Verizon's cloud play fuels government growth strategy

Verizon Communications Inc. is preparing to ride a government wave to cloud computing. “I think we will see every federal agency this year do something with a cloud opportunity, and our sights will be targeted right at those,” said Susan Zeleniak, group president of Verizon Federal.

Verizon enhanced significantly its cloud capabilities with the recent $1.4 billion acquisition of Terremark Worldwide Inc., a provider of managed IT services and cloud services. Verizon officials said the acquisition would strengthen its commercial and federal business by adding Terremark’s portfolio of cloud solutions, business and government customers, and network of global data centers. “This is one acquisition where our federal clients called us to find out what was going on because they are very familiar with Terremark and could see the value of Verizon and Terremark being together,” Zeleniak said.

Verizon is offering federal customers a variety of contract vehicles for cloud services. The company won a blanket purchasing agreement last year from the General Services Administration for cloud services, and it is also putting those services on the GSA schedule, Washington Interagency Telecommunications System 3 contract and other vehicles. Zeleniak said Verizon is actively discussing initiatives with at least eight major federal agencies for migrating a broad range of applications and services to the cloud.

Growing its cloud business will be key to helping Verizon maintain its status as one of government’s top providers of telecommunications, IT and professional services. The New York-based telecommunications company is ranked No. 18 on Washington Technology’s 2011 Top 100 list with $1.8 billion in prime contracts.

The company also expects to continue winning large awards through GSA’s Networx governmentwide acquisition contract for telecommunications services. Among Verizon’s large Networx awards during the past year were:

• A $187 million contract with the Health and Human Services Department to provide an integrated customer contact solution to route 1 million customer calls each week.
• A $169 million contract to manage and secure HHS’ IP and data networks, including a virtual private network and an array of security capabilities, such as managed firewalls and intrusion detection.
• A contract to manage and secure all aspects of the Army Reserve Command’s IP network in the continental United States.
• Contracts, not yet publicly announced, to provide private IP networks for the Defense Department and National Oceanic and Atmospheric Administration.

Zeleniak said she expects agencies to increase their demand for mobile services through Networx and other contract vehicles during the coming year. Last year, Verizon launched the Mobility Management for Government solution to help agencies manage and secure the wireless devices of their mobile employees. This solution is now coupled with Verizon’s 4G Long Term Evolution (LTE) network, which gives agencies the needed downloading speeds for audio and video conferencing, e-mail, and other applications on mobile devices.

Security is an important element for both cloud and mobile computing, and so Verizon expects security services to remain a strong component of its business. “The drive for security services never ends, because the challenge never ends,” Zeleniak said. “We are constantly engaged with customers in providing managed security service to make sure their networks are not vulnerable to outside attacks.”

Because of advancements in cybersecurity services and solutions, security no longer presents a major roadblock to either cloud or mobile computing. Previously, federal leaders resisted cloud and mobile computing, saying, “'I can’t do that, because it’s not secure,’” Zeleniak said. “But now their attitude is, ‘We have to do that, so how can we secure it.’ We are seeing a big mind shift by our government customers.”

Another area of strong growth for Verizon will be in the delivery of professional services, she said. During the past few years, Verizon has hired leading experts from industry in security, mobility, cloud computing, and other areas to provide consulting services to agencies implementing new technologies.

Given current budget constraints, winning new business can be challenging, and so to compete effectively and assist its federal customers, Verizon tries to help agencies find ways to cut their budgets, Zeleniak said. “We make sure that whatever we propose to a customer, we can show a positive return on investment — how the service or solution can save dollars, save time, and support their business.”