could solve this, he says, with 3Com the favourite among industry watchers.

Lucent?s main revenue streams are for now still in voice networking, with Bell Labs ? the inventor of the transistor, the laser, C++ and Unix ? as its crown jewels.

Lucent is pumping 11% of its annual revenue into the Labs. In return it asks for a more pragmatic research and development focus, so Bell Labs, home of eight Nobel prize winners, is now split equally between new, more business-oriented and traditional fields of study.

While some of its scientists busy themselves in identifying ?dark matter?, the substance that accounts for 90% of the universe?s mass, others are pushing forward in areas such as data, wireless and optical networking, software development, and semiconductor technologies.

A tour of Bell Laboratories? New Jersey campus still has a distinctly test-tube feel to it. Astrophysicist Tony Tyson can be found in a cluttered laboratory engrossed in his mission to map the universe?s dark matter. You can stand inside what is claimed to be the world?s most silent room, where all things acoustic are put to the test, or visit the slug emporium, where biological learning and memory functions are being explored on arguably the world?s least glamorous wildlife.

As you stray closer to the Lucent head office buildings, the scientific labs are replaced by computer labs. Here, success is measured as much by meeting delivery schedules as developing innovative products.

Dan Stanzione, chief operating officer of Lucent and president of Bell Labs, believes this technology shift has given the Labs a new lease of life.

?Linking to the market has generated a new enthusiasm for the staff to do their research and take it out into the world,? he said.

According to Gartner?s Rickard, one of the best networking products to roll out of the Labs is a carrier-grade gigabit router called the PacketStar IP Switch. The intelligent Layer 3/Layer 4 wide area network (Wan) routing switch shipped this year, and was designed for Internet service providers to offer a low-cost service for web surfers and a premium service for businesses. It includes the PathStar Access Server, an IP server that handles multiple traffic types, ISDN and ADSL.

Labs? WaveStar optical networking family of products has also grabbed market mindshare.

Other developments bubbling away for release over the next few years include a high-performance hands-free communications system suitable for use in factories and automobiles; a storage and retrieval product called Datablitz for high-speed user access on a shared database; a semi-conductor device that creates an electrical signal that can encode up to 40Gb of information per second or more; and a web search engine for multidimensional information searches.

Not in the same league as the transistor? Well, watch this space. Lucent might just be the first networking equipment supplier to announce that slugs account for 90% of the mass of the universe?