During the second quarter, Verizon Business rolled out significant product enhancements and professional consulting services that enable globally extended enterprises to better perform in these challenging times. The company also continued to enhance its leading global IP network, which serves as the essential platform for integrated, secure global IT and communications solutions.
During the quarter, sales of strategic business services - such as IP, managed services, Ethernet, security solutions and expert professional services - generated $1.5 billion in revenue, up 3 percent from the second quarter 2008.
"The current global economy has its challenges, but there are also opportunities aplenty and no one is better positioned to help businesses harness technology to their advantage than we are," said Fran Shammo, president of Verizon Business. "We're seeing continued strong global demand for our integrated solutions and professional services, and we continue to transform our business to give customers the higher-value services they are seeking to advance their businesses."
New Capabilities Supporting Global Solutions
Verizon Business is a global leader in providing communications, IT, information security and network solutions. The company rolled out significant solutions enhancements and professional consulting services during the quarter, further strengthening its integrated secure offerings for globally extended enterprises.
New communications solutions capabilities introduced during the quarter included:
- New integrated service packages designed specifically for the mid-market that combine Verizon Business' advanced wireline and wireless voice and data capabilities with security and network management.
- Expansion of the company's Burstable Enterprise Shared Trunks (BEST) capability so that Hosted IP Centrex customers can use idle VoIP capacity in one location to accommodate an increase in traffic from another location.
- The addition of features that enable Hosted IP Centrex customers to make the virtual office a reality for remote workers. These features include the ability to have calls made from an IP-based softphone appear to originate from the user's business line, as well as the means to easily register a physical location for E-911 purposes and provision local business numbers for teleworkers.
- Enhancements to the Verizon Enterprise Center customer portal that enable Verizon customers to receive and access information regarding their communications services in near-real time on a mobile device.
- A voice-only version of the company's Web Center customer contact solution that offers "cloud-based" capabilities to expand customer communications without large capital investments.
New IT solutions capabilities included:
- A new on-demand, "cloud-based" Computing as a Service (CaaS) solution designed to meet the stringent security and performance requirements of enterprise customers. The new service, which leverages Verizon's world-class global IP infrastructure and data centers, enables mid-market and larger companies to use a Web-based portal to employ computing resources in the quantities and duration dictated by their business needs.
- New professional consulting services aimed at helping global enterprises optimize application performance and secure corporate data storage.
- An expanded suite of managed services that overcome the limitations of traditional remote data-protection services by performing automatic data backup and restore functions for servers and PCs without overburdening corporate networks.
- A new suite of "asset assurance" fault-management and monitoring tools and reporting capabilities that provides a cost-effective solution for global network device management.
New security solutions capabilities included:
- An enhanced Internet Security Assessment service that provides expert analysis of potentially harmful traffic that could undermine the network connecting an extended enterprise.
- New managed security capabilities for Verizon Secure Gateway-Firewall aimed at protecting customer networks from harmful traffic as enterprises move data, voice and video traffic between public and private networks.
- Enhancements to the Verizon Security Management Program that include an online Compliance ScoreCard that enables businesses to compare their security activities with those of industry peers.
New networking solutions capabilities included:
- An innovative new dynamic bandwidth solution that enables the company's Ethernet Virtual Private Line customers to adjust their bandwidth requirements on an as-needed basis so they can even better leverage the low cost and simplicity of Ethernet with the added flexibility of self-provisioned network capacity.
- Expansion of Verizon Business' Enterprise Mobility services to India, making it even simpler for multinational customers with local operations to manage their remote access costs.
Additionally during the quarter, the company released its "2009 Verizon Business Data Breach Investigations Report" (DBIR), which revealed that corporations fell victim to some of the largest cybercrimes ever during 2008, fueled by a targeting of the financial services industry and a strong involvement of organized crime. This second annual study was based on data analyzed from Verizon Business' actual 2008 caseload of 90 confirmed breaches involving 285 million compromised records, more than the previous four years combined. The report also found that nearly nine out of 10 breaches were considered avoidable if security basics had been followed.
Network Leadership and Global Expansion
Verizon Business has invested more than $3 billion since 2006 in its leading global network. Network developments announced during the quarter include:
- Extension of Verizon Business' Internet Dedicated Access and Internet Dedicated Ethernet services to Malaysia. The services, which enhance access options to Verizon Business' global IP network, were made possible through a new Malaysian Internet protocol (IP) node, jointly established with Telekom Malaysia (TM).
- Rollout of Verizon Business' new Emergency Response Mobile Communications Service (ERMCS). Highly trained Verizon Business experts using specially equipped vehicles are able to reestablish communications throughout North America during unplanned disruptions resulting from natural or human-caused events. The new service also offers professional security and business continuity planning and training.
- Installation of 26 Private IP edge switches for a total of 705 edge switches in 163 major markets across 59 countries.
- Completion of 1,488 miles of ultra-long-haul network in Europe.
- Expansion of its global mesh networks. The International Mesh Network was expanded by three additional nodes during the quarter, while U.S. Domestic Mesh added six new nodes.
- Having suppliers begin laying cable for the 15,000-kilometer (9,000-mile) Europe India Gateway submarine cable and completion of the U.K. and Djibouti cable landings.
Verizon Business Industry Recognition
Industry experts continued to recognize the depth and breadth of Verizon Business' global capabilities during the quarter. This recognition included:
- J.D. Power and Associates ranked Verizon Business "Highest in Customer Satisfaction with Large Enterprise Data Services Providers" in its 2009 Major Provider Business Telecommunications Study - Data ServicesSM .
- Frost & Sullivan gave Verizon Business its 2009 North American Enterprise Telephony Equipment Implementation and Management Customer Value Enhancement Award and its 2009 North American Managed Security Service Providers (MSSP) Market Penetration Leadership Award.
- Gartner Inc. placed Verizon Business in the Leaders Quadrant in two reports -- "Magic Quadrant for Asia-Pacific Network Service Providers"¹ and "Magic Quadrant for Managed Security Service Providers (MSSPs) North America."²
- SearchEnterpriseWAN.com awarded Verizon Business' Managed WAN Optimization Services a 2009 Product Leadership Award. Verizon Business received a Bronze Award in the Product Leadership Awards' WAN optimization/application-delivery category.
- Global Telecoms Business magazine gave Verizon and network infrastructure supplier Tellabs its prestigious Innovation Award for their efforts in developing Verizon's domestic Dynamic Optical Network.
- Juniper Networks awarded Verizon Business its 2008 Top J-Partner of the Year Award.
- Cisco gave Verizon Business its Multinational Certification for the Asia-Pacific region, having met the equipment maker's rigorous standards for networking competency, service, support and customer satisfaction.
During the quarter, Verizon Business also demonstrated excellence in service delivery. The company completed its annual SAS 70 Type II examination for the company's data centers in Sydney, Melbourne, Singapore and Hong Kong. This certification closely follows the certifications achieved by Verizon Business' IP Application Hosting Centers (Smart Centers) in Germany, Japan, the U.S. and the U.K., and its 15 Premium Internet Data Centers in North America.
New Business Momentum Continues
Despite a challenging global economic environment Verizon Business continued to expand relationships with existing large-business and government agency customers while adding new business. The company completed agreements during the quarter with multinational corporations, major regional players and government agencies for a wide range of advanced communications and IT solutions.
Specific customer applications include:
- Det Norske Veritas AS (DNV) - a Norway-based global provider of risk management services since 1867 -- has 9,000 employees across more than 300 offices in 100 countries. Maintaining ongoing effective employee collaboration and the secure transfer of sensitive information across many different time zones is critical to its global business success. By selecting Verizon Business for the company's managed communications network, dedicated Internet access and additional security requirements, DNV has equipped itself with a stable, reliable and secure communications backbone that can help the company realize immediate business benefits and serve as a platform for future expansion into new markets.
- Verizon Business is working with Siemens Enterprise Communications to address the time-consuming and costly challenges of implementing voice network services across Europe, as the company transitions to its OpenScape Unified Communications (UC) environment. Siemens Enterprise Communications, a premier provider of standards-based business communications solutions, selected Verizon IP Trunking because it provides the flexibility to implement OpenScape UC in the company's data center located at its headquarters in Germany and then extend those UC services - including enhanced UC features and benefits such as audio conferencing, presence and improved collaboration - to the company's additional operational sites across multiple countries. Because Verizon IP Trunking does not require additional IP-Gateways at each site, Siemens Enterprise Communications can leverage the benefits of OpenScape UC without any additional network investment, further simplifying its communication infrastructure. This new contract builds upon the successful implementation of Verizon IP Trunking across the North American operations of Siemens Enterprise Communications.
- The Bank of New York Mellon signed a contract with Verizon Business for customer premises equipment solutions that will offer the asset management and securities services company greater reliability for information storage, access and recovery.
- The U.S. Department of Health and Human Services selected Verizon Business to provide a comprehensive set of voice, data, collaboration and professional services under a U.S. General Services Administration Washington Interagency Telecommunications System (WITS 3) contract worth as much as $245 million.
- U.S. General Services Administration selected Verizon Business to provide Managed Trusted Internet Protocol Services (MTIPS) under the federal Networx Universal program. Under the MTIPS program, Verizon Business will help federal agencies streamline and secure their various Internet connections.
About the Frost & Sullivan Market Penetration Leadership Award
The Market Penetration Leadership Award is presented each year to the company that has demonstrated excellence in capturing market share within their industry. The recipient has demonstrated strategic excellence in product innovation, marketing and sales strategies that have resulted in the largest gain in market share over the past two to three years. The recipient of this Award has excelled based on one or more of the following criteria: competitive pricing strategies (perceived customers value versus price); strong salesforce strategy; ability to establish brand awareness through promotional activities; strategic alliances that expand customer base; and product innovation satisfying unmet needs, creating new needs and developing new technologies.
About Frost & Sullivan Customer Value Enhancement Award
The Customer Value Enhancement Award is presented each year to the company that has best demonstrated the ability to expand its customer base, while maintaining its existing customer base, with more innovative value creation and enhancement strategies than competing vendors. This award recognizes the company's successful sales entry, customer acquisition and service strategies, and the degree to which those strategies have met customers' stated needs and requirements. Such strategies are expected to significantly improve customer interaction and contribute to customer satisfaction.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.
About the Magic Quadrant
The Magic Quadrants are copyrighted 2009 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, expressed 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), is a global leader in communications and IT solutions. We combine professional expertise with the world's most connected IP network to deliver award-winning communications, IT, information security and network solutions. We securely connect today's extended enterprises of widespread and mobile customers, partners, suppliers and employees - enabling them to increase productivity and efficiency and help preserve the environment. Many of the world's largest businesses and governments - including 96 percent of the Fortune 1000 and thousands of government agencies and educational institutions - rely on our professional and managed services and network technologies to accelerate their business. Find out more at www.verizonbusiness.com.
¹ Gartner Research "Magic Quadrant for Asia Pacific Network Service Providers," April 24, 2009, author To Chee-Eng.
² Gartner Research: “Magic Quadrant for MSSPs, North America,” Kelly M. Kavanagh and John Pescatore, April 16, 2009.