Verizon continues to build up SD-WAN service momentum, giving customers access to a new library of virtual network functions (VNFs) based on Cisco’s Virtual Managed Services (VMS) platform.
By using Cisco’s VMS, which is based on its Intelligent Wide-Area Network (WAN) service offering, Verizon will have a platform for rapid provisioning, zero touch automation and centralized policy management.
Verizon is the first global network service provider to deploy the Intelligent WAN (IWAN) service.
RELATED: Verizon wins SD-WAN deal with Ericsson, focuses on global reach
"We are helping our enterprise customers have more insight and control over their IT and networking infrastructure through virtualization," said Shawn Hakl, vice president of networking and innovation for Verizon, in a release.
The two companies plan to continue to jointly work on helping enterprises ensure a smooth adoption of VMS. By leveraging the VMS platform, Verizon and Cisco will be able to offer seamless delivery of Cisco's virtualized platform and solutions in the future. This will provide faster time to market for combined offerings.
Cisco’s Virtual Managed Services (VMS) is a turn-key software-defined services platform that can deliver SD-WAN, security, and automation services. The vendor’s VMS uses an array of Cisco’s devices, software and network topologies, including Digital Network Architecture for enterprises.
This allows service providers to scale to the growing needs of their customers and quickly integrate it within their own infrastructure as well as with their enterprise customers.
SD-WAN market tide rises
Offering this joint service is important for Verizon and Cisco as they look to establish further credibility in the burgeoning SD-WAN services market.
Verizon can serve up a greater array of service options for its growing SD-WAN and MPLS customer base that are looking for new features and functionality beyond simple connectivity.
Already, Verizon’s SD-WAN vision is gaining market acceptance. The service provider previously won a contract to supply Ericsson with VNFs as a utility in a pay-as-you-go, usage-based model. This solution allows Ericsson to expand the global reach of its corporate IT infrastructure using Verizon's Global IP network for public and private networking solutions.
With over 90 active SD-WAN implementations and 16 full-scale deployments, Verizon has seen momentum for SD-WAN grow since launching the service last year. It also has 30 participants taking part in a universal CPE program trial.
The service provider revealed during the recent MoffettNathanson Media and Communications Summit that the emergence of SD-WAN and other services like Ethernet are helping the company overcome its legacy service revenue challenges.
Matt Ellis, CFO of Verizon, said that it was “seeing great take rates from customers” for SD-WAN.
Taking a partnership approach that leverages various solutions, Verizon’s SD-WAN solution now includes Cisco’s broader array of solutions via its recent acquisition of Viptela.
For Cisco, this new development lends credence to its emerging software-centric and SD-WAN vision. Cisco has been building out its SD-WAN and software vision internally and through targeted acquisitions.
Verizon and Cisco's timing could not be any better.
Dell’Oro Group has forecast that the nascent SD-WAN market is expected to grow at a compounded annual growth rate of 33% over the next five years with sales to enterprises accounting for the majority of revenue.
“The SD-WAN market is dividing into use cases for enterprise self-managed deployments and for telecommunication service provider managed business services,” said Shin Umed vice president at Dell’Oro Group.
Umeda added that a large portion of the SD-WAN efforts will be done by the enterprises themselves.
“Over the next five years, we expect the majority of SD-WAN deployments to come from enterprises, despite the recent explosion in managed services announcements coming from telecom service providers,” Umeda said.
Focus on software
A big focus of the new VMS platform for Cisco and Verizon is, not surprisingly, on touting a software-based vision.
Following fellow telcos AT&T and CenturyLink, Verizon set a focus on software-based virtualization in 2015 with the initial focus for its wireline network on migrating legacy elements and functions onto software-based platforms.
Having this approach in hand will make Verizon more effective in being able to respond more quickly to customer needs. In addition to SD-WAN, the service provider is rolling out a universal CPE program that has over 30 participants.
Likewise, Cisco has continued Cisco has been raising awareness of its software strategy.
The routing giant has been aggressively expanding its portfolio by making various software-based company purchases. Besides Viptela, Cisco also purchased artificial intelligence vendor MindMeld and an agreement to purchase Saggezza’s advanced analytics team.
However, Cisco is finding that this effort is anything but easy.
This migration has prompted the routing giant to cut an additional 1,100 employees from its workforce.
These latest cuts were part of a broader restructuring plan that was announced during its third quarter fiscal year 2017 earnings (PDF), come on top of the 5,500 layoffs Cisco announced in August 2016.