Part 3 Interview - Fran Shammo, President of Verizon Business

Fierce Telecom: During the first quarter, one of the highlights for Verizon Business was a continued dedication to rolling out integrated services and security services. Can you touch upon those trends?

Shammo: From a strategic services standpoint, we think we're a leader in a couple of them. One is security. There was the purchase of Cybertrust back in 2007 and our continued investment in that. We think that's a strength of ours, and in this current environment with so much cyber trust security issues swirling around, we have picked up a lot opportunity in the security and professional services side of the house. We most recently launched our computing in a cloud service. We weren't the first to market, but I think we have a product that's differentiated in the market because we have embedded a lot of our security knowledge into that product. If you look at other competitors like Google, they have a nifty cloud service, but it's over the public network and not secure.

The last one is managed mobility. We just launched that in June and we'll be making a big splash in September with additional features. We're also partnering with Vodafone to launch a managed mobility solution for the enterprise space. This is one of the enterprise customer's hot buttons because we can consolidate all of the wireless carriers they have to deal with and manage it for them.

Fierce Telecom: Verizon Business can offer a hosted VoIP service or a managed PBX onsite (through its collaboration with Avaya). Coming back to converged services for a minute, are you seeing more enterprises adopt IP-based voice services or is it more of a case by case basis?

Shammo: We're still seeing growth in the 20 percentile range for Private IP (PIP). On the question of whether do you host it or not comes down to customer preference. Obviously, we want to host it and manage it because that's where we get all the profit, but if I just sell PIP obviously the price compression in the marketplace for IP voice is not a great product. It's a healthy growing product, but it won't generate the margins I want. What we try to tell enterprise CIOs is that we try to bring our expertise in the managed and hosted environment, but it again it comes down to customer preference. You will just have some customers that will just not release their network to a third-party and believe they can do it better than anybody. Then, there are other businesses that will leverage a hosted solution.

The other thing that we're seeing some traction in is some of our other IP solutions off the VoIP network such as our Burstable Enterprise Shared Trunks (B.E.S.T) service. Instead of having multiple T1s or DS3s going into a premise, this technology consolidates all of that into an IP network. It's flexible enough that if you have peak usage hours during the day, you don't have to buy at the peak, but buy at the lower and we'll supply the peak when you need it for that hour and you only pay for the hour.

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