MANUFACTURING

Verizon Business during the second quarter continued to roll out high-performance global solutions that enable multinational enterprises, medium businesses and governments to take advantage of cloud-based delivery of key IT resources and applications.  These include new cloud-based computing, data storage, security, enterprise mobility and unified communications offers, as well as key industry-specific solutions and IT consulting services.

The company continued to aggressively invest in the network and technology infrastructure to deliver cloud solutions to its global customer base, including opening a second data center in Hong Kong and significantly expanding the capacity of its other data centers.  

Customers responded to these moves, with the company signing significant business in all segments during the quarter.  Multinational corporations including CA Technologies, First Data Corporation, Hewitt Associates and RENT-A-CENTER completed new agreements, expanding their relationships with Verizon Business for a wide range of advanced communications and information technology solutions.  Additionally, Verizon entered into new agreements with several government agencies, including the U.S. Department of Health and Human Services.

"There's a lot of hype around 'cloud,' but in essence it's a new IT delivery model – one that is having a profound impact on the industry," said Kerry Bailey, Verizon Business senior vice president for enterprise strategy and chief marketing officer.  "Our unique combination of network, data centers and integrated solutions -- all with built-in security -- is truly enabling the enterprise cloud, and our customers are responding."

New High-Performance Solutions Support Cloud Drive

Verizon Business delivered new capabilities supporting the convergence of IP and IT during the quarter including:

• A new global cloud-based offering, Verizon Cloud Storage, and a complementary suite of data-retention IT consulting services that delivers a flexible solution for managing and retrieving data over the Internet on a pay-as-you-go basis.

• A new cloud-based on-demand identity and access management service powered by Novell technology that will make it easy and cost-effective for enterprise clients to outsource the infrastructure and expertise required to securely extend and manage user access to cloud-based resources while maintaining control over policies and governance.

• Delivery of Cisco unified communications and collaboration applications in the cloud "as-a-service."  The company is conducting field trials of the new Cisco Hosted Collaboration Solution, enabling participants to see how cloud-based unified communications and collaboration capabilities can be quickly and cost-effectively used by multiple employees across an enterprise. 

• A new cloud-based managed security-as-a-service portfolio that offers enterprises the ability to quickly and easily add robust security services and avoid purchasing expensive equipment.  The service enables customers to quickly and easily secure new locations with the latest security technology by using a centralized management console that allows for real-time provisioning and administration.

• An innovative, cloud-based Enterprise Mobility as a Service offering that enables on-the-go workers to quickly and securely access their corporate networks, while making it easier for IT managers to manage a global mobile workforce.  The new offering uses advanced software and an intuitive user interface to enable employee laptops and netbooks to detect and connect to the best network service at a given time and place.  

• Enhancements to Verizon's on-demand, global cloud computing solution -- Verizon Computing as a Service -- that provide business customers with better control and flexibility over their computing environments.  New features include: server cloning, support for the SUSE Linux operating system, and expanded and streamlined networking options.

Harnessing the Power of Advanced Technology and IT Expertise

In addition to cloud services, Verizon Business continued to introduce technology enhancements and professional consulting services to help enterprise customers tailor solutions to meet their specific business objectives.  These include:

• New IT security consulting services -- Verizon Physical Security Services -- that proactively integrate physical security with information security and compliance programs.  The new offering combines a physical security assessment and penetration testing, security awareness training and an evaluation of relevant logical security technologies such as smart cards and biometric scanners to evaluate and strengthen an organization's overall security posture.

• New managed wide area network performance capabilities offered with Riverbed Technology that enable businesses around the world to more effectively share video, Web and other key business applications across multiple locations; and new professional consulting services that help companies tailor application acceleration solutions to help boost their business performance.

• A set of consulting services designed to help enterprise customers around the globe plan and implement effective strategies for building, consolidating and outsourcing data centers.  

• New IP capabilities to support the adoption of unified communications and collaboration, including: IP Audio Conferencing for conducting instant meetings; VoIP IP Enterprise Routing (VIPER), which eliminates per-minute calling charges when calls are made between VIPER customers; and centralized multi-site designs for Verizon Hosted IP Centrex customers in Europe to aggregate calls through a central hub location connected to Verizon's expansive global IP network.

• A new Global Fixed Mobile Convergence service that can significantly reduce mobile phone roaming charges for European workers who make and receive calls outside of their home service area.  The service also offers a universal phone number with "find me/follow me" capabilities to immediately reach employees on a wireline or mobile phone.

• A new, comprehensive security assessment and certification program for medium-sized businesses.  Verizon's Security Management Program proactively protects businesses from security threats by leveraging a set of best practices to evaluate a company's security posture. It recommends ways to cost-effectively improve security and ease compliance with industry regulations.

Expanded Focus on Vertical Industries

Verizon continued its increasing focus on key vertical markets during the quarter, including the rollout of new capabilities that include:

• Extension of the Verizon Financial Services Network – the company's dedicated trading-business infrastructure – to customers in Europe.  VFSN is a scalable, secure, low-latency solution that is designed to facilitate trading and information exchange in global capital markets.

• A suite of Data Discovery, Identification and Security Classification consulting services designed to help health care providers securely share electronic patient information.  DDISC discovers, identifies and classifies sensitive personal health information – such as physician notes, x-rays, and insurance and payment information – to determine whether it is being appropriately handled, secured and shared electronically.

Network Leadership and Global Expansion

Verizon Business continues to invest in its leading global network, which underpins the essential network computing platform for the company's integrated solutions. Network developments during the quarter included:

• Adding a second data center in Hong Kong, which will enhance the company's cloud and data center services in the region and provide direct access to its global network.  The company also significantly expanded capacity at its other global data centers.

• Installing 18 additional Private IP edge routers for a total of 781 edge routers in 221 sites throughout 60 countries.  This included six new cities -- Winnipeg, Canada; Glasgow, Scotland; Krakow, Poland; Rome, Italy; San Jose, Costa Rica; Abu Dhabi, United Arab Emirates.  Private IP now reaches 130 countries with the addition of Costa Rica.

• Adding four new converged packet architecture switches in Tel Aviv, Israel; Rotterdam, Netherlands; Winnipeg, Canada; and San Jose, Costa Rica. This brings the total number of CPA switches to 146 in 129 sites across 35 countries.

• Completing a field trial carrying 100 gigabit-per-second Ethernet traffic on a metropolitan Ethernet infrastructure. Using Alcatel-Lucent equipment deployed in Verizon's Switched Ethernet Services network, the trial successfully transmitted data over 12.7 kilometers (7.9 miles) of field fiber in the company's Dallas-area network.

Verizon Business Industry Recognition

During the quarter, Verizon Business' global capabilities received more than 15 awards and citations from industry experts.  These awards and citations include:

• IDC named Verizon Business a leading provider of communications services for multinational corporations, citing the strength of the company's solutions and security portfolio.   In its "IDC MarketScape: Worldwide MNC Telecommunications Services 2010 Vendor Analysis, Doc #222429, March 2010" IDC notes that Verizon's "leadership positioning results from numerous distinctions, such as a well-developed services portfolio that includes a range of complementary offerings.  Key among them are its capabilities in the security services space, where the carrier truly differentiates itself from competitors."

• IDC also recognized Verizon Business as a leader in the rapidly growing telephony-based hosted unified communications (UC) market. Verizon was one of the seven providers IDC examined for its new MarketScape report, "IDC MarketScape: U.S. Telephony-Based Hosted Unified Communications, 2010 Vendor Analysis, Doc #222897, May 2010."

• Forrester Research found Verizon Business to be a top provider in the global delivery of managed security services.  In a recent report ("Market Overview: Managed Security Services," Forrester Research., March 2010), it describes 24 global managed security services (MSS), citing Verizon Business as a "market leader in customer satisfaction and innovation" with "a balanced set of offerings focused on customer needs augmented with an experienced, competent staff and good execution."

• Forrester also recognized Verizon Business as a leader in the European wide-area-network services market in a recent report ("The Forrester Wave: European WAN Services, Q2 2010," Forrester Research, April 2010).  

• Frost & Sullivan for the fourth consecutive year recognized Verizon Business with the analyst firm's North American Market Leadership Award for Hosted Contact Center Services ("Market Share Leadership, Hosted Contact Centers").  

• Frost & Sullivan also awarded Verizon Business the 2010 North American Award for Market Penetration Leadership in managed security services, citing the company's growth, product portfolio and product strategy.

• Frost & Sullivan additionally recognized the Verizon Enterprise Center, the company's online customer portal for large and medium-size businesses, with the 2010 North American Customer Service Leadership Award for Enterprise Self-Service Portals.  In a research report ("Customer Service Leadership, Enterprise Self-Service Portals"), the analyst firm highlighted accessibility features of the VEC that make it ideally suited for a broad customer base.

• Gartner and RIS News named Verizon Business a top 10 IT consulting provider for retailers, in a jointly conducted study ("20th Annual RIS/Gartner Retail Technology Study").

• Ovum gave Verizon the leading spot on Ovum's list of top hosted contact center services providers in a new research report ("Decision Matrix: selecting a hosted contact center service in the US"), citing the company's technology strength and leading market position.  

• SC Magazine named Verizon Business as Managed Security Services Provider of the Year, recognizing the company's leadership and innovation within the security market.  The award cited Verizon Business' high levels of customer service, breadth of managed security solutions and industry leadership.

• Billing & OSS World magazine awarded Verizon Business with the Best Business Process Automation Excellence Award for the company's innovative customer self-service portal and billing practices.  Verizon Business won the award for the leading self-service capabilities demonstrated by the Verizon Enterprise Center customer portal.

• Juniper Networks named Verizon Business as Juniper's 2009 Top Partner of the Year for the Americas, recognizing the company's continued success in delivering advanced IT solutions based on Juniper's high-performance technology platforms, as well as the company's commitment to customer-service excellence and revenue growth.

• Cisco recognized Verizon Business' close collaboration and continued success as a Cisco channel partner with two key awards for services sold in the U.S. and Canada – the Cisco 2009 Service Provider Partner of the Year and the Cisco 2009 Managed Service Provider Partner of the Year.

• SAP AG certified the company's cloud-based on-demand computing as a service platform for the delivery of SAP business applications. Verizon Business is the first global provider to receive SAP certification of its cloud services.

• Verizon Business also successfully completed the annual SAS 70 Type II examinations of its global data centers, which support the company's colocation, managed hosting and application management services.  The company also successfully completed the first annual SAS 70 Type II examination of controls for its CaaS data centers.