No. 19: Verizon caps off a busy year with a big win

Company captures Networx as it flexes its telecom muscles and positions itself for growth

Verizon Communications Inc.

Top 100 revenue: $1.2 billion

242,000 Employees

2006 revenue: $88.1 billion

2006 net earnings: $6.2 billion

2005 revenue: $69.5 billion

2005 net earnings: $7.4 billion

Verizon Communications Inc.'s status as one of three prime contractors awarded the General Services Administration's Networx Universal contract caps off a year spent integrating the wireless and local infrastructure capabilities of Verizon with the global networking, architecture and federal government acumen of MCI.

The past year's activity included opening a new 30,000-square-foot Government Network Operations and Security Center in Northern Virginia in September. The facility is a state-of-the-art center dedicated to supporting the security and operational requirements of federal government customers.

The Networx win is indicative of Verizon's ability to guide agencies into a new era of advanced communications services ? providing cutting-edge voice, data, wireless and Internet services to government agencies worldwide, said Susan Zeleniak, who was recently named vice president of Verizon Federal Government, which is part of Verizon Business. As the lines blur among networks, computers and telephony, governments will rely on contractors with capabilities across that spectrum.

"It used to be easy to say the network stopped here and computers start there," Zeleniak said. "Now applications depend on the network as much as the server."
As a result, agencies are trying to outsource more management and network capabilities, she said. "They just want applications to work."
Verizon amassed about $1.2 billion in prime contracting work in 2006, placing the company at No. 19 on the Top 100.

Through Networx, Verizon will act as a services and solutions integrator in meeting the product and service requirements of the government. Verizon Wireless will provide wireless voice and broadband services.

The award "recognizes our strong past performance, our commitment to customer service and our ability to bring together large numbers of products and services," Zeleniak said. Successfully meeting the contract's 39 mandatory product requirements shows the company's ability to select and partner with other contractors ? the company's chosen path for future growth over an acquisition strategy.

MCI, which is now part of Verizon, was one of the two telecommunications services providers initially awarded the FTS 2001 contract, which Networx replaces. Through FTS 2001, the company serves almost every federal agency.

"We have a lot of business to retain," Zeleniak said. Networx is more wide-ranging than FTS 2001, incorporating complex network management and entails more end-to-end solution sales.

That's a skill set Verizon plans to build on in pursuing other upcoming opportunities, including GSA's Washington Interagency Telecommunications System and Alliant, in addition to a half-dozen Defense Department contracts.

Verizon may benefit from the strengths that MCI brought when the companies merged in 2005, said Jerry Edgerton, retired president of Verizon Federal and now an independent adviser in the government information technology market. In particular, he said MCI's customer service capabilities should help.

"We went through a lot of turmoil in past years, but we never lost focus on the customer," he said.

Verizon employees on customer accounts strive to provide needed services to solve agencies' problems, Zeleniak said. "You can have good technology, but if you don't have the services to go with it that won't do you much good," she said.

The culture also promotes sharing knowledge and ideas across government and commercial enterprise projects, she said.

Verizon must rely on those strengths to stave off newer entrants hungry for its market share in the federal space, Edgerton said. All of the players must continue improving their efficiency to stay competitive, he said.

About 20 percent of Verizon Business' sales come from governments, and more than half of that from the federal government. "For us, big deals really drive our business," Zeleniak said.

For Verizon, that has meant investing in convergence technologies such as those in demand under Networx. One example is computer telephony integration for call centers that allows customer records to be summoned as the call is answered, saving time and money. Agencies are looking to join local-area networks with wide-area networks and voice networks with data networks for end-to-end, cost-effective and highly available access to data.

Federal chief information officers "face ever-increasing demands from their constituents within their agencies," Zeleniak said.

Users need visibility and insight into their networks, Zeleniak said. Diversity, continuity of information, and the security and privacy of data are also paramount, requiring contractors such as Verizon Business to continually invest in technologies and skill sets to deliver on those demands.

"There is no allowance for downtime," Zeleniak said.

Profiles of the Top 20 companies in the 2007 Top 100

No. 1: Lockheed Martin's reinvention

No. 2: With SBInet, Boeing IDS takes flight

No. 3: Northrop Grumman rises to new challenges

No. 4: KBR gets down to business

No. 5: IPO catapults SAIC into a new era

No. 6: Raytheon strives for balance

No. 7: General Dynamics in full sprint

No. 8: Fluor's ready in a pinch

No. 9: L-3 leadership stays the course

No. 10 EDS, Hard-learned lesson

No. 11 CSC, Experience that counts

No. 12: Battelle seeks new frontiers

No. 13: Booz Allen, Quality over quantity

No. 14: Bechtel telecom makes a splash

No. 15: For BAE, persistence pays off

No. 16: ITT makes a push into new markets

No. 17: Dell, Talking about evolution

No. 18: Technology and service fuel IBM

No. 19: Verizon caps off a busy year with a big win

No. 20: United Technologies gains altitude

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