SAN MATEO (04/03/2000) - Theodore Raffetto, the president of Bell Atlantic's Data Solutions Group, ponders the merge of GTE Corp. and Bell Atlantic Corp.
Upon completion of their pending merger, GTE and Bell Atlantic likely will come out strong for enterprise data business, playing up their combined strengths in integrated solutions.
At the heart of the merged companies' enterprise-network strategy is Bell Atlantic's Data Solutions Group.
The two companies are now in the final throes of the merger's regulatory approval process and are waiting for final word from the Federal Communications Commission.
Theodore Raffetto, president of the group's Network Integration and Outsourcing division recently sat down with InfoWorld Senior Editor Jennifer Jones to discuss the merger and its potential impact on the enterprise.
InfoWorld: Bell Atlantic is perhaps best known as an east coast phone company.
Tell me a little about your data operations, specifically your enterprise group.
Raffetto: Let me start with a short history. About two years ago Bell Atlantic looked into the data space to determine the things we needed to focus on. We realized that there were a number of assets in Bell Atlantic that needed to be brought together.
We had an Internet business that was focused on both consumer and business customers. We had a network integration business that was doing design implementation services. And we were fast pulling together the planning group to put together our long-distance network and next-generation services.
So those three became the core entities of the Data Solutions Group. We put them all together with a focus on data and IP.
But if you think back to the spring of 1998, there was a real shift in data networking. At that time, about 80 percent of the enterprise traffic would traverse a company's own networks, and 20 percent would cross public networks.
Now that has reversed.
InfoWorld: Did that shift make it more difficult to determine the direction you wanted to take, or did it clarify your strategy?
Raffetto: Well, it created some real opportunities for us. As our customers looked to really drive applications across a broader infrastructure, they were also looking for partners who understood that.
We therefore tried to build our business not just around the infrastructure but around the design and implementation services surrounding the infrastructure.
We began looking to provide more bundled Internet services.
InfoWorld: Since deciding on that strategy, what services have you added?
Raffetto: Since June of last year we acquired a call-center business and have molded that service into a call-center business that is technology agnostic.
We've done that by focusing on professional services, which will become increasingly important as our clients look to move into a virtual call-center environment that is Web-enabled and accessible from anywhere.
We also acquired a network integration company in the Washington D.C. corridor, which gave us some additional scale and scope.
InfoWorld: Because you are a regional telecom company, are these services limited to your traditional operating boundaries?
Raffetto: We have not been gated on the data services we offer. That is, we have no regulatory limitations that keep us within our region.
Clearly we want to leverage Bell Atlantic's brand name and our presence in this region. But at the same time, we really want to expand beyond that, so we have added things like call-center services and network integration.
InfoWorld: But don't you have to come up with some way to get around the long-distance transport issues regulated by the FCC?
Raffetto: Well, from a long-distance perspective, yes. But from a networking-integration and call-center services perspective, we can do that anywhere the market would be. We can't carry traffic outside of our territory and throughout New York, where we have gotten long-distance relief. But we have to form partnerships for long-distance transport.
InfoWorld: What do you see as the greatest benefit of the GTE merger to your group specifically?
Raffetto: With GTE, what we are really getting is experience in network integration services, which they are doing on a national basis. They offer a robust customer segment in providing PBXs and key systems and other services.
InfoWorld: Can you broaden that out a bit and tell us about the overall vision behind the merger?
Raffetto: If I take a broader focus, clearly the value of the merger to Bell Atlantic is really the move from our more regional roots to be a more national and global business. GTE's Internetworking organization has been in the IP space for some time, and we view that as a really key asset of the merger.
A lot of times, people will ask us why we want to get into the long-distance business, when prices are going through such compression, and there are such shrinking margins.
But what those people don't realize is that long distance would provide us with a catalyst to do so many different things. They don't realize that even in the IP world, where you are sitting at your PC, and I want to provide you with connectivity, we have to hand that traffic off, even if it is traveling across an IP network.
So long distance is not just about offering calling plans to consumers. It is absolutely about allowing us to offer a fuller suite of services and connectivity. It is about connected solutions.
InfoWorld: What specific services, if any, are you now offering with GTE?
Raffetto: We provide a suite of [virtual private networking] services with GTE Internetworking. By working together, we are able to offer a level of security and IP VPN services.
InfoWorld: Would you give me a feel for the types of enterprise customers you are now serving and how that customer set may change after the merger?
Raffetto: In terms of our typical clients, we have been very strong in the public sector, higher education, and state and local governments. We have also been very strong with the federal government because of our presence in Washington, D.C.
Additionally, we tend to be very successful with companies that have regional operations, like health care and banks. Those are companies with the scope of their business within what we define as the Bell Atlantic region.
However, we want to have more national-or global-business customers like a Chase, DuPont, or IBM; companies looking for fulfillment on a national basis.
We already have seen a lot of interest from these companies, which have asked us, 'When are you going to be able to do this? When will you be able to serve us?'
InfoWorld: Do you think there are any industry buying trends among such large companies that may play in your favor?
Raffetto: Well, it seems like a lot has changed in the last five years, especially in terms of the number of partners those kinds of companies have chosen to do business with. It seems to me that they are settling with key suppliers, but then like to have some alternatives they can look at.
Also, we introduced a new service last June called managed-data network services. That announcement was really recognition in the marketplace that clients are absolutely looking for managed services. Specifically, they are looking for partners to provide both the transport and network maintenance they need.
InfoWorld: Can you think of specific areas where there are professional service competencies or new services you want to add?
Raffetto: The whole area of security and security services to meet the needs that our clients now have may be one. Also, this whole area of convergence. We think there is a real opportunity in this space where you have technology like IP PBXs, especially given our voice roots.
So in terms of new announcements [that we will make], we will probably look to form partnerships around IP PBX offerings and integrated messaging and a suite of converged network services later this year.
Bell Atlantic Corp., in New York, can be reached at www.bellatlantic.com.