Sterling Commerce, a recently acquired subsidiary of SBC, partnered with Commerce One to combine its E-marketplace services and products with Commerce One's E-procurement software. SBC and Sterling plan to offer the combined products, along with Microsoft Exchange and other applications, through a hosted application service provider to their 3 million business customers.

The data center that SBC is developing with Cisco will open July 31 in Dallas, selling co-location, shared, and dedicated hosting services. SBC anticipates that data communications and services will account for 70% of its revenue growth for this fiscal year.

SBC is likely to make more such announcements in coming months as it expands its E-business efforts, says Jeff Kagan, an independent telecom industry analyst. "SBC is evolving from a regional phone company to a national and even global data company," he says. "To be a data company and serve corporate customers, you have to be able to help those customers transform the way they do business and interact with their customers."

-- Tischelle George