Lucent Spinoff to Target E-Gov Globally

Lucent Spinoff to Target E-Gov Globally

Nancy Lamberton

By Jennifer Freer, Staff Writer

Lucent Technologies Inc. has selected a familiar face to become president of its spinoff company, a woman who intends to expand the new company's government business globally and cash in on e-government solutions.

Nancy Lamberton, former vice president of sales and marketing for Lucent's Government Solutions business, will become president of the government division of Avaya Inc., the new company. Donald Peterson, executive vice president and chief financial officer of Murray Hill, N.J.-based Lucent, will become chief executive officer.

Lucent announced March 1 that
it would create a company consisting of its slower-growing businesses that serve large corporations and government agencies, so it can concentrate on wireless telephones and Internet equipment.

According to Lamberton, most of Lucent's existing government business, including the government solutions unit, will move into Avaya. That business includes the General Services Administration schedule, the $3 billion Navy Voice, Video and Data Communications contract and the $1 billion Army Digital Switched Systems Modernization Program contract.

Lucent will not recreate a government solutions organization, Lamberton said. But it will continue to support the federal government by selling products and services through service providers. Avaya's focus will be e-government on a global scale.

The new company will have about $8.3 billion in annual revenue, while Lucent will keep $30.5 billion, according to company officials. The company does not break down its government business revenue.

As president, Lamberton's duties not
only include boosting the company's
government business but expanding it to address the needs of governments worldwide. State and local business will grow within the new company, and it will push to become a top player in the e-government arena, Lamberton said.

The spinoff will become a separate, publicly traded company by Sept. 30. Its headquarters will be in Washington.

The company will include Lucent's
Private Branch eXchange, a small version of the phone company's larger central switching office, and its business cabling and local area network-based data businesses to shareowners.

One analyst said the new company should be able to penetrate the government market on a global scale.

"Lucent is the shining star of fiber optics and data communications, and that is exactly what the government needs," said Paul Hammer, vice president in charge of the technology, media, telecommunications group for Houlihan Lokey Howard & Zukin, an investment banking firm in McLean, Va.

"The government needs secure bandwidth with high-quality technical solutions, not just in the United States, but globally," he said.

The new company already has begun to market to government agencies abroad by establishing four regions with sales teams. They include the Europe, Middle East, and Africa region; the Latin and Central America region; the Asia Pacific region and the Canadian region.

Breaking off from Lucent gives the new
company flexibility to choose where and
how much to invest in research and
development, especially in e-commerce, instead of relying on Lucent decisions, Lamberton said.

In diving into e-government, the company will be seeking partners to help fulfill all its requirements, she said. The
spinoff will carry with it alliances with Computer Sciences Corp., Electronic Data Systems Corp., Lockheed Martin Corp. and Science Applications International Corp., for which it provides subcontracted products and services.

"The strength we bring to the market as a new company is in e-business applications," Lamberton said. "The new company will build on e-government solutions using technology and products together, which is an area where there are a lot of opportunities."

Lamberton said big opportunities also
lie in expanding her company's state and
local government e-business, and that
it's working on forming partnerships there as well. Other future business is being eyed in the network security arena, firewall products and voice-over-Internet protocol applications.

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