But with the dot-com collapse, and a glut of network capacity, Level 3 is now looking for greener pastures. Recently, Velocita, a potential Level 3 competitor, became the latest in a string of telecom casualties when it filed for Chapter 11 bankruptcy protection. Level 3's new strategy is to combine its sprawling network with two powerhouses of software distribution. It can then in theory offer big companies delivery of commercial software packages, asset management and software licensing, all in a digital format.

In March, Level 3 completed the purchase of Norwood, Mass.-based CorpSoft, more widely known as Corporate Software, for $89 million in cash plus the assumption of $31 pastel blush, grey and blue ink clouds painting iphone case million in debt, It then snagged Dallas-based software distributor Software Spectrum last month for $122 million in cash, The two moves essentially transform Level 3 into a software company--at least in terms of revenue, Analysts estimate that the acquisitions of CorpSoft and Software Spectrum--the No, 2 and No, 3 software distributors on the market--will contribute 70 percent of Level 3's revenue by the fourth quarter of this year, according to a recent Credit Lyonnais Securities report, At the close of the Software Spectrum acquisition, non-telecom employees will outnumber telecom employees at Level 3, Software Spectrum shareholders will vote on the Level 3 deal June 18..

"Perfuming the pig"This has been a trend-in-waiting for some time, said Level 3 executives. The new strategy "creates a whole new animal that's pretty unique in the industry," said Howard Diamond, chief executive of CorpSoft, now a subsidiary of Level 3. But many analysts and market watchers see the strategy as simply a thinly disguised survival plan. "There's absolutely no business synergies today (in Level 3's software distribution plan). That's perfuming the pig," said Jon Oltsik, analyst with Hype-Free Consulting and a former executive with a start-up network operator.

Oltsik and other analysts said Level 3 acquired the two companies in order to meet revenue requirements mandated by creditors, not to build some pastel blush, grey and blue ink clouds painting iphone case software distribution empire, CorpSoft and Software Spectrum reported sales margins of 1.6 percent and 2.2 percent, respectively, for 2001, and were relative bargains due to their low valuation, CorpSoft's Diamond said Level 3, his parent company, has clear intentions: To stay in business, "There's no pretense, Level 3 had some issues in terms of a revenue covenant."..

According to Level 3's quarterly filing with the Securities and Exchange Commission, CorpSoft had $1.1 billion in revenue for 2001. Software Spectrum had $1.2 billion in 2001 sales. Put the two companies with Level 3, which had $1.5 billion in sales in 2001, and the company is likely to keep creditors at bay for a while, said analysts. Without the acquisitions, however, Level 3 would have to face its creditors. Level 3 is burdened by $6 billion in long-term debt, according to company financial statements. The company must have $2.3 billion in sales by the fourth quarter of this year in order to stave off creditors who have tied its credit line to revenue growth, according to the company's annual report to shareholders.