Microsoft and Qwest Team to Deliver Next-Generation Internet-Based Broadband Services for Vital Business Software Applications.
December 14, 1998 -- Microsoft Corp. and
Qwest Communications International Inc.
today announced a strategic relationship that
will redefine the boundaries for electronic
commerce, Web hosting and other
mission-critical business software
applications and services. This relationship
will enable businesses to have high-speed
network services that maximize network
resources, reduce costs, generate new
sources of revenue and optimize management
of computing operations. The Qwest service,
built on the Microsoft® Windows NT®
Server operating system and Qwest's Internet
Protocol (IP)-based fiber optic network, is
designed for businesses of all sizes.
To accelerate Qwest's time-to-market with
business services, Microsoft will license a
broad range of its software to Qwest. In
addition, Microsoft will become a shareholder
in Qwest by purchasing $200 million of
Qwest's common stock at $45 per share.
Beginning in the second quarter of 1999,
Qwest will offer businesses a complete,
single-source high-speed service that is
scalable and secure. Qwest's high-speed
network will also support the development,
integration and maintenance of advanced
hosting services, including dedicated
electronic commerce, Web application
hosting, streaming media, managed software
services and virtual private networking built
on Microsoft platforms. Qwest will create a
new business unit focused on the new
markets starting in January 1999.
Qwest expects the new service to generate
approximately $150 million in revenues during
the first two years, most of it in 2000. Qwest
also expects the earnings before income taxes
plus depreciation and amortization (EBITDA)
for this business to be slightly negative in
1999 and slightly positive in 2000, and capital
expenditures to total approximately $150
million in the first two years.
“Qwest is confident that, by working with
Microsoft, we will further the development of
broadband applications and accelerate
growth in the adoption of complete
Web-enabled solutions. We will help drive
the availability of applications at performance
and pricing levels that will significantly
enhance the productivity of businesses,” said
Joseph P. Nacchio, president and CEO of
Qwest Communications. “By working with
Microsoft and its distribution channels, we
believe that we will be able to accelerate by as
much as 12 months our own plans for the
delivery of Web-enabled applications.”
“Microsoft is pleased to have this
opportunity to work closely with Qwest in
shaping this new end-to-end network service.
We are investing in the company and its
approach because we think this innovative
broadband solution has the potential to bring
enormous benefit to customers,” said Steve
Ballmer, president of Microsoft. “We believe
this strategic relationship demonstrates that
Windows NT Server meets communications
companies' needs for a stable, secure and
scalable solution to deliver a wide range of
new network services.”
The network service will offer businesses new
ways to acquire advanced communications
services. For example, Qwest will deliver new
services, such as instant technology
upgrades and usage-sensitive billing, which
will help businesses realize a quick return on
their investment. The spectrum of advanced
services offered will include the following:
· Dedicated electronic commerce, offering
businesses an easy-to-use, customized
system that will allow business partners to
purchase goods and services and monitor
order status in a secure, high-speed network
environment. Qwest's service offering will
help companies more rapidly deploy
electronic commerce solutions and begin
realizing the cost-efficiencies associated with
Web-enabling sales, transactions, business
supply chains and inventory management.
· Web application hosting, allowing
companies to migrate mission-critical
business applications such as electronic mail,
human resources, finance and other
operations to secure off-site servers with
high-speed access and a single point of
contact for around-the-clock customer
support. Aside from the Microsoft product
line, businesses will also have the flexibility to
deploy Windows NT Server-based industry
applications with increased functionality and
reliability.
· Streaming media, providing businesses with
a scalable, on-demand delivery capability that
will enable distribution of images to single
and multiple locations to support
videoconferencing, PC-to-PC conferencing
and video distribution services.
· Managed software services, providing a
complete outsourced solution of platforms,
tools and utilities to enable the enterprise IT
organization to effectively and efficiently
provide for asset management, software
distribution and management, network
management, network performance tuning
and desktop management.
· Virtual Private Networking (VPN) and Virtual
Private Dial-up Networking, offering
businesses an end-to-end solution to connect
their LANs, hosting sites, business partners,
branch offices, telecommuters and mobile
employees in an integrated, secure and simple
manner. |
