Verizon Enterprise Solutions rolled out a new pay-as-you-go pricing scheme for its enterprise-focused virtualization framework.
The pricing model allows enterprise customers to tap into the carrier’s Virtual Network Services (VNS) platform through a single line-item pricing model. The new model – dubbed “One” – offers hardware, software, and management services on an as-needed basis. Companies can also elect to use centralized contracting and billing.
Chad Thompson, senior manager of product development at Verizon, said the service relies on the carrier’s universal customer premises equipment (uCPE) as the basis for service delivery.
Thompson said that enterprises would previously need to order and pay for their applications, management, and CPE separately. The new offer consolidates the procurement and billing aspects into “functions you are running.” He noted software-defined wide-area networking (SD-WAN) and security were two early favorites of enterprise customers.
“If you are looking for SD-WAN or security, we will optimize what is needed on the back end and have the service shipped out to the CPE,” Thompson said.
Billing is handled on a monthly basis instead of through traditional billing cycles. Thompson said the move allows enterprise customers greater flexibility in terms of their service usage and avoids vendor lock-in.
Verizon will continue to offer its legacy pricing model tied to longer-term contracts, but Thompson didn’t think those would have much appeal next to the new models. “Some customers are looking at this over a 10-year period, and buying their equipment outright might be less expensive over a longer term versus leasing,” he said. “But, with how fast things are moving, that doesn’t really make sense anymore.”
Thompson likened the new model to what has happened in the mobile device space with customers moving toward leasing their devices on a yearly basis.
The new pricing scheme also provides some insurance for enterprises in working with newer vendors in the space. Thompson explained that Verizon is working with a number of new players, which might be risky for enterprise customers.
“This allows them to take advantage of these new vendors in a virtual form, which has much less risk,” Thompson said. “If a vendor goes bankrupt, or if Cisco buys them out, that can cause some issues. We are seeing some of this in the industry, especially in the SD-WAN space with the recent VeloCloud and Viptela deals.”
Vickie Lonker, vice president of network and virtual solutions for Verizon, had previously described VNS as “not just the software, but the framework to manage and support that software giving customers visibility and control that they didn’t have before and in a way that they can consume through a portal that is very agile and dynamic. You can spin up software a lot quicker than a rack-and-stack and install hardware.”
Support for VNS began two years ago with the carrier’s launch of SD-WAN services. That was followed by the launch of virtual network services last year, using what Lonker termed “gray boxes that were on the customer premise.”
Verizon recently extended VNS availability to the Amazon Web Services (AWS) cloud. The deal provides AWS users with SDN-based services to help control network and security policies from the enterprise edge directly into their Amazon Virtual Private Cloud (Amazon VPC) instance.
WAN Optimization, UC Next
Looking ahead, Thompson thinks WAN optimization will gain traction among customers through the VNS service. He noted that many think SD-WAN is viewed as an alternative to WAN optimization, but that by virtualizing WAN optimization and hosting it on a CPE, customers would be able to garner immediate performance and cost benefits.
Thompson also noted that Verizon had some short-term plans to integrate unified communications (UC) into the VNS platform as well. “I think we have a whole roadmap of exciting UC functions for 2018,” Thompson said. “With SDN and NFV it makes it much easier to roll those out. You don’t need a doctorate and some rocket ships to do it.”