Verizon Business recently completed a 1,000-site managed SD-WAN deployment for the Commonwealth of Virginia that builds on growing – and needed – momentum for the telecom giant’s enterprise- and government-focused operations.

The Virginia deployment is targeted at expanding the performance and capacity of the state’s network. Virginia CIO Bob Osmond noted in a statement that the work was part of the state’s plans to “digitize and modernize” its infrastructure.

“We recognized that we had to transform our network to ensure that agencies have the connectivity they need to digitize and modernize,” Osmond said. “Our core infrastructure services that provide messaging, data centers, end user devices, cybersecurity and network are all being aggressively improved for the benefit of Virginia's executive branch agencies and our Virginia residents and constituents.”

The deployment taps into Verizon’s long-standing work with Cisco. This includes the carrier offering various managed SD-WAN options using the vendor’s Viptela and Meraki platforms.

The carrier added that the managed SD-WAN deployment will also support public and private networks, which “allows government agencies to leverage the power of cloud services while maintaining the highest level of security.”

Verizon is competitive in a competitive market

Verizon has repeatedly been ranked as one of the world’s leading managed SD-WAN providers. The carrier works with a handful of vendors including VMware, Versa, Fortinet, Hewlett Packard Enterprise (HPE) Aruba and Zscaler.

Gartner placed the operator in the “leaders” quadrant in its latest ranking of global network service providers. The research firm lauded Verizon’s inclusion of managed secure access service edge (SASE) options, but also dinged the carrier for “elevated WAN connectivity pricing and is inflexible in contract negotiations, which has led to increased customer dissatisfaction.”

Cisco is also part of many of those rankings.

AT&T last year deepened its work with Cisco to include increased security for SD-WAN services and could add the ability to integrate mobile 5G and fiber broadband to more enterprise customers.

William Eborall, assistant VP of product marketing management at AT&T, said that AT&T’s deeper work with Cisco is based on the carrier’s push toward simplifying its enterprise offerings.

“When you do a lot, it’s difficult to do it very well and to do it as fast-paced as this industry and as fast as the software changes, as fast as the technologies are collapsing and integrating. I think that also creates a challenge to continue to scale across a broad set of vendor technologies and continue to innovate our own management ability,” Eborall said. “I think Cisco is a classic example of what we’re trying to do. It’s going to be ‘do more with less,’ and picking vendors that we can truly invest in, create new unique things in the marketplace. To do that it takes a lot of investment, not just financial, but resources and time to build out those unique capabilities.”

Verizon Business keeps rolling

The Virginia deal is also a big win for Verizon Business, which has spent most of the first part of the year attempting to stabilize its operations.

Verizon Business includes the carrier’s wireless and wireline services targeted at enterprise and public-sector customers. Those services include its ThingSpace IoT, 5G multi-access edge computing (MEC), private 5G, security, managed services provider (MSP) and Virtual Network Services (VNS).

Verizon earlier this year slashed the value of its business operating unit, citing a downturn in the division that highlighted the company’s ongoing challenges in converting that business toward new technology opportunities.

Verizon in a Securities and Exchange Commission  (SEC) filing stated that the devaluation was part of the carrier’s most recent five-year strategic planning review. That review found a notable downturn in its business unit over the past year, which resulted in Verizon recording a $5.8 billion impairment during the fourth quarter of last year for that operating unit.

Verizon specifically cited “secular declines as well as continuing competitive and macroeconomic pressure, in wireline revenue across its customer groups.”

“In the fourth quarter of 2023, in connection with its annual budget process, Verizon completed a comprehensive five-year strategic planning review of its business reporting unit, resulting in lower financial projections compared to the prior year five-year strategic planning cycle,” Verizon said. “The revised projections were used as a key input into the business reporting unit’s annual goodwill impairment test performed in the fourth quarter of 2023. The impairment test determined that the fair value of the business reporting unit was less than its carrying value.”

That underperformance was highlighted by Verizon’s most recent earnings release where its business operations reported a 3.6% drop in revenues for 2023 compared with 2022, and operating income fell a more substantial 24% year over year.

To help combat this malaise, Verizon Business CEO Kyle Malady recently stated that the operating unit would shut down “products and services that are not helping us grow.”

“This will allow us to refocus resources in the areas that will move the needle for us going forward,” Malady said during the carrier’s recent sell-side analyst meeting. Malady cited Verizon Business shutting down its BlueJeans video conferencing service as an example.