Interesting reading in Om Malik's article for
Business 2.0 magazine that some parties are expecting a wave of
mergers and buyouts to ensue in the ranks of networking equipment
vendors if Alcatel and Lucent jump into bed together.
This could create a domino effect and I hope it does," said
technology investment advisor Pip Coburn.
Another commentator noted that the proposed Alcatel/Lucent
merger is reflective of the fact that incumbent telcos (such as Telstra) are regaining their market power and so are better able
to garner discounts from the vendors.
Full Duplex's gut reaction upon reading these two comments was
What business in their right mind would want the ranks of
either vendors or telcos to consolidate?
How many of you comms managers out there dumped Telstra some
time ago for smaller, more innovative players?
In the consumer space ... certainly no ADSL2+ user on speeds
of 24Mbps wants to go back to the days when nobody owned DSLAM
networks except for the incumbent.
On the vendor consolidation front, those same comms managers
and even the telcos themselves will recall how powerless they
were when a rash of proprietary standards created by incumbent
hardware vendors used to make it difficult to connect kit from different vendors together.
Let's not go back to the bad old days of lock-in.
And for the record, there's another reason that prices are
being cut down.
As analyst group Gartner notes in a second article here by Sumner Lemon and Martyn Williams, the
incumbent equipment vendors are facing a challenge from Asian
manufacturers like the oft-mentioned Huawei and ZTE.
These companies are certainly moving out of their comfort zone
into other locations ... for example in Australia Huawei
yesterday signed twelve month support agreements with NCR and
Silcar to service local customers.
I'd like to see these guys provide some extra competition to the big hardware vendors. End customers would definitely be the winners. But here's hoping the smaller players will stick around anyway. If they're nimble enough there should be room for them to play between the elephants' feet.