DENVER, March 24, 2000 - KPNQwest and IBM today announced a ten-year initiative to deliver next generation e-business services and applications throughout Europe. At the core of the initiative is the creation and deployment of the most extensive and sophisticated network of Web hosting centers, called KPNQwest CyberCenters. The hosting alliance, believed to be the largest of its kind in Europe, is expected to generate more than $4 billion in revenues, to be split equally between the two companies.
Joseph P. Nacchio, Qwest Chairman and CEO and Chairman of KPNQwest, said "We are extremely pleased about the opportunity to enhance Qwest's global web hosting product portfolio by expanding our relationship with IBM to include our KPNQwest partner as part of our overall agreement."
KPNQwest has selected IBM Global Services to build, manage and provide operational support for up to 18 new KPNQwest CyberCenters connected to KPNQwest's high capacity fiber-optic EuroRings network. IBM will lease 25% of the available space in the centers to host their customers' e-business and business-to-business (B2B) initiatives.
The first six KPNQwest CyberCenters, each of about 33,000 square feet, will be in Frankfurt, Paris, Munich, Stockholm, Milan, and London. These centers will be phased in by the end of 2000. Typical customers for the range of services offered by KPNQwest and IBM within the CyberCenters are Internet Service Providers (ISPs), Application Service Providers (ASPs), dot.com companies, small and medium enterprises (SMEs), multinationals, traditional 'bricks and mortar' companies moving to web-based operations and organizations involved in e-commerce.
Commenting on the alliance, Jack McMaster, CEO and President KPNQwest, said: "This initiative demonstrates that the predicted convergence of next generation network and IT services is happening in Europe. The combination of IBM's industry-leading IT services and KPNQwest's modern fiber-optic network and CyberCenters will accelerate the ability for Europe's businesses to offer improved services and e-commerce solutions."
Frank Kern, general manager, Professional Services, of IBM Global Services Europe Middle East and Africa, said: "The e-business hosting and B2B network services market in Europe is exploding and is expected to be worth $52 billion by 2003. IBM will draw on our experience in managing 133 data centers around the world to ensure this agreement with KPNQwest is successful in providing companies across Europe with the bet-your-business support they need. Our alliance with KPNQwest demonstrates how leaders in the information technology and communications industries can collaborate to help companies worldwide become e-businesses."
Customers will benefit from a full portfolio of next generation e-business network and hosting services. These range from managing and operating customer servers in the centers, to hosting complex websites and building new network-based applications for larger customers. The CyberCenters will provide complex hosting services to large and medium customers and co-location capabilities for the high-growth market of customer managed services as well as IT and application support services. In addition, they will provide a full range of network services, such as managed bandwidth, Internet connectivity and IP (Internet Protocol) transit under strict service level agreements.
KPNQwest (NASDAQ & ASE: KQIP) is a leading facilities-based, pan-European provider of data-centric Internet protocol-based services to business customers. It is deploying a technologically advanced fiber-optic network connecting 46 cities throughout Europe, enabling the company to provide a broad range of high-speed, high-quality data-centric Internet protocol-based services and other advanced telecommunications services, including DSL local access connectivity. The company is one of the largest businesses ISPs in Europe with operations in 14 countries. KPNQwest has 12 CyberCenters? and plans to construct up to 18 mega-CyberCenters? on its high-capacity fiber-optic network to provide web-hosting, application sharing and telehousing services. Website: www.kpnqwest.com
IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. IBM offers a wide range of services, solutions and technologies that enable telecommunications service providers and equipment suppliers to take full advantage of the new era of e-business. IBM Global Services is the world's largest information technology services provider, with 1999 revenues of more than $32 billion. Services is the fastest growing part of IBM, with more than 138,000 professionals serving customers in 160 countries. IBM Global Services has 133 data centers around the world. The 65 centers in Europe, Middle East and Africa occupy 110,000 square meters, manage 6,000 servers and 219 terabytes of data keeping thousands of businesses running 24 hours a day, seven days a week. For more information on IBM, visit www.ibm.com
This release may contain forward-looking statements that involve risks and uncertainties.These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest and KPNQwest with the SEC, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, failure to maintain rights of way, financial risk management and future growth subject to risks, Qwest's ability to achieve Year 2000 compliance, adverse changes in the regulatory or legislative environment, and failure to complete the merger with U S WEST and achieve projected synergies and financial results timely or at all. This release may include analysts' estimates and other information prepared by third parties, for which neither Qwest nor KPNQwest assumes any responsibility. Qwest and KPNQwest undertake no obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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