BellSouth Aligns with Partners on E-business Push

WASHINGTON (01/26/2000) - BellSouth Corp. has formed two new business partnerships to extend its network consulting and network security offerings as part of a push to capture more business from companies that want to increase the amount of business they do over the Internet.

BellSouth released details yesterday at the ComNet show about its strategic alliance with Predictive Systems Inc., a move that formalizes a relationship the two companies have had for the past six months. BellSouth bought a US$10 million equity stake in Predictive Systems in October of last year when the company went public.

BellSouth's other new alliance is with Internet Security Systems Inc., company officials said here during a briefing at ComNet. The two companies are codeveloping a comprehensive suite of managed security services, including firewall, intrusion detection and virus filtering services, the officials said.

The partnerships will improve BellSouth's product and service offerings to customers in the nine-state southeastern region of the U.S., but will extend beyond those boundaries by virtue of the broader U.S. presence of Predictive Systems and Internet Security Systems, officials said.

The partnerships also represent a better strategy than BellSouth acquiring or merging with the two companies, said Richard Dean, senior research analyst with the network support and integration services program at International Data Corp. (IDC).

"BellSouth has recognized the fact that partnerships and strategic alliances can help them improve their services in their geographic footprint," Dean said.

"The services that (Predictive Systems and Internet Security Systems) have been able to provide are a step up from what BellSouth could provide itself."

In the network consulting services market, which IDC predicts will grow to $6 billion worldwide in 2003, BellSouth aims to be a single point of contact for companies that need help building their network, checking the readiness of their network and handling network management issues.

"Companies today don't have the proper skill sets to manage all aspects of their network," Gerald K. Fisher, senior director of professional services at BellSouth said during yesterday's briefing.

Predictive, which has offices in 10 U.S.cities and in Amsterdam and London, has developed a risk analysis methodology called BusinessFirst that helps companies understand the risks of launching any e-business project or service. BellSouth, MCI WorldCom Inc. and Qwest Communications Inc. are among Predictive's clients already using the BusinessFirst methodology.

The BusinessFirst approach is designed to break down the complexity involved in establishing and managing e-business programs, said Ron Pettengill, chairman and chief executive officer of Predictive Systems. Companies that are launching e-business programs risk reputations that took years to establish, and they need to make a thorough assessment before committing themselves to e-business propositions, Pettengill said.

BellSouth's partnership with Internet Security Systems is aimed at providing services to medium-sized companies with less than $500 million in annual revenue, BellSouth and Internet Security Systems officials said.

"The idea is to bring security to the mid-market as a service rather than a technology," said Glenn McGonnigle, vice president of business development with Internet Security Systems.

In a third announcement yesterday, BellSouth said it has revamped its service level agreements. A key feature of the more comprehensive agreements is a monthly statement that gives customers an accounting of network performance and automatically credits customers' accounts if there was a network outage, said Scott Waid, director of BellSouth's business Internet services.

Dean said the approach will be an important differentiator for BellSouth.

"No one really puts in writing that they are going to proactively send rebates or credits to customers without them asking," Dean said. "BellSouth is making a statement that they are standing behind the services they offer."

BellSouth, in Atlanta, can be contacted at +1-404-927-7850, or at http://www.bellsouth.com.

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