Verizon Business Jumps Headfirst into Hosted IM Fray

On April 5th Verizon Business announced the launch of its Hosted Secure Instant Messaging (IM) Service to enable real-time collaboration and communications in the workplace that meets enterprise needs for security and usage management.

Recommended Competitive Responses

► Competitors including the carriers Broadwing, Qwest, BellSouth and SAVVIS need to look at their own services roadmap and look to partner to bring management of e-mail and IM services to market.

► Managed Security provider Symantec needs to promote its recently launched IM Manager, leveraging its acquisition of IMlogic (also a partner of Verizon Business), as well as the company’s ability to integrate with Symantec’s Enterprise Vault, its e-mail compliance system.

► NaviSite should promote its own comprehensive managed messaging service, which includes both email and IM services.

► IBM should promote its January 2006 update of its IBM Lotus Sametime, which included a new level of business communications, providing clients with the ability to communicate with other IM platforms, including AOL, Google Talk and Yahoo!.

Recommended End User/Customer Responses

► Customers will be very pleased with this initial rollout, combining administrative control features, security and flexibility into a comprehensive messaging solution. Large enterprise customers should inquire about future rollouts that will include a broader global offering.

► Existing Managed Services customers of Verizon Business should inquire about future portal integrations with all Verizon Business services, as it currently offers multiple portals for clients, one for its Managed Hosting Services and another for remaining Verizon Business services.

► Customers that are inquiring about hosted messaging services and do not need all the additional offerings from a carrier should also inquire about services from providers such as NaviSite and IBM.

EarthLink Ushers in New Era of Business Broadband, Finalizing New Edge Networks Acquisition

On April 13th EarthLink completed its acquisition of New Edge Networks, a privately owned national provider of DSL and broadband IP VPNs, multi-site managed data networks and dedicated Internet access for businesses and wholesale to other carriers.

Recommended Competitive Responses

► Competitors will need to address the new EarthLink, which can package voice, data, protection, and security tools together to meet the demand for business-class broadband access, VoIP, security and VPN services, from small business users up to enterprise customers with widely distributed offices.

► Cable providers can compete on speeds as they do against all DSL providers, and ILECs offering DSL can compete on price and perceived value.

► All competitors can point out that EarthLink hasn’t announced any concrete plans for service bundles or even an integration plan, beyond selling EarthLink’s traditional business services over NEN’s pipes.

► Covad should send out a message to the market welcoming EarthLink as a business partner, citing that both New Edge Networks and EarthLink have been, and continue to be, valuable business partners.

Level 3 Snaps Up ICG Communications

On April 17th Level 3 announced that it has signed an agreement to acquire ICG Communications. Level 3 will gain ICG’s network assets and customers in Colorado and Ohio, consisting of approximately 2,000 metro and regional fiber miles, 500 points of presence and 1,600 customers.

Recommended Competitive Responses

► In 2005, ICG’s sales strategy was one of customer retention rather than acquisition. The customers that have stuck with ICG to date may feel that its acquisition by a carrier with two other integration projects in play is just too much, and will be open to discussions with competing wholesale providers.

► Competitors in the region can point out that a large national carrier with a history of unprofitability and two other acquisitions in play is now acquiring a small regional carrier that has finally begun to show some positive progress.

Recommended End User/Customer Responses

► Current ICG wholesale customers should take heart in the fact that ICG is being acquired by a carrier with extensive experience and focus on the wholesale market. Level 3 has been providing wholesale services for many years, and is well-versed in the needs of ISPs, CLECs, IXCs, and other providers.

► Current ICG enterprise customers may be concerned that their services will now be managed by a carrier with a long history primarily in providing wholesale services. While there is no need for immediate action and Level 3 is working to increase its enterprise market share, these customers may want to closely monitor support and performance through the acquisition process and establish a back up plan in the event of service problems.

Salesforce.com Goes Mobile with New Acquisition

On April 11th Salesforce.com announced that it has acquired wireless technology developer Sendia for USD 15 million in cash. Using Sendia’s technology, Salesforce.com also launched AppExchange Mobile, a platform that allows enterprise customers to access on-demand applications from handheld computers and smartphones.

Recommended Competitive Responses

► Pure-play managed application providers need to look at means to expand their prospective audience via additional partnerships or acquisitions, as Salesforce.com moves into the wireless markets that once served as differentiators for competitors.

► Traditional platform providers such as Microsoft and Oracle are currently at no risk of losing market share due to Salesforce.com’s acquisition; however, these providers should keep a watchful eye on the company if it determines to compete more directly in this market.

► USi’s sales and marketing forces can boast over 30,000 seats of hosted Exchange under management for 18 enterprise clients, delivering managed messaging and collaboration solutions for large enterprises ranging from 1,000 to 25,000 seats.

► NaviSite’s sales and marketing forces can point to its own Mobile Messaging Services that include wireless access to Microsoft Exchange and Lotus Domino, as well as wireless data encryption, and 24 x 7 management of mobile hardware, OS, and application software.

Recommended End User/Customer Responses

► Customers will want to inquire about Salesforce.com’s SLAs for promised uptime and money back guarantees due to potential service outages and business operation interruptions.

► Salesforce.com customers should inquire about the integration timeline for all Sendia personnel, technology, and services and ask if there will be a free trial period with this new offering.

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