Carl Roberts, Verizon Global Wholesale: Evolving ecosystems
While some try to extract the last juices from legacy systems, for Carl Roberts, group vice president of Verizon Global Wholesale, it’s time to dramatically redefine the way we do business in wholesale telecoms. He shares his thoughts with Angela Partington.
Carl Roberts is clearly not a man who is content with the status quo. Instead, he is pushing as hard as he can to drive through the changes which will guarantee the success of his wholesale business, and believes that the rest of wholesale should be grappling with the same issues: “The more mature markets are pretty hard, so the growth areas are coming from new business and new services. But everyone is trying to figure out what they are.”
Of course, not everyone in the business has the same foresight. He admits that there are still carriers who continue to focus on voice, trying to get as much out of the commodity as they can. “That’s a challenging strategy, because it doesn’t really end up going anywhere.”
Verizon is streamlining its voice strategy, focussing on the high quality end of the market in a bid to be “efficient and lean and profitable”. That’s not a remotely unusual position for international carriers, of course, but Roberts seems to take real pride in how quick the business has been to respond: “We’re priding ourselves on having taken that decision before the rest of the market, as we try and change the composition of wholesale.”
So for Roberts, the world is moving on. The wholesale market stands on shifting sands and it continues to evolve. The global 24/7 economy is changing he way we all live, and the way we should be conducting business – and although Roberts may be a little reluctant to label this change (“Cloud is just the latest nomenclature”), he has an unshifting sense that things are different in the global marketplace.
In fact, while cloud may be the buzzword in the market, the term that Roberts keeps coming back to is “ecosystem”, almost as if the wholesale community were brimming over with new life and organisms, all busy interacting, breeding and fighting for life. When he explains his vision in more detail, you get the sense that he may not be far wrong.
“I think the cloud is a great opportunity for interdependent ecosystems or partners to form. There will be some players that provide the platforms, and other players will maybe have niche applications that work on those platforms. If everybody works together there’s a way where everybody can find a way to play to their strengths. So it’s about differentiation.” And he looks forward to different partners coming forward to add value to the infrastructure, whether in terms of applications, functions or portals, forming communities of interest.
An ocean change
Differentiation is definitely an important part of the future for Roberts. He goes on to recall the impact that data centres had on the industry about 10 years ago when they came to the fore: “Everybody did the same thing, everybody spent a lot of money, everybody went to market in the same way. And by the time everybody got to market, the market price was about one-tenth of what the business plans said.”
But now, the cloud brings new high-value opportunities for telcos to service customers and their needs, whether they are systems integrators, internet service providers, application service providers or carriers. And their requirements and issues are very similar to those which are driving the growth in the enterprise market, as the end users struggle to keep pace with evolving technology.
Roberts believes they need someone who can provide a one-stop shop of in-cloud services and network-enabled IT solutions on demand, that they can access as and when they need them in order to remain competitive. In what he labels “a kind of ocean change”, the profile of customers is changing substantially, and the business along with it.
Without the power of foresight, no one knows how far things will go, although Roberts does joke that in the future, this will be the business formerly known as wholesale. But clearly he believes the time has come for wholesale businesses to assess their future and reposition themselves.
Being a bit different
The trick lies in finding a unique approach and being prepared to exploit it as speedily as possible: “The world is changing, and we want to be at the forefront of that. And we’ve made investments to be at the forefront of that.”
Much of the answer, it seems, is in identifying the right business partners and creating successful working relationships, whatever form that takes. In recent times, Verizon has been quick to make acquisitions and strike close working relationships with the businesses that have the specialisms and expertise they need to exploit: “We have gone out and bought assets and intellectual property to put together all the parts that actually compose a cloud solution.”
Roberts refers to this process as “assembling the piece parts to be successful”. When Verizon acquired Cybertrust in 2007, which provided the business with focussed security expertise, it was the first step towards changing the way it worked and was perceived in the wholesale arena. For Roberts, if cloud is the ultimate goal, providing a secure cloud is an essential part of that solution: “probably the most important component to be successful in cloud”. Concern about security breaches, identity theft and safeguarding personal information is greater than it has ever been, and when it comes to security, Roberts believes it’s a case of “one strike and you’re out”.
This was the foundation for a shift in direction, but Roberts admits that in the middle of last year, the company made “a very decisive and deliberate decision” to change the direction of the wholesale business. In April of this year, Verizon acquired Terremark, driving its philosophy of “everything-as-a-service”.
It acquired Cloudswitch in August, a provider of cloud software technology, in a bid to enhance its cloud and cloud-to-cloud capabilities. And in a recent deal, Verizon Global Wholesale’s cloud computing platform will be supporting Australia-based communications services provider Global Gossip at 300 sites across Australia, Europe, Fiji, New Zealand, the UK and the US.
Such acquisitions always create challenges. They need to be incorporated into the business and integrated into a larger ecosystem in order for the purchaser to benefit from the skills they can bring. But without doubt, Roberts considers speed to market and the requisite levels of expertise as the most vital components of successful evolution in the wholesale world.
There are other challenges with adoption of the cloud as a new strategy: there are legal and regulatory issues, concerns about privacy and personal information and questions about where the data resides and subsequently what law it is subject to. He highlights the problem that in some countries, personnel information cannot be held in a cloud outside the country of origin. “Getting all of that aligned is, and will be, a complicated process. Because the world is different, this raises a whole new set of issues that we need to look at very carefully, to make sure that everything is done properly.”
But most important is changing the way the wholesale world regards partnering. He believes that many of the developments he anticipates – the concept of the ecosystem – can only succeed in a more open world. “There’ll be players at the heart of that, and players at the periphery of that, but that’s what will make it work. People who don’t buy into that won’t be able to maximise the value of this super-development in the industry. Because everything is a service.”
Key Facts: Verizon
History: Verizon Communications was formed by the merger of Bell Atlantic and GTE in 2000. In 1999, GTE had revenues of $25 billion and Bell Atlantic had revenues of $33 billion. Today, Verizon is a global leader in delivering broadband, video and other wireless and wireline communications services to mass market, business, government and wholesale customers, serving customers in over 140 countries.
CEO: Richard L Carrión
Revenue: Verizon’s revenue was $106.6 billion in 2010.
Network: From 2008 to 2010, Verizon has invested a total of more than $50 billion to maintain, upgrade and expand its technology infrastructure. In March 2008, it invested $9.4 billion for a nationwide spectrum footprint, plus 102 spectrum licences for individual markets around the US. In August 2008, it expanded its rural coverage by purchasing Rural Cellular Corp, and in 2009 expanded its network coverage across the US when it bought Alltel. In December 2010, Verizon Wireless launched its 4G LTE mobile broadband network in 38 major metropolitan areas in the US, and in January 2011, announced that it would expand its 4G LTE network to an additional 140 markets by the end of 2011.
In wireline, Verizon is in the midst of a major initiative to bring customers the next-generation broadband services – fibre-optic-based internet and TV services called FiOS, investing more than $20 billion to deploy Verizon’s fibre network past 15.6 million premises.
Products and services: Verizon provides communication services, including voice, broadband video and data, network access, long-distance and other services, to residential and small business customers and carriers, as well as next-generation IP network services and communications solutions to medium and large businesses and government customers globally.