Business News – Qwest, IBM Form Alliance to Build Data Centers

Posted: 05/2000

Business News

Qwest, IBM Form Alliance
to Build Data Centers
By Ken Branson

Qwest Communications International Inc. ( and IBM Corp.
( will build 28 data centers throughout the United States during the next seven years.

Company officials say they should realize $5 billion in revenue from the centers–Qwest for providing network services to IBM, and IBM for offering the complex hosting services as an anchor tenant in the centers.

Officials say Qwest will own the centers, which will be operational this year, in Dallas; Philadelphia; Sterling, Va. (suburban Washington, D.C.); and San Jose, Calif.

Qwest already operates what it calls “CyberCenters” outside the IBM agreement. It expects to have 14 of them operational by the end of this year.

Also renting space in the Qwest/IBM centers will be Qwest Cyber.Solutions LLC, the joint-venture application service provider that Qwest and KPMG LLP ( formed earlier this year.

Qwest remains in the midst of a complicated and controversial acquisition of US WEST Inc. ( Company officials say the merger and the IBM arrangement will not impact each other. They concede, however, that in cities within US WEST territory–Seattle, for instance–Qwest won’t offer long-distance service to the new CyberCenter until it receives Section 271 approval from state and federal regulators.

IBM and Qwest say they will provide “the widest spectrum of e-business services ever to be offered under one roof–from collocation, to complex integrated web hosting solutions, to application service provider platforms.”

Lew Wilks, Qwest’s president-Internet and multimedia markets, adds that his company is moving away from mere collocation and toward complex hosting as fast as it can.

“(Collocation) only comprises about 20 percent of our business now,” he says.

Wilks adds that the IBM/Qwest alliance makes possible “end-to-end control of applications and services, network infrastructure and hosted environments as one managed resource.”

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