Monday, July 30, 2007

Verizon snags $100M state VoIP deal

By Catherine Williams

Verizon Communications Inc. has won a five-year, $100 million contract to roll out voice over Internet protocol (VoIP) equipment and services to upgrade 24,000 analog-based telephone handsets for the Bay State's largest agency.

Massachusetts officials say Verizon's contract covers VoIP system installation and service for the Massachusetts Executive Office of Health and Human Services over the next 18 months, and includes a subcontract to California-based Cisco Systems Inc. for its VoIP hardware.

Because VoIP telephone service uses the Internet as its global telephone network over broadband or DSL connections, most telecom service providers offer calling within the country for a fixed fee and a per-minute charge for international calls that is lower than analog service. Basic VoIP features include caller ID and voice mail. The state's VoIP contract, two years in the making, singles out other, specific VoIP services such as videoconferencing features, according to state documents.

Neither Verizon nor state officials would provide additional details. The state's acting CIO Bethann Pepoli, however, said state officials expect to finalize details of the Verizon contract within the next few weeks. No word yet whether officials plan to extend VoIP service to the other 149 state agencies.

Leading the VoIP project for the state will be Anne Margulies, named this week as the state's CIO by Gov. Deval Patrick. Margulies, a veteran technologist from MIT and Harvard University, is expected to take over in September for Pepoli, who plans to return to her role as deputy CIO.

This project is significant because of its size, said Ray Campbell, executive director and CEO of the Massachusetts Health Data Consortium in Waltham. Campbell also serves as a member of the IT Advisory Board to the Massachusetts Information Technology Division.

"State government is a huge technology delivery organization," said Campbell. "Tying voice data with data networks is money well spent."

A recent study by Forrester found the still-emerging VoIP market lacks clear leaders, but names AT&T and Verizon as the "strongest of the strong performers," with Qwest and Sprint following as "contenders."

Lexington-based IT services contractor ZTech Associates Inc., which specializes in Cisco-based VoIP technology, was among a handful of local VoIP companies to bid for a piece of the contract in a process that began in 2005.

ZTech, which employs 20 workers and was founded in 1989, bid as a subcontractor but dropped out of the running several months later because the bidding process took too much time and too many resources, said Zeus Estrada, ZTech's CEO.

"The best way of penetrating this process is through partnerships," said Estrada.

Verizon has yet to reveal which of its integrator partners would work on the contract, and declined to estimate how long the project would take to get up and running.