1. CLUE Case Study
Verizon: Small Business Center
Connected Life Experiences at Work
Challenge/Opportunity
EXECUTIVE SUMMARY
Verizon needed to address and capitalize on the following
COMPANY PROFILE
Verizon Communications Inc., headquartered market and business dynamics:
in New York, is a global leader in delivering
broadband and other wireless and wireline ● Maturing Market: Although the wireless business has been
communications services to mass market,
business, government and wholesale customers. the driver behind Verizon’s recent revenue growth, this growth
COMPANY HISTORY is expected to slow down as the U.S. mobile market matures.
Verizon Communications Inc. was formed on June With a penetration reaching 100 percent, the U.S. mobile voice
30, 2000, with the merger of Bell Atlantic Corp.
and GTE Corp. market will deliver lower growth rates moving forward.
● Competitive Pressure: In the wireline business segment,
Verizon’s secondary segment focus, the company has experienced increased competition as customers
switch to wireless products or less expensive alternatives such as cable companies or voice over IP (VoIP)
technology, which could continue to put pressure on prices.
● Regulatory Compliance: The Telecommunications Act of 1996 requires companies to allow resale of
specified local services at wholesale rates, negotiate interconnection agreements, provide nondiscriminatory
access to unbundled network elements, and allow co-location of interconnection equipment by competitors.
● Increased Market Position: On January 9, 2009, Verizon completed its US$28.1 billion acquisition of Alltel.
This merger helps Verizon to expand its advanced data services in the United States.
Based on these conditions, Verizon embarked on an initiative to address the needs of small-to-medium
businesses (SMBs) to offer a suite of collaborative services and productivity-enhancing business tools to
this largely underserved market.
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2. CLUE Case Study
Alliances/Partnerships
Verizon has partnered with the following solution/application providers to enable its Small Business Center to offer
the following value-added services and features:
™
● Cisco’s WebEx solution powers Verizon’s Collaboration Center offer. Verizon has also collaborated with
Cisco on its Managed Router solution. This solution provides SMEs with a secure turnkey Internet access
solution that combines Verizon Business access with customer premises equipment from Cisco.
● Verizon offers McAfee’s entire line of enterprise security products and services, including Payment Card
Industry (PCI) compliance services for Level 4 merchants (99 percent of all merchants) that present the
greatest security risk, but also generate a third of all credit card transactions.
● Office Depot provides a 12 percent discount on office supplies to small business customers enrolled in
the Verizon Alliance program.
● FedEx offers savings on FedEx shipping rates through the Alliance Discount Program.
● The New York Times provides small business-related news stories and videos.
“Small businesses need a lot more than email and Internet access to
be competitive, especially in today’s challenging economy. We built the
Verizon Small Business Center to offer small businesses leading-edge
technology tools and business resources to assist them in becoming
more agile, productive, and efficient, all appropriately scaled for the
needs and budget requirements of a small business, and all conveniently
integrated on a single Web portal.”
—Monte Beck, Vice President for Small-Business Products and Services, Verizon
Service Chosen/Strategy
The Verizon Small Business Center is an online, member-based portal that provides applications, information, and
discounted business services to the company’s small business customers. At the Small Business Center, members
can set up a profile using the professional networking module; get access to Verizon products that they have
subscribed to such as Internet service; find discounts on business products and services (Alliance program);
participate in the Verizon Business Link Rewards program (similar to a credit card rewards program); and get access
to news and information relevant to them.
The Small Business Center provides access to integrated business applications such as the Verizon Collaboration
Center, an online workspace. A small business team can use it as an intranet to enable collaboration among
employees and co-workers. Users can share documents and calendars, access email, and manage/track projects.
Some of the other online applications that are available via the Small Business Center are Verizon Online Backup
and Sharing, and Verizon Linked Mail for Business. With the Verizon Web Meeting add-on, SMEs can hold online
meetings. From inside the Collaboration Center, one can also subscribe to a list of third-party collaboration tools
such as eXpresso, an application that allows one to share Excel spreadsheets and other documents securely online.
The other key element of Verizon’s small- business strategy is selling its FiOS TV and FiOS Internet Service for
Business, its fiber optic network, which offers download speeds of up to 50 mbps. Verizon is also offering the
managed apps WebOffice combination to SMBs, looking to capture companies ready to go online. In addition,
free Wi-Fi hot spot access at more than 14,000 locations nationwide are also available to every Verizon business
broadband customer.
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3. CLUE Case Study
Success Factors/Metrics/Monetization
● The Verizon Small Business Center increased the page views of the unit’s business portal by up to
25 percent.
● Verizon Communications’ revenue increased more than 4 percent during fiscal 2008 to US$97.3 billion, up
from $93.4 in 2007. The increase was primarily from its domestic wireless business segment, whose revenue
increased 12.42 percent in 2008, while its wireline segment reported a revenue decrease of 1.8 percent.
Net income in 2008 rose 16.4 percent, from $5.5 billion in 2007 to $6.4 billion in 2008. Once again its
wireless division was the primary cause of the increase in net income as its operating margin increased
from 26.9 percent to 28.4 percent, while its wireline operating margin decreased from 9.1 percent in 2007
to 8 percent in 2008. Verizon’s wireline business segment has experienced increased competition as
customers substitute to wireless products or less expensive non-wireline services such as VoIP.
“What we’ve created with the new Verizon Small Business Center is
similar to what an information technology department would build for
a large corporation, but at a fraction of the price.”
—Monte Beck, Vice President for Small-Business Products and Services, Verizon
Additional Notes and Comments
Company Background: Verizon Communications is a U.S. telecommunication company and provider of fixed-line,
wireless, television, and data services. Through a joint venture with Vodafone, it also operates Verizon Wireless,
the largest wireless carrier in the United States, which represents 97 percent (89 million) of their customer base
as of 3Q09.
Awards
● FiOS Internet for Business Receives SMB Excellence Award from Global Technology Research
● http://newscenter.verizon.com/press-releases/verizon/2009/verizon-fios-internet-for.html
TV Commercial
● Verizon Commercial FiOS, ‘Garage band’
● www.youtube.com/watch?v=yz9zYV-BnIQ
Recent News (BizPaks)
● May 19, 2009. Verizon Business is putting together integrated service packages, mainly targeting single-
location, small to mid-size enterprise customers under the “BizPaks” brand name. “VoIP BizPak” bundles
Verizon Business’ Internet Dedicated Access (IDA) with the carrier’s Hosted IP Centrex or IP Integrated
Access; “PRI BizPak” bundles IDA with ISDN and local/long-distance calling plans. BizPaks include managed
installation and a host of value-added Internet options. Verizon Business has also announced that Verizon
Wireless’ 3G services now support secure access to its Private IP service.
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4. CLUE Case Study
References
www.currentanalysis.com/h/2009/Verizon-BizPaks.asp
http://investor.verizon.com/financial/quarterly/pdf/08_annual_report.pdf
www.mindbranch.com/listing/product/R759-11886.html
http://biztech2.in.com/india/news/smesmb/verizon-business-offers-managed-router-soln-for-sme-internet-
access/66172/0
www.currentanalysis.com/h/2009/Verizon-McAfee-Cloud.asp
http://smallbiztrends.com/2009/04/verizon-small-business-center.html
Printed in USA FLGD 08867 02/10
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