DENVER, June 21, 1999? Qwest Communications International Inc. (NASDAQ: QWST), the Internet communications company, and KPMG LLP, a leading professional services firm, today announced that they are forming a joint venture, called Qwest Cyber.Solutions LLC, to provide Internet-based end-to-end application service provider (ASP), application hosting (AH), and application management (AM) services. The venture will leverage existing Qwest and KPMG relationships with Hewlett-Packard, SAP AG and other industry-leading hardware and software providers.
Qwest Cyber.Solutions will have multi-year contracts under management valued at more than $400 million that will provide a base to compete in the global market for applications management that analysts estimate will grow to $25 billion by 2001. The venture is a facilities-based applications service provider with assets of more than $120 million.
The venture will offer customers the broadest set of vendor products available for Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and Back Office solutions in the marketplace today, a state-of-the-art Internet Protocol (IP) broadband network, industry leading CybercentersSMand a starting skill base of more than 450 certified applications specialists.
Qwest Cyber.Solutions will combine strategic assets from both Qwest and KPMG. Qwest owns a 51% stake in the venture, with KPMG owning 49%. Qwest and KPMG are both contributing assets to the venture to accelerate the deployment of these services. Specifically, Qwest and KPMG will leverage existing contracts with independent software vendors for the venture. Additionally, Qwest will contribute domestic and international access to the Qwest Internet ?based fiber network. Additionally, there will be access to the newest Cybercenter hosting facilities giving Qwest Cyber.Solutions customers worldwide access to secure IP connectivity with industry leading service level agreements to their outsourced data and applications.
KPMG will contribute selected methodologies, templates, software and help desk facilities, and the more than 450 applications specialists. KPMG has a well-established track record for fast, efficient, flexible, quality software implementations. The firm has core competencies in delivering solutions for the middle market and providing complete Information Technology and applications management outsourcing, which allows clients to focus on their core business.
"In the last few weeks, Qwest has moved aggressively to establish a leadership position in the applications services sector," said Joseph P. Nacchio, Qwest chairman and CEO. "Our joint venture with KPMG is the capstone of our ASP strategy. Through the venture we will offer customers fully managed and complete end-to-end Internet-based solutions that will drastically change and improve the way organizations operate."
Customers for the venture will include mid-range enterprise organizations seeking network-based applications solutions, and larger enterprises seeking to outsource the management of services to run their businesses. The venture will provide integrated services for Internet-based delivery of mission critical business applications for customers around the world. Applications will be managed and hosted in Qwest's Cybercenters, which are directly connected to Qwest's nationwide IP network.
"Our joint venture with Qwest capitalizes on this explosive new market by creating the industry's first total solution for managed and implemented business applications," said Steve Butler, chairman of KPMG LLP. "Qwest Cyber.Solutions will offer secure, reliable, efficient management of mission-critical business operations for our enterprise customers. Through this venture, customers seeking competitive advantage can realize the benefits of outsourcing applications."
Qwest Cyber.Solutions will be headquartered in Denver, Colorado. John Charters, vice president of Qwest's business development organization, will lead the venture as chief executive officer. Phil Garland, head of KPMG's applications outsourcing, will be chief operating officer. The two companies will soon announce additional staffing appointments. Qwest Cyber.Solutions LLC will initiate service immediately. For customers seeking additional information regarding the services offered by Qwest Cyber.Solutions, please call 1-877- CYBRAPP.
In a separate arrangement, Qwest is engaging KPMG to serve as the system integrator to project manage, build, configure and support Qwest's next generation, multimedia operations and business support systems (OSS/BSS). KPMG will serve as the prime contractor of the project, teaming with Cisco Systems, which will provide network infrastructure. The network will ultimately provide the backbone for Qwest Cyber.Solutions.
Qwest Communications International Inc. (Nasdaq: QWST) is a leader in reliable and secure broadband Internet-based data, voice and image communications for businesses and consumers. Headquartered in Denver, Qwest has more than 8,500 employees working in North America, Europe and Mexico. The Qwest Macro Capacity® Fiber Network, designed with the newest optical networking, will span more than 18,500 route miles in the United States when it is completed by mid-1999, and an additional 315-mile network route that will be completed by the end of the year. In addition, Qwest and KPN, the Dutch telecommunications company, have formed a venture to build and operate a high-capacity European fiber optic, Internet Protocol-based network that has 2,100 miles and will span 9,100 miles when it is completed in 2001. Qwest also has nearly completed a 1,400-mile network in Mexico.
About KPMG LLP
KPMG LLP is the U.S. member firm of KPMG International. In the U.S., KPMG partners and professionals provide a wide-range of accounting, tax and consulting services. As a provider of information-based services, KPMG delivers understandable business advice ? helping clients analyze their businesses with true clarity, raise their level of performance, achieve growth and enhance shareholder value. KPMG International's member firms have more than 6,700 partners and 92,000 professionals in 157 countries. KPMG's Consulting practice can be found on the web at http://www.kpmgconsulting.com or reached through the firm's site at http://www.us.kpmg.com.
This release contains 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 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 complete the network on schedule and on budget, financial risk management and future growth subject to risks, Qwest's ability to achieve Year 2000 compliance, and adverse changes in the regulatory or legislative environment. This release may include analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or such publicly available information 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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