Growing through Converged Solutions
We have spent several years transforming Verizon into a company that can serve the needs of the digital economy.
Thanks to our steady investment in technology, few if any companies can match the reach and power of Verizon's world-class wireless and broadband networks. In addition, we have built or acquired the capabilities we need to provide integrated solutions that meet the increasingly complex requirements of our customers. Through Verizon Terremark, we operate some of the world's most advanced data centers and provide state-of-the-art cloud services for enterprise customers. We provide the vital security services that are so critical to the future of mobile commerce and cloud computing. Verizon Telematics is a leader in the connected-car business and is on the forefront of the emerging machine-to-machine marketplace. We have built a substantial presence in the delivery of digital video across fiber, mobile and cloud platforms, and we are creating new businesses in vertical markets such as healthcare and energy management.
In 2013, we leveraged these assets to make important additions to our portfolio of connected solutions.
Much like their counterparts in the consumer marketplace, enterprise customers want unprecedented control over their technology. As businesses move more and more data storage, customer information and information technology functions to the cloud, they increasingly expect those services to be available for delivery on demand over any platform, at a time and place of their choosing, tailored to their unique requirements.
At Verizon, we are innovating to stay ahead of this trend and to put greater choice and control in the customer's hands.
In 2013, we unveiled a transformational cloud platform and portfolio of services, backed by our global IP network, global data centers and managed security services. We designed our next-generation enterprise cloud around the needs of the "on-demand" data customer, on an innovative pay-as-you-go model that combines the economy and flexibility of the public cloud with the security and reliability of the private cloud. With the new Verizon Cloud, customers can configure their own storage, applications and virtual machines with the click of a mouse and change their systems in a matter of seconds as their business requires—a radically new approach that allows us to deliver secure, enterprise-level cloud services to companies of any size. We launched a trial of the new Verizon cloud in 2013 and expect to launch commercial service in the second half of 2014.
Experts predict that video will comprise almost 70 percent of all consumer Internet traffic by 2017, with much of that carried by wireless networks. Providers of digital content—including movie studios, cable systems and broadcasters, and online video publishers—face complex technical challenges in moving their content over broadband and wireless networks to a rapidly proliferating number of screens and end users.
At Verizon, we are building a one-stop shop to solve this problem for content providers—including our own FiOS Video service—who want to mobilize video across all platforms and devices. The core of this business is Verizon Digital Media Services, a content delivery network that takes in digital content to our cloud, then packages and distributes it over our global IP and 4G LTE wireless networks in the proper format to users on any device or screen. In 2013, we acquired two specialized companies—EdgeCast and upLynk—that will enhance our capabilities in digital video delivery as we integrate them into our media services company.
We also strengthened our position in next-generation video with the February 2014 purchase of the Internet video platform OnCue from Intel. We expect the OnCue platform to improve our FiOS Video service by simplifying the installation process and integrating live TV, video-on-demand and linear programming into a more seamless viewing experience. We also expect the platform's all-IP capabilities to make it easier to deliver FiOS content across wireless networks and set the stage for us to be a true nationwide video provider.
By combining these capabilities with the power of our FiOS customer base and more than 100 million wireless connections, Verizon has the potential to be a formidable force in the video marketplace of the future.
The number of connected cars worldwide is predicted to grow sixfold by 2020, to more than 150 million worldwide. And with more and more app development focused on the driving experience, the smart car is becoming a platform for innovation, much as the smartphone is today.
Verizon is a big player in this growing marketplace. Through our wireless and telematics businesses, we provide wireless connectivity and services like navigation, search and streaming video to major car companies such as Mercedes-Benz, Volkswagen, Toyota and, most recently, Hyundai, which will embed Verizon's wireless capabilities in all its U.S. cars and trucks starting with its 2015 models. We also expanded our fleet business in 2013, which uses sensors, remote diagnostics and cloud computing in combination with wireless connectivity to provide new tools for managing large vehicle fleets efficiently. We have deployed 18,000 such devices in our own fleet and field operations, generating substantial savings in time and fuel costs.
The connected car platform gives us lots of headroom for growth as we connect vehicles, first to one another and then to the transportation infrastructure itself—eventually linking to a smart platform that will be able to regulate traffic, connect autonomous driving cars, facilitate car and bike sharing and optimize public transportation. These connected transportation systems have the potential to reduce congestion, lower emissions and improve fuel efficiency on a big scale.
Another major strategic imperative for us is to provide integrated solutions that help companies in a number of vertical markets transition successfully to the digital and mobile era. Chief among these is healthcare, which now makes up about one-sixth of the U.S. economy. Like everything else in the digital economy, medicine is going mobile—and with that shift come enormous challenges about how to share sensitive, confidential medical information quickly, reliably and securely.
Verizon is deploying our expertise in security, mobility and data storage to address this challenge. In 2012, we launched a cloud and data service infrastructure to help the healthcare industry meet the requirements of the Health Insurance Portability and Accountability Act (HIPAA) for safeguarding patient information. This HIPAA-compliant cloud offers medical providers a secure environment in which to share electronic medical records, consult with providers and patients, and transmit radiology images and the like among hospitals, payers and physician networks.
In 2013, we launched our Converged Health Management solution, a patient-monitoring service that provides doctors with up-to-date data from connected biometric devices. With this service, patients receive an FDA-cleared remote monitoring system with which they can record vital data such as blood pressure, glucose levels and weight. The system sends the information wirelessly to secure servers in our HIPAA-compliant cloud, where it can be analyzed by healthcare providers who then give personalized feedback to their patients. Our objective is that this service will engage and empower patients to make healthier choices—creating better outcomes for consumers and reducing demands on healthcare systems.