Q&A: Qwest ramps up federal sales effort, Part 2

NETWORK WORLD NEWSLETTER: CAROLYN DUFFY MARSAN'S ISP NEWS REPORT
08/03/05
Today's focus: Q&A: Qwest ramps up federal sales effort, Part 2

Dear networking.world@gmail.com,

In this issue:

* Goals for Qwest's Government Services Division
* Links related to ISP News Report
* Featured reader resource
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Today's focus: Q&A: Qwest ramps up federal sales effort, Part 2

By Carolyn Duffy Marsan

In this week's issue of the ISP News Report, we provide the
second half of our recent discussion with Diana Gowen, Qwest's
new senior vice president of government services sales.

In May, Gowen took over the reins at Qwest's Government Services
Division, which is in the midst of bidding on the 10-year, $20
billion Networx program. Networx, the largest telecom services
bid in the world, will provide legacy and leading-edge voice,
data and video services to all U.S. federal agencies. Every
major U.S. telecom carrier - AT&T, MCI, Sprint, Qwest and
Verizon - is planning to bid on it. Read more about Networx
here:
<http://www.networkworld.com/news/2005/032805-contract.html?rl>

Networx is split into two parts: Universal, which encompasses a
full suite of 37 telecom services ranging from older frame-relay
to cutting-edge IP VPNs; and Enterprise, which is geared toward
niche IP and wireless services. In a bold move, Qwest is
planning to bid on both pieces.

Here are excerpts from my conversation with Gowen about Qwest's
strategy for the Networx procurement, its plans in the federal
market and why the federal market is key to the ISP's overall
success:

Q. What do you see as the big differences between bidding on
Networx and FTS 2001, the Networx precursor contract?

A. The scope of the services in Networx is broader. The
requirements in reporting, billing and provisioning are more
stringent than in 2001. Many of the things that over time
evolved as features on FTS 2001 have become requirements on
Networx. The portal is a good example. [Service-level
agreements] are tougher. In fact, the SLAs were almost sleepers
on FTS 2001. This time the government has spent a lot of time
and paid attention to SLAs.

Q. Is there more price pressure on Networx than FTS 2001?

A. In FTS 2001, the evaluation criteria was not dissimilar to
this one in that you had technical and management ratings, but
price was equal or more important than all the other things put
together. It's the same thing with Networx. You have to write a
very good, compliant proposal but then you better work on making
sure that your cost structure is low because you're going to
have to get down to very competitive rates. In FTS 2001, the
significant difference was that the government was mostly a
voice buyer. When you look at FTS 2001, it was 60% to 40% split
for voice and data. But it flipped three or four years ago. Now
it's mostly data. For the FTS 2001 players, the big margins were
on the data side. Now everybody's going to have cost pressure
and price pressure in data, where the margins are today.

Q. Why is winning Networx a high priority for Qwest?

A. It's a big buy. It's a 10-year buy. There is a lot of upside
for a company like Qwest because we're not one of the legacy
carriers. And, we have certainly been successful in growing our
government business, and I expect to continue to be successful
there.

Q. How big of a problem is it for Qwest if you don't win?

A. I really don't think that's going to happen. However, should
that happen, we have an FTS 2001 crossover contract that extends
until 2009, which is a longer-term buying vehicle than the rest
of the carriers have. One of the strategies that Qwest has had
that has been very successful is to partner with systems
integrators instead of competing against them. We will continue
to do that. Should the worst of all worlds happen and we don't
win either a Universal or Enterprise bid, we will continue to
partner with the systems integrator community.

Q. Besides winning Networx, what other goals do you have for
Qwest Government Services Division?

A. Building civilian agency business is one of the principal
areas of emphasis. Obviously, we're interested in keeping our
business at Treasury. The Department of Homeland Security has to
be one that you have to target because it's the biggest federal
agency after the Department of Defense.

Q. How was Qwest's position in the federal market affected by
the fact that Qwest wasn't successful at acquiring MCI?

A. It wasn't. It would have been nice to have even more
geographic reach than we have today. Certainly, an MCI merger
would have provided that. But we still have a very modern,
robust, nationwide network. We have a robust network in the 14
states where we are an ILEC. It doesn't really affect our
ability to bid and win Universal or Enterprise on Networx.

Q. What trends do you see in the federal telecom market right
now?

A. There is more interest - I didn't say more buying - but more
interest in VoIP. So all of us are exposing our customer base to
our VoIP offerings. The big dilemma for most of our federal
customers is: Do I buy the equipment or do I buy a service from
somebody? Buyers are asking: How do I put this together? And is
it really prime time yet? Those willing to dip their toes in are
doing trials.

There's a lot of interest in security, but it doesn't seem like
the federal government has been successful in allocating the
funding they need for purchases. So I think the big task for all
of us is to figure out how to get them into newer technology
that saves them money over what they're doing now so they can
afford to put the security layer on top.

The top 5: Today's most-read stories

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2. Cisco vulnerability posted to Internet
<http://www.networkworld.com/nlisp4301>

3. Router flaw sparks battle
<http://www.networkworld.com/news/2005/080105-blackhat.html>

4. Google now a hacker's tool
<http://www.networkworld.com/nlisp4303>

5. Michael Lynn and Cisco: Stepping in front of the freight
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<http://www.networkworld.com/columnists/2005/080105backspin.html>
_______________________________________________________________
To contact: Carolyn Duffy Marsan

Carolyn Duffy Marsan is a senior editor with Network World and
covers emerging Internet technologies and standards. Reach her
at <mailto:cmarsan@nww.com>
_______________________________________________________________
This newsletter is sponsored by Nokia
Empower Your Mobile Enterprise

Nokia believes that business mobility will fundamentally change
the way work gets done-and for the better. To allow the entire
organization to get the most from this paradigm shift in
productivity, Nokia Enterprise Solutions focuses on delivering
increased efficiency through enhanced mobility. Learn more by
downloading this white paper today!
http://www.fattail.com/redir/redirect.asp?CID=109243
_______________________________________________________________
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