BellSouth: Betting On Copper And VARs

Not surprising for a regional telco that covers the en-tire southeast from North Carolina to Florida and west to Alabama. After all, the company owns the infrastructure that carries all the Internet traffic from local business subscribers to the central offices, and from there to the vast world of the Internet.

But don't think BellSouth is a stodgy old-line engineering-based company only. "Our business customers have told us they both want and need connectivity and value-added services," says Bell-South Managed Network Solutions president Donna Lee. "In much the same way that companies today can't operate without telecommunications, the Internet has become a basic necessity for doing business. Businesses now look to the Internet to increase revenue, gen-erate customer awareness and improve operational efficiencies. And that is only the beginning."

Doug Waid, BellSouth marketing director of Internet and IP services, cites operational excellence, superior network performance and customer care as the cornerstones of his Internet business. He is responsible for the P&L for such services for large and midsize companies in BellSouth's operating region.

Much of BellSouth's Internet business goes through resellers. The company also has a direct sales force. "It's a good partnership. They don't compete with me," says Jim Williams.

Williams is CEO of Digital Connec-tions Inc. (DCI), a 60-employee shop in Memphis. The 6-year-old company has many employees who came from the data communications industry, and therefore offers skills that are a nice counterpoint to those of BellSouth. DCI sells full network solutions to customers, including connectivity to the BellSouth network, and access to the Internet by arrangements with ISPs in other cities.

"Our portfolio of access methods includes frame relay, ISDN BRI and ATM," Waid says. "We're trying to provide the services that customers need today and to carry them into the future."

BellSouth also offers Web hosting and e-commerce services. But, "the growth has been in access," he adds, "and now hosting is growing fast."

Waid says customers now want to put mission-critical functions up on the Internet. That leads to great demand for e-commerce services that BellSouth and its resellers can supply.

Lee expects the demand for add-on services to increase. "As our customers gain basic connectivity and over the next few years begin this anticipated

e-business ramp-up, we expect demand will undoubtedly continue to soar for current service offerings. However, we will also continue to expand our services portfolio to meet our customers' explosive e-business needs."

Resellers should also be able to share in that growth. "VARs are relationship-oriented," says Waid. "They build relationships with their customers that they want to maintain, so they can thrive on the Internet."

Working as a team with BellSouth, VARs can deliver customer care to BellSouth's customers. "The customer sees a unified force from the vendor," Williams says. "We bring some things to the table that they cannot, such as expertise in certain geographical areas. We see BellSouth as an account executive, a team of engineers and designers offering a diverse portfolio of voice, Internet and high-end data services, and it uses us as part of the team to supply expertise they may not have."