Qwest Expects Agreement to Generate Approximately $260 Million Of
Incremental Services Revenue; Loudcloud Significantly Expands Distribution
Channels and Reduces Data Centre Costs
August 28, 2001 -- Qwest Communications International Inc. (NYSE: Q), the
broadband communications company, and Loudcloud, Inc., (NASDAQ: LDCL), the
leading managed services provider (MSP), today announced a strategic
alliance that will deliver to corporations an end-to-end, flexible and
scalable managed services solution, from the network through the hosted Web
application. The two companies will jointly offer one of the most reliable,
stable and cost-efficient outsourcing solutions available today. Qwest
expects the agreement to generate approximately $260 million of incremental
services over the next five years.
Under the five-year agreement, Loudcloud and Qwest will co-market and sell
each other's services, leveraging the benefits of Qwest's nationwide sales
channel and Loudcloud's leadership in the MSP sector. Loudcloud becomes
Qwest's preferred provider of hosting and complex Web application management
services, and Qwest becomes Loudcloud's preferred provider of data centre
and network services to both companies' customers.
Qwest and Loudcloud will jointly deliver an end-to-end managed application
hosting solution by leveraging Qwest's North American and European
CyberCenters(sm) and Loudcloud's managed services offering. The companies
will offer the solution to both existing and new customers that want to
outsource the operational and technical tasks associated with complex
Internet and Web-based application management. The two companies will
jointly market and sell the solution, leveraging the benefits of Qwest's
worldwide sales channels and Loudcloud's leadership in the MSP sector.
"Customers are looking for reliable, cost-effective managed services
solutions that have the ability to grow with their business," said Joel
Arnold, executive vice-president, Qwest Global Business Markets.
"Loudcloud's industry-leading management services complement Qwest's
existing portfolio, offering customers a one-stop shop for infrastructure
management. We are pleased to be working with Loudcloud to deliver one of
the industry's only end-to-end packages of infrastructure and Web management
"The ability to take advantage of both Qwest's leading data centre and
network capabilities on an as-needed basis and its sales and marketing force
will allow Loudcloud to better service customers, expand our reach to new
customers and reduce the company's cost base," said Ben Horowitz, chief
executive officer and co-founder of Loudcloud. "We are delighted to be
entering such a committed partnership with Qwest based on its strategic
vision, technical excellence and quality service."
As part of the agreement, Loudcloud will host the majority of its new
clients in select Qwest CyberCenters. The companies will deploy Loudcloud's
Opsware automation technology in these data centres to provide managed
services. Loudcloud will occupy space in these facilities on a "just in
time" basis as new customers are added and as capacity needs grow. The
agreement also is backed by revenue and volume commitments between the two
Qwest will also transition the management of its corporate Internet site,
Qwest.com, to Loudcloud. Qwest.com contains approximately 15,000 pages and,
in a typical month, receives almost 14 million page views, and processes
more than 8,500 orders.
Qwest Communications International Inc. (NYSE: Q) is a leader in reliable,
scalable and secure broadband data, voice and image communications for
businesses and consumers. The Qwest Macro Capacity® Fiber Network, designed
with the newest optical networking equipment for speed and efficiency, spans
more than 113,000 miles globally.
For more information, please visit the Qwest Web site at http://www.qwest.com
Loudcloud is the leading managed service provider, offering a new solution
for outsourcing global Internet operations for enterprise companies,
application service providers and large-scale Internet businesses. Loudcloud
moves beyond basic hosting or consulting services with its unique
Opsware(tm) technology to automate, scale, and monitor Internet operation
functions previously done by hand. Loudcloud manages its infrastructure
network via a worldwide network of data centres and Network Operations
Centres (NOCs) located in North America and Europe.
For more information on Loudcloud, please visit our Web site at http://www.loudcloud.com
This release may contain projections and other 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 Loudcloud with the Securities and Exchange Commission,
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, volatility of the companies' stock prices, intense competition in
the communications services and managed services markets, changes in demand
for products and services, dependence on new product development and
acceleration of the deployment of advanced new services, such as broadband
data, wireless and video services, which could require substantial
expenditure of financial and other resources in excess of contemplated
levels, higher than anticipated employee levels, capital expenditures and
operating expenses, rapid and significant changes in technology and markets,
adverse changes in the regulatory or legislative environment affecting
Qwest's business, delays in Qwest's ability to provide interLATA services
within its 14-state local service territory, failure to maintain rights of
way, and failure to achieve the projected synergies and financial results
expected to result from the acquisition of U S WEST timely or at all and
difficulties in combining the operations of Qwest and U S WEST. This
release may include analysts' estimates and other information prepared by
third parties for which Qwest and Loudcloud assume no responsibility. Qwest
and Loudcloud 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.
Loudcloud and Opsware are service marks and trademarks of Loudcloud, Inc.
All other product names, service marks, and trademarks mentioned herein are
trademarks of their respective owners.
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