May 28th 1999: EXCLUSIVE! Qwest revealed an imminent alliance with a big five consulting firm as it responded to an attack by rival ASP USi this week.

Speaking to ASP News Review in an exclusive interview on Tuesday (May 25th), John Charters, VP of business development for Qwest's ASP division, confirmed the company is preparing to announce a tie-up with a top-tier systems integrator to implement enterprise applications for its ASP customers. "You'll see Qwest aligned in a very big way with one of the big six consulting/accountancy firms to deliver [those services]," he said.

Chambers was responding to comments by Chris McCleary, chairman and CEO of Annapolis MD-based USinternetworking (USi), in a statement issued to customers last week. Referring to Qwest's recent announcement of SAP application services, McCleary had written:

"Since respected integration companies like KPMG and Andersen find the delivery of SAP challenging, it seems odd that a phone company would be able wake up one day and resolve those well known SAP implementation issues with 'CyberCenters(sm)'."

While conceding that IP carrier Qwest is a "world-class long distance company", McCleary went on to imply that its reliance on partnerships to deliver applications would hamper its ability to honour service-level guarantees. The statement was sent out to subscribers of USi's email mailing list and featured on its web site.

Chambers, who until late last year was VP of Internet services at USi's telco partner US West and knows McCleary well, was unfazed by the critique.

"We've obviously touched a nerve. He's obviously concerned his space is filling up with competitors. If I was in his shoes, I'd do the same thing," he said.

He added that Qwest believes ownership of its network infrastructure contributes to its ability to guarantee service levels as an application services provider. "Chris [McCleary] is nervous. What we have, he doesn't have, and that's the ability to manage it end-to-end," he said.

McCleary's statement also compared USi to rival Peoplesoft ASP Corio, which is based in Redwood City CA. McCleary argued that USi can provide a higher level of service when resolving problems because it operates its own data centre rather than subcontracting this part of its infrastructure as Corio does. But he conceded that this increased USi's costs. " USi probably would charge more for the same PeopleSoft application, thus creating a cost/benefit tradeoff decision for the customer," he noted.

o In a separate development, Qwest and BellSouth yesterday announced they have closed the $3.5bn deal first announced last month for BellSouth to take a ten percent stake in the carrier.