Cost saving opportunities continue to be a driving factor for telecommunication operators looking to take advantage of network virtualization technologies in their attempt to mimic the operation models of web-based operators. Verizon Communications is the latest to make a connection.
On the heels of a self-described atypical quarterly performance, Verizon’s management said it was keen to drive down costs across the organization and increase market opportunity, with plans around virtualization technologies like software-defined networking (SDN), network functions virtualization (NFV), and cloud.
Those efforts were noted during a company briefing with the financial analyst community, with most of Verizon’s key leadership on hand, and the company briefly touching on plans to take advantage of new technology to drive new business opportunities.
In laying out areas of planned network streamlining, John Stratton, president of customer and product operations at Verizon, cited SDN and virtualization as a cornerstone of those efforts to drive down the cost of carrying data across its network and opening up new markets.
“We have talked about network virtualization, automation, and streamlining,” Stratton said. “Again, opportunities to reduce the cost per bit there.”
Verizon has been slowly building efforts around network virtualization capabilities, including internal efforts and work outside the organization with various vendors and trade groups. Those efforts gained attention in 2015 when the carrier announced its network transformation efforts centered on SDN.
Verizon earlier this week unveiled plans for an open source white box solution for its universal customer premise equipment portfolio targeted at enterprise customers looking to save investment on separate hardware appliances for virtual network functions (VNF) such as software-defined wide-area networks (SD-WAN), security, routing, WAN optimization, and other network function that can be virtualized.
Cost savings have become a core tenant for telecom operators moving toward virtualized platforms.
Sprint earlier this month touched on the use of network virtualization technologies in driving down carrier capex, with CFO Tarek Robbiati linking savings to the result of “software-driven deployments of capacity through carrier aggregation and surgical deployment of small cell.”
CenturyLink put a number to its efforts, with CEO Glen Post saying the company remained on track to see at least $200 million in annual capex reduction tied to the build-out of its virtualized network, with the full build-out still scheduled for 2019. Post also highlighted CenturyLink’s product lineup, including its SD-WAN platform that he said customers were demanding.