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INS Takes Lucent Enterprise Business

International Network Services Inc. is the proud owner of Lucent Technologies' enterprise services division, officials announced Wednesday.

The deal, terms of which are unavailable, is expected to close in July and is part of Lucent's ongoing strategy to spin off or sell its non-core businesses to cut down on costs. Last October, the Internet equipment making giant posted a loss of $9 billion, prompting the revamp.

INS is a subsidiary of West Coast Venture Capital, LLC, a private venture capital firm in Cupertino, Calif., and created just prior to the sale.

Earlier this month, Agere Systems officials announced they were now their own company after Lucent released its 58 percent ownership in the company. Agere spun off from Lucent last March in an initial public offering (IPO).

INS takes over where Lucent's enhanced services and sales (ESS) division left off in the world of enterprise consultancy; helping corporations design, implement and buy Lucent equipment to meet their network requirements. The service is one many major telecoms and equipment makers provide, and are an integral part of the sales process.

The caveat to the deal is that now INS is free to recommend equipment from rival equipment manufacturers like Nortel Networks , Cisco Systems Inc. and Alcatel , a freedom that could cut into the Lucent bottom line. Last year, Lucent garnered $4.2 billion in sales through the ESS division.

It's unlikely INS' management will look far outside the Lucent environs for a networking solution, however. David Butze, Lucent's ESS division president, will move to the new INS headquarters in Santa Clara, Calif., as president and chief executive officer.

"Moving on independently makes strategic sense for our employees and our customers, who will benefit from a company solely focused on their complex, enterprise networking needs," Butze said in a statement Wednesday.

Lucent was unavailable for comment on the other 850 employees in the division. The press release said INS will "retain the existing management team," but how many that entails is unknown.