Verizon Communications Inc. (NYSE:VZ) has reported that it would be switching its services to software defined network (SDN) architecture, by working in partnership with five key vendors so that it can deploy these services by next year.
To begin with, the company would be focusing on migrating its legacy elements and functions to software-based platforms for its wireline network. The company’s vice president of network planning, Brian Higgins said that “What we are doing is taking a look at end-of-life platforms that are sitting out there. If you think about the wireline side, we may have a number of platforms that are end of life and that’s a great opportunity to go in, and instead of putting in a brand new piece of hardware, we’re taking a hard look if we can migrate that over to software.”
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The company has already made live lab environments in San Jose, Tampa and Waltham, as well as has commercial data center environments on both the East and West Coasts. Verizon Communications Inc. (NYSE:VZ) believes that SDN, an advanced approach to design, build and manage communications networks, is the future.
Meanwhile the management believes that shifting SDN would be a challenge as mobility and cloud continue to make networking more complex.
Verizon’s head of network platforms and managed services, Shawn Hakl said “Put simply, SDN lets enterprises keep up with the changing nature of their businesses, enabling them to be more responsive to users, customers and market opportunities. The demands on networking today are many and include the proliferation of mobile devices, application/data movement to the cloud; greater traffic variability; explosion of cyberthreats and changes in standards/chipsets. Enterprises must keep up with these demands in order to innovate and compete.”
Verizon collects vendor partners
Five key vendor partners for its new strategy include Juniper Networks, Inc. (NYSE:JNPR), Cisco Systems, Inc.(NASDAQ:CSCO), Alcatel Lucent SA (ADR)(NYSE:ALU) and Nokia Corporation (ADR)(NYSE:NOK). Marcus Weldon, Alcatel Lucent’s chief technology officer said “Verizon shares our vision of a future network that provides seemingly limitless capacity and is able to instantly adapt to the needs of businesses and consumers. We know this can be possible with virtualization, SDN technology and the ability to tap into the power of a strong, tightly paired IP and optical backbone network capable of handling people’s insatiable appetite to connect, share and consume content.”
Jefferies recently reiterated its Buy rating on Verizon with a target price of $54. Verizon delivered a year to date returns of 6.6%, and shares closed at $50.4 yesterday.