Verizon Takes Convergence to the Enterprise

By eweek  |  Posted 2001-08-06

Verizon Communications enterprise division is flying the flag of convergence, as it moves to double the size of its professional services group and boost offerings, in an attempt to lure more voice and data business away from long-distance rivals and fellow regional Bells.

By fall, the companys enterprise division is expected to roll out more IP-based services for big businesses, including IP services delivered over its older network. Some of the services, such as managed IP private branch exchanges, would cut into its own circuit-switched network business.

"There is definitely some cannibalization of our own services as a result of convergence, but, if you look at the opportunities and the size of the long-haul opportunity, we can potentially get a lot of the business that we dont have today — utilizing convergent technology," said Ed McGuinness, senior vice president of marketing at Verizon Enterprise Solutions Group.

Short term, the plan is to work with customers to upgrade their enterprise networks on both the voice and data fronts. Long term, Verizon wants enterprise long-haul business at the expense of losing some circuit-switched revenue. The company is also working closely with Genuity on developing a voice-over-IP product by the years end.

Verizon is working behind the scenes to beef up its professional services group, a band of consultants who will help about 1,500 of Verizons largest customers integrate and custom-fit new data and voice products into large enterprise networks. This group, dispersed over three Verizon divisions, currently stands at about 100 people. The company will create partnerships with other consulting firms, and will charge hourly rates when the staff is increased.

The relationship with Genuity is critical for Verizons plan to reinvent itself as a global carrier going toe to toe with the likes of Cable & Wireless and WorldCom.

A condition for the merger of GTE and Bell Atlantic, two regional Bells that make up Verizon, was a spin-off of GTE Internetworking, now known as Genuity. The original contractor on the network that served as a foundation of the Internet, Genuity has a long history of providing IP services. Following its divestiture, it relaunched as a provider of high-end managed hosting and enterprise outsourcing services, an offering embodied in a group of products called Black Rocket.

Industry watchers have long credited Genuity with writing the book on where large telcos should go with their IP business services, noting that the companys Black Rocket offerings have been copied by rivals.

Under conditions of the merger, Verizon owns only 10 percent of Genuity now, but can convert that into 80 percent ownership once Verizon is cleared to offer long-distance service to more than 95 percent of lines in former Bell Atlantic territory. Verizon has won approval to offer long-distance in New York and Massachusetts, states that account for 40 percent of all lines in the territory, with applications pending that would boost the total to 55 percent.

Combined, Genuity and Verizon are likely to aggressively court business customers with high-end enterprise outsourcing services.

"As transport becomes more commoditized over time, the fact [that] we have been moving towards more value-added managed e-business solutions aspects of the business is going to stand very well for us," said Joseph Farina, Genuity president and chief operating officer.

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