Verizon thinks its cloud is better than yours — and it may be right

When it comes to the cloud, Verizon gets pretty cocky.

The telecommunications giant rebooted its cloud infrastructure efforts late last year, playing feature catch-up with competitors like Amazon, Microsoft, and Google. But Verizon Cloud started off with a pair of huge advantages: Verizon’s global data centers and networking infrastructure.

That’s part of why John Considine, chief technology officer at Verizon Terremark, is so brazenly bullish on his company’s chance to capture a big swath of the enterprise market. Verizon Cloud just doesn’t face the same challenges as Amazon Web Services or Microsoft Azure, he argues.

I recently sat down with Considine to learn more about Verizon Cloud. Here’s an edited transcript of our conversation:

Eric Blattberg: Tell me a little about Verizon’s cloud infrastructure business.

Above: Verizon Terremark CTO John Considine.

Image Credit: LinkedIn

John Considine: At the launch we talked about launching our next-generation cloud platform. As the baseline, we’ve been in the cloud business for five years, a little more now, almost six years in terms of serving the enterprise. [That’s] our niche, and this is for both Verizon and Terremark’s perspective — Verizon acquired Terremark in 2011. And so we brought all of the cloud resources together with our data center co-location, security, hosting, all that business is all wound up under Verizon Terremark now.

When I joined Verizon [in August 2011], we did a really detailed analysis of what our costs are, what our scale is, what our ability to scale — all of the things we really needed to do to run cloud and make it relevant to Verizon. As a $120-130 billion company, you have to be pretty big-time to have it be meaningful to the company. So the company has invested a tremendous amount in building cloud technologies and enhancing our data center strategies. We’ve made huge new investments in security, because I hear security’s pretty popular these days.

Eric Blattberg: People seem to like it.

John Considine: Verizon bought Cybertrust in 2008, so there’s a pretty big asset inside Verizon around expertise in security. We have unique views of the world, because we have the core network. We can see traffic flows. We can black hole traffic, do all sorts of things to carry out denial of service protection. All these assets come together. We built the new cloud platform. We launched in October. We opened up for beta. We have a lot of customers, both signed up and on the platform. We still get a ton of people applying to join the beta.

Eric Blattberg: Any public numbers you can share?

John Considine: No. We don’t talk about the numbers. We’ll just say that we’re very pleased. Within the next couple of months, we’ll [make the platform generally available]. Our center is the enterprise. We leverage our relationships with our big customers because of our core network and all these other capabilities. But we’ve also made the cloud accessible. You can come with a credit card and get these services.

In the beta there’s a mixture of both. We don’t know who they are, literally, coming and trying the cloud. We’ve put some really giant customers on there as well, to help us prove out and scale the platform.

Since that launch, I don’t know if you’ve seen, but we’ve done a number of announcements with some of our partners. We made an announcement with Oracle about allowing our customers to run the entire suite of Oracle database products and Fusion middleware on our cloud. That’s a big deal. We announced a partnership with Cloudera, doing some big data analytics work in the cloud.

You see a pattern emerge. We’ve been focused on enabling enterprise-type applications, and it’s pretty important, because it’s making the business models work, the support models work. It’s to enable our customers to do more than cloud, so you’re not really faced with this, “Well, I want to have the scale and the agility, but we want this middleware. I really need this database.” We’re trying to bring it together so they have a continuous service. Combine that with the data center services, core network, security. They can build full solutions with us to meet their business challenges.

Eric Blattberg: Where do you think you still have the most work to do?

John Considine: The most work going forward, we have a ton of partnership work that we’ve been doing and we’re in the middle of. That never ends. It’s everything from new technologies and small companies to the giant companies out there, like SAP and obviously Oracle. Getting that ecosystem, that marketplace put together is one of our huge focuses right now.

The next layer in the work that we’re doing, we’ve added a ton of developers. We keep hiring in the software development space. I think we added 50 software developers in Q1. We’re also doing the development of services. Integration of technology, our own technology developed to deliver things like database as a service, identity as a service, messaging, all of these kind of things. That’s where we’re shifting our focus.

To date, we’ve been building that infrastructure, and we believe that you have to get the infrastructure as a service just right. Without it, you’re either going to run into cost problems or you’ll run into scale problems, or availability, or performance problems.

Eric Blattberg: Who is your ideal customer? It sounds like a large enterprise. You have these small guys with their credit cards and you’re not sure who they are — does that type of customer even make sense for you?

John Considine: It’s a very fair question. If you think about where we’re coming from, we interact with all of the big companies — the Fortune 100, the Fortune 500, they’re all somehow customers of Verizon’s, partners with Verizon across the board. If you look broader, to our 16,000 or 20,000 top customers, those kinds of things, we have a right to play there. We’re already doing business with them. We can now offer an expanded set of capabilities.

Because there is so much technology, so much capability in our platform that you can’t get anywhere else, we want to make it accessible for the startups and the other guys. Is that a huge focus for our business? No. It’s a good thing, and we hope to foster more and more community and development around the platform. That’s a very good thing, because who knows where it leads? It could lead to the next YouTube or whatever it is. We don’t want to exclude that. But that isn’t the focus. The ideal customers: We do a ton of work with the banks, the financial sector. We do a lot of work in the government sector, a lot of stuff for the federal government. We’re involved in retail, in medical, and of course M2M.

Machine-to-machine is a very big deal for us. That’s because we have a whole set of capabilities tied into our wireless network, devices, interactions. We have a telematics business. We bought Hughes Telematics two years ago or so. We’re doing a whole bunch of stuff with different cities and municipalities about everything from smart parking meters to traffic control. We have a very long play in that because we have the wireless network. We have the core networks to deal with transmission and communication. We have cloud and data center services. So all these things come together. It’s a long way of saying “just about everything.”

Eric Blattberg: You just talked a little bit about the ways in which your existing infrastructure melds with some of the newer initiatives you’re undertaking. I’d love to hear more about how everything fits together because that’s obviously a key advantage of being Verizon: You can get into the cloud business and you don’t have to build the data centers from scratch.

John Considine: Yeah, that’s a huge advantage. You see the stress in our competitors. I’ll take Amazon. They’re big. They have to do things like direct-connect with third parties to allow their customers to combine co-location or physical gear with the cloud. That’s a problem. It’s harder. [Microsoft] Azure has the same scenario. How do you allow a customer to blend these environments?

Look at where we’re coming from. We have data center services. We do managed hosting. We have co-location. We’ve got cross connects, so all the network capability is built in. We have the security services. Finally, I’d draw it together with the network services.

Verizon runs an enormous set of networks. A huge portion of the Internet flows across Verizon’s networks. But we also have this private network, the MPLS network. This is very powerful with our big companies. We currently sell to a lot of the big companies, what we’d call private IP, our MPLS. It lets them connect their various data centers and their offices and have a secure network that isn’t the Internet. It’s highly reliable. It’s got [quality of service] capabilities. Now you can have cloud nodes off of that private network.

Eric Blattberg: Speaking of private networks and privacy, how much have Snowden’s NSA revelations impacted your business? I imagine it’s affected your international business to some degree.

John Considine: As you know, we don’t actually comment on the NSA, so no quotes, no talk on the NSA. But look at the challenge, even in that question. We’re in a hugely growing business. Our cloud is growing locally, globally, internationally. We are growing flat-out. And so to say, “Has this slowed it or changed it?” I don’t even know how we would know that.

Eric Blattberg: Too many compounding factors?

John Considine: Yeah. It’s easier to go back to security in this discussion because security is a big problem. There are breaches. We are involved in helping investigate and alleviate many, if not most, of the breaches that go on — certainly in the U.S. and in the rest of the world as well.

Actually, clouds are in many cases more secure than the businesses that use us for those cloud services. You should understand that we have immense data centers. We have people with guns, you know? They’re highly protected. We have certification of everything up through PCI and the FISMA and all these other things. And then we have teams that spend all of their time looking at security issues, correlating data from the breaches and refining everything that we do.

Eric Blattberg: Where do you see cloud services going in the next couple of years? What excites you most?

John Considine: If I summarize what 2014 is really about, it’s everyone trying to serve the enterprise. This comes from the players coming from the more commodity or small business — Amazon and Microsoft. Everyone is trying to get coverage for the enterprise. No surprise there, because that’s where all the money is. Enterprise IT spend for 2014 was something like $3.4 trillion dollars. And so we talk about, wow, unbelievable, this year in cloud we’ll do, what, $10 billion, collectively, for public cloud? We haven’t even begun.

For what excites me, the value that is being driven by cloud, the speed of innovation, is flat out exciting. The ability for people now to create entire new businesses, new technologies. Some of that doesn’t change from before, but think of it this way. Prior to cloud really being in place, what would it take for a startup to get their technology into JP Morgan Chase, or into Best Buy, or into GE? Nearly impossible, I will tell you, because I created a lot of startups over the years. “You can’t put a device on our network.” “There’s no way we’ll let you in our data center.” All of these gates, all these blocks are out there.

Now here’s the cloud. People can use what’s best for them. They can integrate these technologies. They can get something from a small company. Who cares? Everything is based on value now. Do I get utility out of it? Do I get value out of what’s happening? This medium, this idea that I can bring together compute and network, storage, transport, all these things on demand — it says, “Boy, I can go try that out for real.”