OpenPlug Buy Deepens Alcatel-Lucent’s Commitment to Application Enablement

I spoke earlier today with representatives of Alcatel-Lucent about the company’s acquisition of OpenPlug and how it fits into a broader application-enablement strategy that bridges developers and service providers.

Laura Merling, vice president of Alcatel-Lucent’s developer platforms and related programs, explained that company’s move into developer tools is part of a long-term strategy that could help redefine the relationship between developers, primarily of the mobile variety, and service providers. In the process, of course, it also could help redefine Alcatel-Lucent relationships with both constituencies, particularly service providers.

The way Alcatel-Lucent sees it, the company is responding to an urgent needs in both camps. For a long time, developers have wanted wireless operators and other carriers to expose more of their network services. Wireless operators, for their part, often have been willing to play along, but they haven’t had the means of doing so. Meanwhile, smartphone vendors, such as Apple and Google, sought to fill the void with device-specific development tools for application creation and monetization.

Sending Strong Signal

With its Open API initiative, its earlier acquisition of ProgrammableWeb, and now its acquisition of OpenPlug, Alcatel-Lucent is sending a strong signal that it is serious about application-enablement. In sending that signal, it’s letting wireless operators know that it’s in their corner as they try to regain some of the developer and subscriber patronage they’ve surrendered to Apple and, increasingly, to Google.

In theory, Alcatel-Lucent’s push to become a valued intermediary between developers and service providers makes sense, but the challenge is daunting. On one side, it must convince developers that it is creating a new broad-based platform that will allow them to address network-layer services and target a wide range of smartphone and feature-phone handsets without having to compromise on application quality. On the other side, it must convince wireless operators and other carriers that it can help them draw the support of developers. It’s a chicken-and-egg dilemma, and it will need support and mutual reinforcement from both parties to have a viable shot at success.

Toward that end, Alcatel-Lucent is working hard to ensure that it precludes potential objections from either side of the aisle. Developers, for instance, can be wary of lowest-common denominator approaches to serving broad-based device demographics. They want to ensure that applications are optimized for the devices on which run and deliver good customer experiences. As such, Alcatel-Lucent takes pains to note that OpenPlug lets developers write once using a single development tool and then compile natively to each operating system.

Indeed, OpenPlug’s ELIPS Studio, which now becomes part of Alcatel Lucent’s developer platform, is a development environment that allows ISVs to create and deploy mobile applications cost-effectively and quickly across iPhone, Android, Symbian, Windows Mobile, Linux, and other systems.

Arrayed Against Apple, Google

Fundamentally, Alcatel-Lucent’s whole application-enablement strategy is intended to put it in league with developers and service providers against the fragmented forces of independent smartphone platforms, such as Apple’s iPhone, Google’s Android, and RIM’s BlackBerry. The smartphone vendors cannot be expected to provide Alcatel-Lucent with any comfort.

Even though the application-enablement initiative is intended to be synergistic with the Alcatel-Lucent’s core business of selling telecommunications equipment, the company is committed to making the the new initiative a going concern in its own right. That will take work and perseverance, but the two acquisitions this year — with perhaps more M&A activity to follow — suggest that the company is in it for the long haul.

It’s good for Alcatel-Lucent to have something like application-enablement in its back pocket as a means of differentiating it from lower-cost telco-equipment vendors such as Huawei and ZTE. It’s also a good insurance policy against margin erosion on the hardware side of the business. On the score, Alcatel-Lucent is taking a “freemium” ad and license-based approach to sales of its application-enablement software to the developer community, and it will sell licenses to wireless operators and other carriers.

Whether Alcatel-Lucent will be successful in its application-enablement capacity remains to be seen, but the company, in making two acquisitions and allocating substantial resources to the effort, does not seem inclined to cut and run.

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