Summary
Verizon purchased MCI, a little over three years ago, to gain access to an enterprise customer base, a global IP network and the Federal government's Networx contract. MCI, as the article points out, was not really a vertical market player. Renaming MCI to Verizon Business did not miraculously create the solution offerings needed to become a viable competitor in the data center, service integration, and business process markets. With little investment in new solution product offerings, staff and distinguishing intellectual property, Verizon Business is left trying to play the 'global IP network' card with little success.
Analysis
Everyone wants to get into the 'solutions', 'management', 'data center', 'virtualization' markets. The goal is to find a customer base that has deeper pockets, is less subject to churn, can provide stable recurring revenue and can be counted on for expanded purchases.
The easily defined categories of the past 'telco', 'vendor' and 'service provider' have all been muddied since the bubble popped in 2001. HP bought EDS. IBM has Global Services. Cisco is shifting into servers and data centers. ATT and Verizon are doing cloud computing.
Reviewing Verizon Business' "data center" offerings shows them to be mostly co-location opportunities backed by a 'global IP network'. "Virtualization" is a consulting offering to evaluate your servers using VMWare tools to try to bring in VMWare and new servers.
Making an alliance with Accenture will probably not help a great deal. Accenture is a large enterprise player. Large enterprises will listen to Accenture and then buy their data center/management services from a large, flexible service integrator with a proven track record and a large pool of available consultants.
Perhaps VzB should consider the SMB markets? They could:
1) Partner with companies like Epicor, Brocade and other companies with great product sets. Forget about SAP, VMWare, etc. Those are too expensive for the SMBs.
2) Partner with vertical SIs in large markets to handle the actual lifting and hauling.
3) Spend $20M to buy server/storage infrastructures for their data centers.
3) Use their existing 200+ data centers for more than co-lo. Use them as the foundations for true data center offerings.
With relatively minor investments (for a company the size of Verizon) and in a short time-frame VzB could become a major player in the SMB market. This would create the trust factor that large enterprises need to have. Then VzB can move up the ladder and benefit from an Accenture alliance.
Otherwise, IBM, HP/EDS, Cisco, Oracle/Sun and many others will deliver a quick, killing blow to Verizon Business.
