Verizon sees video as driver behind new opportunities

Verizon Inc. sees its future growth tied to the emergence of video as the dominant form of communications.

“In broadband, the Internet is evolving from a text-based to a visual medium,” Verizon Chairman and CEO Ivan Seidenberg wrote in May in his annual letter to shareholders. “We expect video will grow from about half of Internet traffic today to as much as 75 percent over the next five years.” Consumer, business and government technology use is often chocolate, strawberry and vanilla. Video might be the tutti-frutti that ends up on all plates. “Absolutely, that’s where it’s all going,” said Susan Zeleniak, group president of Verizon Federal Business. Already in government, she said, “I think we’re seeing a lot wider use of videoconferencing and video tools in general, and I think that will continue to expand as video becomes more and more available and the technology for delivering it becomes simpler.” Although consumers might be more interested in downloading the latest summer blockbuster film to their wireless device and private-sector enterprises are already using it for virtual meetings, customer care and marketing, government will be focusing on its use for telehealth, distance learning and military applications. “There are always vertical solutions,” Zeleniak said. “There are solutions for the finance, medical and energy industries, but government often reaches across all of those areas. And in some of those specialties, the lines between government and industry begin to blur a bit.” Witness the greater use of social media by the Defense Department, first responders and government in general. “We’re all so used to doing all of our business on the Internet,” Zeleniak said, that observers should expect an even “greater drive toward using consumer-like technologies to service citizens.”

The future for Verizon Communications Inc. is all about getting the picture — literally and figuratively.

The government's trend of seeking comprehensive solutions is no flavor of the month, and it is a smart way for agencies to help ensure uninterrupted service delivery, she said. “Security is the perfect area, because you really need someone who’s going to make sure that your end-to-end security is working. If I’m doing a piece and someone else is doing a piece, it leaves the agency always struggling to make sure it’s all working together.”

There might even be movement onto the cloud. “We continue to hear a lot of conversation about cloud applications, but we don’t see a lot of procurement activity,” she said. But the talk might have gone on long enough to induce a certain understanding and comfort level with the technology. “I think we’re on the precipice,” Zeleniak said, “and I think we’ll begin to see more procurement for cloud services.”

The road that brought Verizon Federal to No. 19 on Washington Technology’s Top 100 list with $1.7 billion in prime contracts is crossed by the deep and lengthening shadow of Networx, the General Services Administration’s telecommunications acquisition to replace FTS 2001.

As the 2011 deadline approaches, the pace of transition continues to quicken, but transformation has not been left by the roadside, Zeleniak said. “They have to get their basic stuff, but agencies are also looking to enhance their basic capabilities,” she said. “Video services might be an example of that, where they want to be sure that their data networks are capable of processing large amounts of video traffic.”

Verizon has been widely successful in winning Networx awards, she said, but “I think the Veterans Affairs [Department] contact center was to us one of the biggest. It’s an opportunity to really help the VA improve service to the returning soldiers. We were really delighted to win that and are already well into that.” Awarded at the end of 2008, work on that contract increased during 2009.

Another big win in 2009 was a $2.5 billion award through the Defense Information Systems Network Transmission Services-Pacific II for managed transmission services for the Pacific-region Defense Information Network System. 

The Washington Interagency Telecommunications System contract is another sweet spot for Verizon. The company held a contract under WITS2001, which terminated in January. But it also holds a spot on its successor, WITS 3. In July 2009, the Health and Human Services Department selected Verizon for a $245 million contract under WITS 3 to provide voice, data, collaboration and professional services.

“Those are three big wins," she said. "But I think it’s the whole energy toward Networx and continuing to bid those and win them — that’s a big story for us.”

As for opportunities ahead, Zeleniak said three loom large:

  • Air Force Network-Centric Solutions 2 to support the Global Information Grid.
  • Defense Research and Engineering Network wide-area network for connecting high-performance computing centers.
  • Connections II for telecom installation.

Pursuing business on WITS 3, Connections, Alliant and Networx will remain top of the list, Zeleniak said. “There’s a lot still on the table” for Networx,” she added, with “many DOD awards yet to be made.”

If there were to be a text message-size game plan, it might go like this: Networx transition; work on agencies’ security issues; move customers to transformation; help them use Networx, WITS, Connections, Alliant to solve business problems.