In Part 1 of a two-part Q&A, Mark Bartolomeo, VP for Internet of Things, Connected Solutions, Verizon Communications Inc. (NYSE: VZ), spoke to The New IP about Verizon's recent announcement that it was partnering with General Electric Co. (NYSE: GE) to allow GE's software-enabled machines and devices to connect to Verizon's machine-to-machine connectivity and cloud platforms to power the industrial Internet. Watch for Part 2 later in the week and find out how Verizon connects the IoT dots to dollars, and how SDN fits into the picture.
The New IP: We are hearing more about the Internet of Things (IoT) and all the benefits and capabilities, especially when it comes to cities, healthcare and utilities. Verizon's recent announcement that it was partnering with GE is a step into a new realm of services and new players. Why did Verizon decide to partner with GE and how did that come about?
MB: One of the things that Verizon has looked at is many of the big problems that our clients are trying to solve and the big societal challenges that people are looking to address, such as sustainability, congestion management, and improved outcomes for healthcare. These really require a partner ecosystem that is well-coordinated, where each company brings its core competencies and expertise to solve those problems together.
The New IP: What does Verizon bring to the partnership and how is it part of a larger strategy?
MB: Verizon is a very large company and we have incredible assets, but those assets tend to be in the area of providing ubiquitous networks, reliability, service level agreements, engineering -- there are other people who bring in device engineering in aircraft engines, and other companies that bring analytics, and other companies that bring in systems integration and all those are required to solve these big problems. When we look at the GE partnership, it's really part of Verizon's strategy to develop a strong partner ecosystem to address these challenges.
The New IP: How will this partnership generate new revenue streams?
MB: When you look at the adoption rates for machine-to-machine deployments, they're still relatively small and tend to be consolidated within a group of early adopters. But there is another group that wants to participate in the ability to generate new revenue streams and offer more consistent service levels to their customers but they can't get beyond the complexity. If you study this market, it's a little bit overwhelming when you realize how many pieces are required to come together, and how many companies the client has to work with to deliver a simple solution. A partner ecosystem is absolutely essential to solving these problems.
The New IP: How is the IoT challenge different from anything the communications industry has faced in the past?
MB: It's different than what we have looked at in the past when companies would say, "I can solve this and I can solve 100% of it." The biggest global challenges that are out there like sustainability and order management take a strong ecosystem.
The New IP: How does your work with GE fit into the broader ecosystem you mentioned, and what are some examples of business models this ecosystem can provide?
MB: Verizon has been working with GE for many years in railroad and energy. For example, we work closely in the transportation industry for positive train control compliance which is where we have integrated our wireless network into thousands of locomotives, 140,000 miles of railroad tracks, wayside crossings and railroad crossings so information can be collected wirelessly and used by the railroad companies. In the public utilities space, we also work with energy companies to support smart grid, and work with similar equipment companies like Siemens, Bosch, and Honeywell -- also focused on ecosystems.
All of these organizations are looking to deliver solutions to their customers on top of their traditional business; solutions that deliver defined business outcomes -- things like eliminating downtime and predicting outages and maintenance.
Check back later in the week to find out where Verizon sees revenue in IoT, and how advanced networking and cloud will help alleviate the wireless bottleneck.
— Elizabeth Miller Coyne, Editor, The New IP