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Re: (ASCEND) The MAX TNT (fwd)

At 02:11 AM 10/20/97 -0700, you wrote:

>Lucent doesn't matter - the PM-4 is about ready.  

I think everyone in this industry knows that "about ready" means that only
95% of the work remains - the tough part of integration, compatibility,
worldwide certification, regression testing, .... that the TNT has already
gone through, and that the PM-4 will only be starting.

It doesn't have anything
>to do with Lucent.  Of course, it has a LOT of growth potential built
>in.

"growth potential" - sounds like you're falling back on selling futures...:-)

>>products and they probably don't want to spend a whole lot of time learning
>>another access router's issues (let alone one from a company that has only
>>recently started developing their own router code).  I would bet that these
>
>I hope you're not referring to Livingston, since Livingston has been 
>developing its own router code since *day one*.  

That was an oblique reference to our friends in Chicago, perhaps a little
too oblique ;-)

>xDSL takes more to implement, but I wouldn't be quite as complacent as
>you are.  Trust me....

I'm not suggesting complacency - what I am suggesting is that its
relatively easy to build a big chassis with a high speed backplane, much
more difficult to build a complete system with the full complement of
routing features, option cards, and VPN/Security, management, extended
RADIUS, etc. features that high-end users expect - and to provide this all
in a system that works together and has the bugs worked out.   

>>>years use in virtually all the major ISPs around the world.  Bay and
>
>Livingston isn't exactly new to the ISP market, nor are we limited to small
>users only.  So many people make the mistake of thinking so.

I'd like to see the Livingston market share in the top 30 ISPs - given
revenue of only $48 Million (less, I think, than Ascend sold in the
Pipeline products)I think that it has to be tiny. In any market, the
shakeout usually hits the weakest, smallest players first...

Fundamentally the Internet access market is maturing and its just too late
to be thinking of competing in the broader access market as Livingston is
trying to do. What next, multiport backbone routers for the Enterprise market?

As I see it you've got a number of important problems at Livingston (some
free input from a consultant - you might say you get what you pay for ;-)

1. Livingston is a tiny third tier player that has just married an
elephant. Making that elephant dance could be challenging - and even Cisco
knows that you've got to dance in the remote access market or you get left
by the sidelines.  While the thought must have been that Lucent will
provide the sales, support and "substance" that is required to compete in
the higher-end business, the truth is that they've tied themselves up with
a ponderous beast. I believe the most likely scenario is that Livingston
will spend the next two years trying to teach Lucent people what an access
router is, and by that time it will be too late.

2. IMHO Lucent overpaid for Livingston and that makes for a lot of happy,
rich Livingston employees that have finally cashed out - these employees
will probably be more concerned with the new houses at Tahoe and new cars
than the next release of the PM. And, how many Livingston employees ever
wanted to work for the Telephone company?  I expect you'll see a mass
exodus over the coming year.

3. Livingston will have to operate under a whole new set of guidelines with
Lucent - new gross margin guidelines, new reporting structures,... in my
view the acquisition will mean that for the next two years people at
Livingston will be learning to operate in very different, very
process-oriented environment. Probably not a lot of fun, and not a recipe
for success. 

>Did you miss the fact that Livingston is now part of Lucent?  Want to
>talk R&D budgets now? ;-)  

I'm sure the engineering groups in Livingston will mesh perfectly with
those in Lucent ;-)  How long does it take for each new release of a
central office switch to come out?  
>
>And I believe the PM-4 debut will be there. :-)

We all know that debuts mean little - lets compare installed bases in a year.

Brian.

(again, not affiliated with Ascend in any official capacity)


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