(B) It is always much easier to acquire a company than to successfully integrate it, nurture it and expand it within the acquirer. In most cases after the acquisition, the management or the engineering talents, that were at the origin of the product concepts, left to pursue other opportunities, and over time the products acquired are discontinued. So, it is very rare if a company is expanding the product line of a start-up acquired ten years ago, and even more unique if the same team that was running the start-up before its acquisition is the one at the head of the product expansion ten years later.
But so is the case at Alcatel Lucent who acquired in 2003 Timetra, a Silicon Valley start-up, based in Mountain View, which developed a metro router for network operators to offer VPLS or Layer 2 Ethernet VPNs to their enterprise customers. Timetra Networks was one of the very last service provider networking start-ups, with Vivace Networks that was acquired by Tellabs, to be funded during the Internet bubble of 2000. For a telecommunications equipment vendor such as Alcatel Lucent, IP routing and networking are one of the key areas for future growth with LTE, optical transport and VDSL.
Nearly ten years after the acquisition of Timetra, Alcatel Lucent has just expanded Timetra’s 7750 SR metro routers to core Internet routers with its recent launch of the 7950 XRS competing for head to head with Cisco CRS and Juniper T Series core routers. 70% of the team that started Timetra is still at Alcatel Lucent and the engine in the design of the 7950 XRS. And, the routing product line of Alcatel Lucent generates only $1.6B of the $15.6 B revenues of the company, but 35% of its profits.
So why is the story of Timetra very different from most start-ups acquired? Simply, because there is not much opportunity for the Timetra team at Alcatel Lucent to leave its present company, and to start another company in the Valley. The state of the networking industry has matured as did the PC industry a long time ago. When was the last PC start-up? Same story for networking start-ups targeting the infrastructure of network operators. They have not been “any” for the last ten years.
So if you are in a market where entrepreneurship is not an option anymore, you might still have the opportunity to be an intrapreneur. That is what the team at Timetra did.
For more on Intrapreneurship
Intra-Corporate Entrepreneurship from Gifford and Elizabeth Pinchot
Gifford Pinchot’s blog on Intrapreneurship
Note: the picture above is the Alcatel Lucent 7950 XRS.
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