Lucent to sell enterprise services arm

Lucent Technologies is putting its corporate professional services unit up for sale as it streamlines its operations to focus on...

Lucent Technologies is putting its corporate professional services unit up for sale as it streamlines its operations to focus on large service providers.

The struggling network infrastructure provider hopes to find a buyer by the end of this year for the corporate services portion of its Lucent Worldwide Services business. Until a sale is completed, Lucent will continue to work with customers.

The corporate services group helps businesses design and implement their networks, recommending the best products for the job regardless of vendor. Lucent will retain the bigger portion of the group that is geared towards large service providers.

Lucent Worldwide Services has its roots in International Network Services, which Lucent acquired in October 1999. At the time, Lucent touted the division as the only vendor-neutral network consulting business affiliated with a major network equipment vendor. The Worldwide Services business as a whole has about 24,000 employees worldwide.

The corporate services group has some 1,400 employees and 600 customers in the US and Europe.

Analysts said there are many potential buyers for the business and that a sale would not affect customers. However, they advised customers to keep an eye on the transition.

"If most of the management team comes with the business, then there's a higher degree of confidence that they won't skip a beat," said Richard Dean, an analyst at IDC. "But if you see people jumping ship prior to the sale, I think there's an opportunity for them to slip and miss a beat."

Eric Goodness, an analyst at the Gartner Group, said one company that might be interested in buying the business is Avaya, the enterprise network equipment vendor that was spun off from Lucent last year.

Growth in the professional services industry has slowed along with carrier expansions and corporate purchases of new equipment, said Dean, who predicts that overall revenue will grow by 14% this year and up to 11% in 2002. This is down from a growth rate of more than 17% in 2000.

Lucent's sale of its enterprise services unit is part of an overall strategy to return the company's focus to its traditional customers.

"Their [Lucent's] focus is shifting away from the enterprise segment and more towards serving the largest service providers worldwide," Dean said.

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