Lucent Technologies Inc. said this month that it plans to sell its 1,400-worker enterprise professional services division by the end of the year, as it continues to restructure its business in a tough market.
James Kelleher, an analyst at Argus Research Corp. in New York, said Lucent’s decision is consistent with what the Murray Hill, N.J.-based company has been saying and doing for months as it restructures and sheds unwanted divisions in order to eventually serve only its core customers.
“This is just kind of a fraction of [Lucent],” Kelleher said of the services division. “It makes sense from a corporate point of view…to just focus on the market they want to be in.”
Richard Dean, an analyst at International Data Corp. (IDC) in Framingham, Mass., said the news should be no surprise, since Lucent has been clearly voicing such intentions since last year. “It’s another step in the process for Lucent to refocus on its core business,” he said.
One problem, however, is that Lucent probably won’t get what it’s seeking for the division, Dean noted.
“I don’t think they’re going to get the kind of value out of it that they expect,” he said.
The division provides network consulting, design and integration services to Lucent customers in the Fortune 100 ranks. The unit is headquartered in Sunnyvale, Calif., and is part of Lucent’s Worldwide Services business, which has 24,000 employees.
“What we’ve been doing in the last year is focusing ourselves on our large service providers,” because those customers are continuing to generate revenue for the company, said Lucent spokesman Bill Price. “Our top 30 customers make up 70 per cent of our total revenues. You have to make decisions on what fits and what doesn’t fit.”
Price said the enterprise services group is a “strong business with a talented team” that will likely be sought by another company.
The group was previously part of International Network Services, a company that merged with Lucent in October 1999. It serves more than 600 customers in North America and Europe and ranks as the third-largest network services player in the U.S., according to IDC.