* What Qwest is doing to win some of the $20 billion Networx program
Qwest is stepping up its efforts to win federal government business with a new leader and a bold plan to bid on both the universal and enterprise parts of 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. (You can read more about Networx here:)
http://www.networkworld.com/news/2005/032805-contract.html?rl
Every major U.S. telecom carrier – AT&T, MCI, Sprint, Qwest and Verizon – is planning to bid on it. Networx is split into two parts: Networx Universal, which encompasses a full suite of 37 telecom services ranging from older frame-relay to cutting-edge IP VPNs; and Networx Enterprise, which is geared toward niche IP and wireless services.
Qwest announced in May that it had hired veteran federal telecom executive Diana Gowen to be its new senior vice president of government services sales. Gowen previously led defense and civilian agency sales efforts for Broadwing, MCI and AT&T. Gowen replaces Jim Payne, another longtime federal telecom executive who joined Qwest in 1999 after holding similar sales and marketing posts at Sprint and GTE.
I recently interviewed 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. In the next two issues of the ISP News Report, I’ll provide excerpts from our conversation:
Q. What is Qwest’s plan regarding Networx?
A. We’re bidding both Universal and Enterprise. There was a debate within the company about whether we really had to do both. I felt that we absolutely had to at least attempt to be a Universal player. The reason I believe that is I think that most of the legacy networks that will be up for grabs initially are networks that span the entire scope of Universal. I think if you are an enterprise player with a smaller geographic scope, you’re going to be hard-pressed to compete for that business.
Q. How big is Qwest’s Government Services Division?
A. We’re just under $500 million a year. Our strategy and our hope within Qwest Government Services Division is that we grow considerably from where we are today over the next five years. We are not an insignificant player today. We’re 55 out of the list of the federal government’s top 100 suppliers.
Qwest is in a good position to grow because we don’t have a lot of legacy or incumbent business. If you look at where we have been successful over the past five years, it started with the military. The military expanded and grew and that is a significant business for Qwest. Then there was a new emphasis to bring in the right players and try to penetrate civilian agencies. We have contracts with the departments of Treasury, Energy and Justice. But if you look at the Social Security Administration, Health and Human Services, the Environmental Protection Agency, the Department of Education, you can go down the list and we have local service business because we are U.S. West. Do we have big network business with these agencies? No. AT&T, Sprint and MCI do. So that’s the business that we want to go after. I think you have to be a Universal player on Networx to be able to compete in that space for that business. We have a nationwide network, so why shouldn’t we go after that business?
Q. What’s your view of the enterprise portion of Networx?
A. On the Networx enterprise side of the house, it’s all about unique solutions. Can we do that? Yes. We’re going to find partners that will allow us to do exactly that. If you look at Qwest, we have one of the last networks that was built. So it has the latest and the greatest features. We were the first to get out there with a nationwide IP network and sell it that way. So I think we’re well positioned for Networx Enterprise. A lot of folks say that Enterprise is a booby prize, but I don’t look at it that way. I think you want to be playing on both sides of the house, Universal and Enterprise.
Q. What can you tell me about your strategy for winning Networx Universal?
A. On Universal, I think it’s all about being compliant and having a low, low price. Have you looked at the evaluation criteria? It’s price. So if you’re talking about strategy, it’s figure out how you can be compliant and have a lower cost structure than the other guys. It’s an interesting proposition because the government has government-unique, non-commercial requirements. So part of your strategy is to make those costs lower than the other guys, too. So that’s our strategy.
Q. Does Qwest have any advantages in getting its cost structure down on Networx?
A. We have a newer, nationwide network than all of the rest of them. We have more capacity than all of the rest of them. We do not have a legacy of many acquisitions, so we don’t have dozens of billing systems and provisioning systems to mesh together. And I think that Qwest has a good roadmap for doing many of the things that are required in Networx as part of our standard commercial offerings, so that’s helpful.
Q. Where does Networx sit in terms of your priorities?
A. At the top of the heap. Would that I could just focus on this one thing! That would be really cool. But we have an incumbent situation that we are bidding on at the Treasury. There’s a big Defense Department procurement that we want to play in. The State Department keeps putting out work orders, and we’re one of the suppliers there. NASA just put out a work order for a network under FTS 2001 [the Networx precursor contract]. Nonetheless, we’ve built a dedicated team to go attack Networx.
Q. How high of a priority is Networx to Qwest at the corporate level?
A. [Qwest CEO] Dick Notebeart is well aware of Networx. It’s on his priority list. Barry Allen, who is the head of operations and engineering, is committed to doing Networx. So is my boss. Dan Yost, who is the head of product management, is working hand-and-glove with us in responding to this bid. It’s a priority within the company. But I think Networx is a priority for most of the companies bidding it. It’s a significant investment, and it requires that. It touches many parts of the company. If you’re going to bid, you have to have backing.
Read more from Diana Gowen about the importance of the federal market and trends she sees there in next week’s issue of the ISP News Report.
