A natural move beyond the network

The spark of inspiration that lit up executives atVerizon Business occurred about 18 months ago,company officials said. That'swhen they realized theircommercial-sector communications solutionswere ripe for adoption by a federal marketplaceseeking solutions on a constrained budget."I guess you could say it was our 'aha!'moment," said Paul Bates, vice president ofglobal professional services and enterprisesolutions at Verizon Business, a unit of VerizonCommunications Inc. "We had a lot of verysophisticated tools on the commercial side," hesaid. "We just thought ... it was a natural evolutionto take them into the government space."Not that the giant telecommunications companywas faring poorly. Verizon Business reported$21.2 billion in revenue in 2007 and was"growing at about 18 percent a year in theprofessional-services world," Bates said. VerizonBusiness' federal sector had $1.3 billion in primegovernment contracting revenue in 2007. Thecompany ranks No. 18 on WashingtonTechnology's Top 100.Verizon Business recently won a major portionof the Homeland Security Department's$970 million OneNet award under the GeneralServices Administration's Networx contractvehicle. As the prime contractor, Bates said,Verizon will earn $678 million by building operatingcenters for network and security operationsand a video, voice and data network knownas a multiprotocol layer system.Bates said he is looking forward to the 18 to20 task-order opportunities that are expected tobe awarded soon under Networx. Agenciesknow they have until the end of the year to transitionto Networx, he added, and he predicted aflurry of activity before then. In addition, thecompany has gained nearly $55 million in taskorders in six months from the Army'sInfrastructure Modernization contract.With an eye toward the lucrative Networxcontract, Verizon built its GovernmentNetwork Operations and Security Center inAshburn, Va., which includes network monitoring,emergency command facilities and abriefing area. Verizon also has established aVery High Speed Backbone Network Serviceto help the government switch over to next-generationIPv6.Coincidentally, Verizon Business is increasingits professional-services offerings with theaddition of 2,700 specially trained consultantsin five key practice areas: security services, information technology services, network integrationand engineering, IP communications,and contact center services.Government agencies are learning that theyhave the same needs and concerns as manylarge commercial customers, Bates said. Theyare also realizing they can go outside the normalworld of large government contractors tobuy communications solutions. Agencies arenow letting Verizon Business use the capabilitiesit has already developed for the commercialside in the federal space, he said.Bates said Verizon Business' methodology isto tell government clients, "Give us what youhave, we'll take it over as is. We'll give you atransformation plan, and then we'll deliver whatwe would call a new and enhanced version." It'sa sales pitch that is not falling on deaf ears, headded. "What we're showing the federal space isthat we're not just a network provider."The marketing plan also aims to correct themisconception some government agencies havethat telecommunications providers don't havethe capabilities needed to win prime governmentcontracts. The company is pushing somespecialized services, including IP convergence,service-oriented architecture, denial of serviceand security operations centers, Bates said.In increasing instances, agencies that oncewent to the large systems integrators for suchservices are now "very much looking at us toprovide them," he added.Verizon Business' stand-alone network operationscenters ? which Bates called NOCs in abox ? are an example of a commercial productthat can be reconfigured to meet governmentneeds, he said. Also, its commercial optical networksmeet the government's growing desire topurchase environmentally friendly productsthat also reduce costs. Fiber networks significantlylower operating and maintenance costs,he said, including savings on electricity of asmuch as 70 percent.Verizon has also been working on expandingthe federal definition ofpast performance by includingcommercial past performanceas a determiningfactor on contract awards,Bates said.The company's efforts toexpand beyond the commercialsector have not goneunnoticed. Research firmGartner Inc. recently namedVerizon Business to its top-ratedgroup of professionalnetwork service providers.Since its creation inJanuary 2006 with the acquisitionof MCI, VerizonBusiness has taken advantageof inherited expertise, saidAlex Winogradoff, researchvice president at Gartner."MCI had significant businesswith the federal governmentin many, many departments."He said it makes sense forVerizon Business to seekmore federal work because"once they get a contract, it'sa steady business."Winogradoff said earliergovernment telecom contractsbasically called for providingbandwidth, point-topointcircuits. Federal agencieswent to third parties,many of them systems integratorssuch as EDS Corp., Computer SciencesCorp. and IBM Corp., for their professionalservices needs.Now, with Networx, "this is the first time thetelcos are able to participate in those kinds ofcontracts as well," he said. So it makes goodbusiness sense to offer professional services.To meets its expected growth in the federalmarketplace, Verizon Business is expanding itscadre of 400 federal program managers, 65percent of whom are licensedas program managementprofessionals. All of them willwork directly with governmentcustomers, said EdHill, director of operations atVerizon Business' FederalNetwork Systems.Winogradoff said it makesgood economic and managementsense to have a pool ofprogram management professionalswho can work withgovernment and commercialclients. "At the end of the day,it is the same knowledgebase," he said, even if agencieshave different requirements.For example, security concernsare a critical element inmost government projectsand vary from agency toagency, Hill said. "When webuild a network now, thereare as many as six to sevenlayers of security ? or barriers? that are established."So Verizon's managers haveappropriate security clearancesto meet customerrequirements.Verizon's security offeringsmight be its best advertisementas a prime contractor."As security has become moreimportant and the professionalservices that we candeliver become more important,"Bates said, "the government as well ascommercial folks are seeing us as really a primecontractor, not as a sub."