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ALU-Enterprise Receives a Financial Boost from a Private Investor
Alcatel Lucent to sell enterprise unit to China Huaxin
As the enterprise communications market grinds to a halt with premises-based solution sales declining and hosted/cloud solutions only slowly picking up, it becomes increasingly challenging for vendors to grow and remain profitable. Large resources and significant investments in R&D are needed in order to remain competitive and capitalize on growth opportunities in new markets.
Industry pundits expect a major shakeout in the enterprise communications competitive landscape in the coming years and many are betting on a future dominance of Cisco and Microsoft. It doesn't seem like the rest of the vendors will give up so easily, though.
Alcatel-Lucent recently reported slight growth in 2013 and significantly improved margins. The Enterprise unit did not fair so well and reported a slight decline in revenues, but it also boasted improved margins. Acknowledging the challenges in todays' enterprise data networking and communications markets, Alcatel-Lucent's Enterprise unit sought external financing sources and was able to forge a partnership with Chinese investor Huaxin. This partnership is expected to help Alcatel-Lucent's Enterprise division to invest in growth areas and potentially double the size of the business over the next 5 years.
Will Alcatel-Lucent remain one of the top players in enterprise communications as the market evolves towards hosted/cloud solutions and the competitive landscape consolidates?