Qwest CyberCenter May Mint More Government Business

Qwest CyberCenter May Mint More Government Business

By Jennifer Freer, Staff Writer

Qwest Communications International Inc.'s newest CyberCenter is ramping up its Web hosting services for its first government customer, the U.S. Mint, a project that company officials hope will showcase the center's capabilities and snag more government business.

The CyberCenter in Sterling, Va., won a contract April 27 after the Mint, an agency of the Treasury Department, launched the sale of several new coins online and found its online applications could not handle the Internet traffic.

The company provides Web hosting, professional services and equipment to the Mint through its CyberCenter. It also will provide network availability, access to East Coast and West Coast data centers for back-up capability and high-capacity bandwidth.

With federal agencies pushing to get e-government applications up and running but struggling with scarce personnel and technology resources, the CyberCenter services offer "an appealing alternative" to performing the work in-house, said Jim Payne, vice president of the Denver-based Qwest Government Systems unit.

Qwest officials declined to disclose the specific terms of the Mint deal, saying it was a multimillion dollar, multiyear contract.

The newest of four Qwest CyberCenters in the United States, the Sterling center opened in December 1999 to provide a multitude of services to commercial and government customers. The services offered include Web hosting, site monitoring, site management and network access.

The Mint, which began online sales of its coins in April 1999, expects this year to sell $1 billion in collector and investment-quality coins through mail order, online, wholesale and retail channels. The online portion of these sales likely will exceed $125 million this year, making it one of the nation's top e-tailers, said Mint officials.

"It's all about commerce and bandwidth," said Glenn Hall, assistant director in the Mint's office of electronic business, in explaining why the Mint is using the CyberCenter. Qwest also is providing professional services, such as enhancing the Mint's e-commerce applications and making the Web site more accessible to disabled users, he said.

Other agencies also have shown interest in the center. "We're working on a series of proposals for numerous agencies to demonstrate what the Mint is doing to show others the benefits," Payne said. "Qwest could simply host an agency's Web site or it could evolve its services with greater security options, greater firewalls and enhanced network services."

Qwest is negotiating with several other government agencies interested in the new CyberCenter, Payne said. He would not elaborate, but said Qwest plans to announce details in the next 60 days.

The services offered by the Qwest centers can help provide e-government solutions more quickly and at low costs, but the government is also a cautious customer, said Warren Suss, president of Warren H. Suss Associates, a research firm in Jenkintown, Pa., that specializes in telecommunications.

"The government is trying to focus on its core mission," Suss said. "Some of the services offered by the centers are not core to the government's mission, yet if the centers can provide high reliability, low risk and rapid resolution, the government can reap the benefits of next-generation technology."

One of the benefits for the Mint is that Qwest's other CyberCenters also are available if needed. Each CyberCenter can support the full demand of the Web site, which should eliminate the chances of the Mint site going down, Payne said.

The four CyberCenters are located in Sterling; Sunnyvale and Burbank, both in California; and Newark, N.J. Qwest also plans to build centers in Atlanta, Boston, Chicago, Dallas, Denver, Detroit, Houston, Minneapolis, New Haven, Conn., Philadelphia, San Diego, Seattle, St. Louis and Tampa, Fla.

The company also plans to build centers in Europe, although no construction has begun.

The company would not specify how many customers use the center, but it has spent millions in building the 20,000 square-foot Sterling center. In the first quarter this year, Qwest reported a growth in capital spending for 2000 to $3.3 billion compared with an expected $2.7 billion. The company said it was due to "growth opportunities for acceleration of our CyberCenter expansion and build-out of local broadband services."

Services at the Sterling center are in high demand, and Qwest already has begun construction to double the size of the center, Payne said.

Qwest selected IBM Corp. of Armonk, N.Y., to help build and provide operational support for its CyberCenters in North America. IBM will become an anchor tenant in the Qwest centers and purchase hosting space for its customers' e-commerce initiative.

The centers throughout the United States and Europe are expected to generate $5 billion in combined revenue for Qwest and IBM over the next seven years, according to Qwest officials.

Qwest also partnered with KPMG Consulting of McLean, Va., to help build the Sterling center. Qwest owns 51 percent and KPMG the rest.

Despite having a stake in Qwest's Sterling location, KPMG also has its own Broadband Solutions Centers that compete to some degree with Qwest centers. Its newest center opened in McLean, Va., in May. It, too, is addressing the needs of government customers and has spent $80 million to six centers across the country this year.

The McLean center will allow government agencies to save money and improve services by providing a means for developing technology solutions, proving technical concepts before making a major investment decision and supporting implementation for a government entity, said Dan Johnson, executive vice president for public services of KPMG Consulting.

Qwest's Payne said the centers compete against each other, but on different levels. Agencies that need a specific scope of work created and a definition of content for an e-commerce application can go to KPMG's center. Qwest's center is more useful once the applications are defined, Payne said.

In addition to having access to advanced commercial technologies, governments can benefit from other services offered by the centers, such as network management and outsourcing, Suss said. "I expect to see those centers take off."

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