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Wednesday, 18 February 2009

NEW YORK (Reuters)—Verizon Communications sees the weak economy helping sales of an on-demand computer hosting service it plans to launch this summer, an executive for the telecom service provider said on Tuesday.


Verizon said it would let customers order computing capacity for applications such as retail websites on-the-fly instead of having to commit to rent computer space longer term under Verizon's current hosting service model.


Nancy Gofus, senior vice president for Verizon Business Products, said she sees the service being attractive to customers who are looking to conserve cash but still need extra computing power for short-term projects or busy seasons, like the holiday shopping period for retailers.


While Verizon had planned to launch the new service regardless of the economic environment, Gofus said the recession may mean it takes off faster than it would have.


"The economy just adds a degree of urgency," she said at a Verizon Business media event in New York.


While some business customers may be worried about embarking on big telecommunications projects in the weak economy, Gofus said they are going ahead with projects from which they expect a return on investment in a year or so.


Gofus said technology managers in corporations are still saying "if it's got a great return, I can do it."


Verizon, which generates about $21 billion annual revenue from its business division, also said on Tuesday that it had signed agreements with seven network equipment makers to make it easier for clients to get hold of telecom network gear.


It made agreements with companies such as Cisco Systems Inc, Juniper Networks and Avaya.


(Reporting by Sinead Carew, editing by Matthew Lewis)


(c) Reuters 2009. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.




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