Fierce Telecom: In addition to your core large enterprise base, Verizon Business recently introduced a set of integrated service packages for the mid-market. How does that market differ than large enterprises, and what drove you to go after this opportunity?
Shammo: The mid-market was split between the Verizon Telecom side of the house and the Verizon Business side of the house. What we decided to do was pull all of the SMB mid-market above 20 to 1,000 employees and consolidate that under Verizon Business. What we did there was try to create standard bundles that are easy to sell to that segment. These are small businesses who just want basic Ethernet Internet services, wireless and potentially some disaster recovery services either from an EVDO backup or other disaster recovery services. We believe that the cloud computing is an area this could be a niche in. We have developed five different bundles that they can pick from that are easy, standard and the pricing is simple, and we think that could be a differentiator. The SMB mid-tier market has thousands of competitors in it, so it's a tough market to compete in, but we're going to see if this different philosophy can attack that marketplace and start to see some inroads there.
Fierce Telecom: Other notable developments during the quarter included some sizable government (GSA Alliant and Social Security via GSA Networx) and large enterprise (CIGNA Life Insurance Company) client wins. Talk about the challenges and opportunities of serving the large enterprise base?
Shammo: Obviously, the federal government is a separate segment for us, and our customers there want unique things. We're a major supplier of theirs and we think we're gaining traction in the government space with our Networx lead and our security expertise. As I mentioned before, government is starting to understand we're a big player in security.
From a commercial standpoint, we're seeing a lot of customers coming our way asking 'if we outsource this how much money can you save us?' You have to take a long-term view of those types of deals. A year ago we won a 7-year contract with Johnson and Johnson. Really, what you hedge your bet on is all of the additional business you get from that customer past the initial bid. We have generated significant additional revenue over and above what the initial bid was for Johnson and Johnson. If you look at BT or AT&T's history, we all say the same thing: these large enterprise bids are very competitive bids, but what you're looking at are the opportunities over and above that bid.
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