12/5/2006 -- It's official: Alcatel and Lucent Technologies last week completed their merger transaction, relaunching -- as Alcatel-Lucent -- on Dec. 1.

With a presence in 130 countries and almost 80,000 employees, Alcatel-Lucent is an enterprise communications market leader in Europe and has more than 250,000 enterprise and government customers worldwide. It could also pose a significant threat to Cisco Systems Inc., which has traditionally dominated an enterprise segment in which Alcatel-Lucent seems to expand its presence. "Alcatel-Lucent executives have expressly called out its enterprise business as a growth area for the company. This will help dispel concerns that the new company will be a carrier powerhouse whose telecom business overshadows its enterprise business," wrote Brian Riggs, a principal analyst for enterprise communications with consultancy Current Analysis Inc. "Because of Lucent's greater brand-name recognition in North America over Alcatel, the merger of the two organizations has the potential of giving Alcatel a higher visibility in the region than it has had in the past."

At the same time, Riggs noted, Alcatel-Lucent has its work cut out for it. "A merged Alcatel and Lucent will be able to leverage product and service offerings that have the potential of benefiting enterprises worldwide," he pointed out. "However, given Lucent's minimal enterprise expertise, it remains to be seen when Alcatel-Lucent will actually be able to bring these offerings to bear in expanding its share of the enterprise networking and communications markets."

Not that Lucent was entirely devoid of enterprise aspirations, of course. "A couple years ago, Lucent developed a softswitch that can be positioned in very large enterprise environments, but the company has not historically marketed it aggressively. Alcatel's enterprise voice expertise could help better establish this platform in large enterprise accounts," he suggested.

The threat to Cisco, such as it is, is purely speculative at this point, according to Riggs. In the meantime, he urged, the networking giant should take the $26 billion Alcatel-Lucent bull by its horns: "Cisco and Nortel should cement relationships with North American service providers and systems integrators reselling their enterprise communications and network systems so Alcatel-Lucent finds it difficult to encroach on them." -- Stephen Swoyer