Alcatel-Lucent adjusts cyber security strategy with Thales sale

Defence specialist Thales has confirmed the acquisition of Alcatel-Lucent’s cyber security services and solutions division, as well as its communications security activities. In a strategic partnership, the two organisations claim the expertise of each will provide holistic, secure communications services.

The move indicates a simplification of Alcatel-Lucent’s security strategy. The announcement of intent initially came in May, and supplements the company’s simplification of “The Shift Plan”, which sees its R&D spend focus primarily on IP network and ultra-broadband access. The deal essentially takes security out of Alcatel-Lucent’s hands, affording an increased focussed on broadband access.

At the time of announcing Alcatel-Lucent’s plan to work with Thales, CEO Michel Combes reiterated the vendor’s increased focus on IP specialism, saying: “This strategic partnership with Thales illustrates Alcatel Lucent’s strategy to reposition itself as a specialist in IP networks, cloud technologies and secured ultra-broadband access.”

The Shift Plan was announced in May 2013, at which point Combes targeted streamlining peripheral financial costs, and stated the group’s ambition to boost Core Networking revenue by more than 15% by 2015. The plan also reiterated Alcatel-Lucent’s focus on 4G LTE and fibre access investment, with a reduction in legacy technology R&D expenditure.

“The Shift Plan is fundamentally an industrial plan that also addresses the group’s operational and financial challenges by putting in place a strong and fully accountable leadership team with clear goals and the appropriate levers to deliver on these goals and on our commitments to all stakeholders,” Combes said. “Over the next three years we are targeting €1bn of fixed costs savings, and carefully defined and timed asset sales are expected to generate at least an additional €1bn.”

Evidently, the communications services team is one of the aforementioned asset sales. However, in November 2013, Alcatel-Lucent announced its foray into the cyber security market in a partnership with security specialist with Arbor Networks, delivering DDoS (distributed denial of service) protection to Luxembourg operator Telindus Telecom.

A move away from security services so soon perhaps indicates a level of indecision at Alcatel-Lucent about the potential financial benefit presented by the cyber security sector.  Neither Alcatel-Lucent nor Thales confirmed the value of the acquisition.