Lucent CEO: Convergence is key

Richard McGinn, CEO at Lucent Technologies Inc., of Murray Hill, N.

Richard McGinn, CEO at Lucent Technologies Inc., of Murray Hill, N.J., is an IT veteran with 28 years of experience in global communication systems. PC Week Executive Editor/Strategies Stan Gibson caught up with McGinn in Atlanta last week following the latter's keynote address at NetWorld+Interop to discuss a variety of topics ranging from convergence to high-growth markets. The following is an excerpt from the PC Week Webcast interview.

PC Week: In your keynote, you talked about convergence; that is the theme in networking?

McGinn: Absolutely. And, in fact, it's moving from a thematic note to a reality, and one that's impacting our lives every single day, at a professional level and at a personal level.

PC Week: You mentioned free stock trading within the next year.

McGinn: I believe people are re-evaluating how value is created.

We've seen a number of instances where software has been given away for free. People are offering services on the Internet.

The expectation is that the advertising revenue will support their business model. So, whole notions of how value is created are changing.

This notion of free trading is but one example of what's likely to occur because people will be asked to participate in other value services on a fee basis. But this particular service will be offered for free.

PC Week: Lucent has made about 30 acquisitions since 1996. Are we going to see more this year?

McGinn: What we've said since Day One is that we don't have an "acquisition strategy" per se.

We've got tremendous organic growth, and we believe we should continue investing in our high-growth businesses. Those that are not growing rapidly, or are expected not to grow rapidly in the future, will wind up being candidates for divestiture for us. But as well, we will acquire great people, great technology and a market position to complement our organic growth.

And the result of that strategy, of focusing on selected markets, high-growth markets, and coupling with that investments in other firms through acquisitions, is one that we've been pursuing and articulating since Day One. And we plan to stick with that strategy.

PC Week: Could you be more specific about a high-growth area?

McGinn: The highest growth areas today remain in optics, in wireless, in software and professional services, plus the silicon that supports the systems. Those areas remain robust, all of those growing in excess of 20 percent per year, despite the enormity of those market segments. And we're going to continue to invest in those areas.