Verizon Enterprise chief: We're headed for cloud computing's A-list

President John Stratton says ability to build infrastructure at scale presents huge opportunities for Verizon in mobility, security, Internet of Things

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Of course. We look at data analytics and database as a service as complementary elements in our overall superstructure, these are strategic for us. These are very important for us. We have had dozens of different implementations, we've gained some competency here. One of our guys developed an illustration for me of a particular solution that we provided to a heavy equipment manufacturer, and you ask: What was involved in delivering that condition-based maintenance solution? It's perfect because it's every one of these assets was put into play. But there's also a front-end opportunity in terms of the business advice. It's process re-engineering. Our clients are coming to us and asking us the questions: "I see it, I hear about it, I understand people are doing things, but I don't know what I can do. I don't know what to do here exactly. Why would I invest? What's the TCO for me? How do I capture value from this?" That's where we are beginning to gain some real competency. So for me [it's about] commercializing that. We have a reasonable professional services business. We don't disclose specifics, but it's not a bad business. It's principally security network integration. We see machine-to-machine as another great opportunity here, because the market is hungry for information. Our claim to fame there is not academic. When we deliver that front-end business process consultation, we're also the guys who do the integration and implementation. You need maybe 10, 12, 15 players embedded in those solutions because of the breadth of them. We fuse those together and then in some cases we do the ongoing management as well. That's a real opportunity. I'm not sure if it's 12 billion or if it's 30 billion, but it's a big number and we're trying to invest ahead of it.

This is a question for our readership. Should IT be leading that Internet of things discussion? Is IT leading that in those cases that you were talking about?

Not as often as you might think. We have found that we end up in many cases becoming the technology consultant on these projects -- in concert with the CTO more than CIO, interestingly, depending on the industry. But it's usually business-led because it's solving a problem. We've been at this quasi-recession now for quite a while and people have taken down all of the obvious costs. Now you need to do reformation of your business processes to unlock the next level of value. And it's not just that, it's actually opening new markets. I'll give you an example in UBI, usage-based insurance. You go from traditional actuarial tables that are basically demographically driven to actually usage-based. If you think of the high value pool of insured customers for our insurance partners, it's a finite number. There's a real battle for share in that group. But this ability to do real-time analytics against that, and to be able to have a scalable and dynamically adjustable rate schedule that is a perfect correlation of risk to cost, it's pretty interesting for these guys. The value that can create for them on the bottom line is pretty meaningful. I mentioned condition-based maintenance. Again, predictive analytics applied to just-in-time delivery of parts and maintenance. The value from in-service uptime, the value from extending the serviceable life of the subcomponents in heavy machinery, these are a big deal. I think we're just getting going here. But it is the business that's driving it.

My last question is: What's ahead? What should people expect in the next year?

I think acceleration is what I would say. I keep calling it friction, but as we remove barriers and friction and enable these technologies, I think the speed is going to increase. That is very, very exciting. It's not always technology barriers, sometimes it's commercial model inertia, and not always at the customer end. I know that you get around a little bit, and as you think about the players and the ecosystem, those are hard, hard questions. How will they evolve their commercial model? Well, you know what? Not answering the question is answering the question. At a certain point you've got to say: "I've got to take a leap here because I don't know where it's going but I know it's not going to be here.' I think we're getting to a point now where we're getting ready to tip that over, and I actually see in '13, '14, some acceleration, which is exciting.

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