BASKING RIDGE, N.J. - Verizon Business during second-quarter 2008 continued to successfully execute its global strategy of partnering with large-business and government customers to help them do business better and more securely.
The company generated total second-quarter revenues of $5.3 billion, or growth of 0.9 percent compared with last year's second quarter. This is Verizon Business' seventh consecutive quarter of year-over-year pro-forma revenue growth (non-GAAP, calculated as if Verizon and MCI had merged on Jan 1, 2005 and excluding the revenues of the wireline segment's non-strategic local exchange and related business assets in Maine, New Hampshire and Vermont, spun off on March 31, 2008). Global enterprise revenue, representing retail sales, increased 1.7 percent to $4.0 billion, compared with the year-ago quarter.
Sales of strategic services - such as IP (Internet protocol) and managed services, including security, as well as Ethernet and optical services - continued to fuel growth. These services generated nearly $1.5 billion in revenue, up 18.7 percent from second-quarter 2007.
"We continue to see very strong demand for the technologies and services that are fueling the ongoing global IP transformation," said John Killian, president of Verizon Business. "Our combination of capabilities and expertise in providing multinationals with integrated IP and IT solutions is unmatched, and these results show that our customers are getting the message."
Capabilities, Reach Expanded During Quarter
Verizon Business continued during the quarter to introduce new capabilities that support its integrated global solutions strategy.
Moving strategically to address the growing demand from large corporations for high-tech services geared to improving business performance, Verizon Business announced that it is delivering a standardized set of more than 50 professional-service capabilities in 30 countries around the globe. The services - delivered through 2,700 specially trained and experienced consultants - are focused on five key practice areas: Security Services, IT Services, Network Integration and Engineering, IP Communications, and Contact Center Services.
The company also unveiled significant enhancements to its suite of unified communications (UC) offerings that help multinational companies to collaborate better and improve their business processes, while cutting travel costs. These enhancements included expansion of the company's voice-over-IP (VoIP) portfolio to four additional European countries; international expansion of the company's Integrated Communications Package (ICP) UC offering; integration of ICP with Verizon Conferencing; and deployment of the newest Microsoft Office Live Meeting platform for Verizon Net Conferencing. Additionally, the company rolled out a new software-based version of its PBX Mobile Extension offering that transfers the capabilities of an office phone to a mobile device.
Managed security services also continued to be a key area of focus during the quarter. Verizon Business announced significant enhancements to its Security Management Program, security monitoring and management services for Fortinet's FortiGate unified threat management platform, and additional managed security services aimed at preventing data breaches.
Underscoring the company's leadership in the global security services marketplace, Verizon Business released a first-of-its-kind report spanning four years and more than 500 forensic investigations. The "2008 Data Breach Investigations Report," conducted by Verizon Business Security Solutions investigative experts, found that nearly nine in 10 corporate data breaches could have been prevented had reasonable security measures been in place.
The company also provided additional options for extending Ethernet local area networks (LANs) to new locations, announcing enhanced optical capabilities that enable customers with campus environments to connect directly to associated sites easily and cost effectively with the ease and resiliency of synchronous optical network (SONET) technology.
Verizon Business also continued its efforts to make it even easier to do business with the company by unveiling the Verizon Enterprise Center, a single online customer portal where customers can view and manage all their wired and wireless communications.
Network Leadership and Global Expansion
Verizon Business continued to both enhance its global IP network, which serves as the critical platform for the company's secure communications and IT solutions, and expand its reach into high-growth, global markets.
Global network enhancements included:
- Joining the Europe India Gateway submarine cable consortium, which will build a 9,000-mile high-speed submarine cable network from the United Kingdom to India.
- Turning up 1,940 route-miles of Ultra Long Haul network in Europe - connecting London, Amsterdam, Frankfurt, Paris and Brussels - and turning up 804 additional route-miles in the U.S.
- Deploying new multiplexer technology in nine additional U.S. markets, enabling remote configuration and provisioning of bandwidth.
- Installing additional MPLS-based (multiprotocol label switching) switches in 22 additional global business centers.
The company also unveiled plans to open an office in Dubai to further strengthen its Middle East operations, and it received approval to directly deliver advanced communications services in Mexico.
Additionally, Verizon Business announced an alliance with Swisscom, Switzerland's leading telecommunications provider, which will enable enhanced global service and support capabilities for Swiss multinational companies and companies with operations in the Swiss market. Bühler, the global technology partner for the food, chemical processing and die casting industries, became the first customer for the new strategic alliance. Verizon Business and Swisscom will be the single source of all Bühler's global communications services. The company will use Verizon Business' global IP network for its global communications, seamlessly integrated with Swisscom's national network.
Verizon Business Industry Recognition
Industry experts and partners alike recognized the depth and breadth of Verizon Business' global capabilities during the quarter. The recognition included:
- Analyst firm Gartner Inc. placed Verizon Business in the Leaders Quadrant in two reports: "Magic Quadrant for Managed and Professional Network Service Providers, North America, 2008" and "Magic Quadrant for U.S. Network Service Providers, 1H08," evaluating Verizon Business' completeness of vision and abilities to execute in these areas.¹
- Forrester Research recognized the company as a leading provider of European wide-area-network (WAN) services in an April 2008 report, "Forrester WaveTM: European WAN Services, Q2 2008."²
- Nemertes Research bestowed a number of its PilotHouse awards on Verizon Business during the quarter - including seven of eight awards in its Ethernet category and an MPLS award for Private IP Performance Monitoring and Reporting.
- Several partners honored Verizon Business during the quarter. Recognition included the 2007 Nortel Partner Advantage Innovation Award, a Cisco 2007 Partner Provider of the Year award and the Juniper Networks 2007 Americas Managed Services J-Partner of the Year Award.
- For the third consecutive year, the Metro Ethernet Forum named Verizon Business Carrier Ethernet Service Provider of the Year, Best in Business, North America.
- BSI Management Systems recognized Verizon Business as a leading provider of business continuity management services.
New Business Momentum Continues
Verizon Business continued to both solidify and extend its relationships with existing large businesses and government agencies around the world while adding new business.
Multinational corporations including Liz Claiborne Inc., Milliman Inc., Parsons Brinckerhoff, Standard Register and Western Union completed new agreements during the quarter for a wide range of advanced communications, IT and professional services.
Verizon Business also signed new contracts with several U.S. government agencies, including a 10-year, $678.5 million agreement under the Networx Universal program to deploy and manage a global IP network for the U.S. Department of Homeland Security.
Specific customer applications included:
- Liz Claiborne Inc., a leading fashion brand and retailer, selected Verizon Business to connect its operations in 25 countries globally. Verizon Business has begun deployment of a fully managed Verizon Private IP solution to support the company's global communications needs, enabling it to enhance network management and achieve significant global cost efficiencies.
- Milliman Inc., a global consulting organization, completed a new agreement for Managed Private IP to connect its business locations worldwide. Milliman will use Private IP as its platform for global communications and collaboration, including telepresence.
- Parsons Brinckerhoff, a global infrastructure consulting, engineering and construction management organization, completed an agreement during the quarter for Private IP, managed network and security services, and customer premises equipment.
- Standard Register, a leading document services provider, is deploying Managed IP PBX to increase collaboration and improve communications. The resulting unified communications (UC) infrastructure will integrate various networks, systems, media, devices and applications.
- Western Union, a leading provider of global money-transfer services, signed a contract with Verizon Business for enhanced call routing, a
network-based Interactive Voice Response (IVR) service that provides automated-attendant treatment and routing for inbound calls.
About the Magic Quadrant
The Magic Quadrants are copyrighted 2008 by Gartner, Inc. and are reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
About Verizon Business
Verizon Business, a unit of Verizon Communications (NYSE: VZ), operates the world's most connected public IP network and uses its industry-leading global-network capabilities to offer large-business and government customers an unmatched combination of security, reliability and speed. The company integrates advanced IP communications and information technology (IT) products and services to deliver leading enterprise solutions including managed services, security, mobility, collaboration and professional services. These solutions power innovation and enable the company's customers to do business better. For more information, visit www.verizonbusiness.com.
* See www.verizon.com/investor for reconciliations to generally accepted accounting principles (GAAP) for the non-GAAP financial measures included in this announcement.
¹ Gartner Research "Magic Quadrant for Managed and Professional Network Service Providers, North America," May 14, 2008. Authors Eric Goodness, Christine Tenneson, Ted Chamberlin, Daniel O'Connell; ID Number: G00155721.
² Gartner Research "Magic Quadrant for U.S. Network Service Providers, 1H08," April 2, 2008. Authors Ted Chamberlin, Robert F. Mason, Jay E. Pultz; ID Number: G00155890.