VZ : NYSE : US$47.01
Verizon Communications is a leading provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Formerly known as Bell Atlantic Corporation, the company offers both wireless and wireline products and services. The company is headquartered in New York, New York.
“VERIZON CLOUD” ON THE HORIZON – MORE FLEXIBILITY, MORE COMPETITIVE PRICING
Verizon announced that it will launch Verizon Cloud, a newly-designed platform that offers Cloud Compute and Cloud Storage services to enterprises. With more flexible offerings, improving performance and more competitive pricing, we believe the new service will enable the company to become a more formidable competitor in the enterprise cloud market. We believe that a successful launch of Verizon Cloud will help drive the recovery of enterprise revenue growth in 2014 and possibly pressure competitors in the space.
New platform centers on more competitive pricing – Through insourcing key software component and utilizing less expensive hardware, the company expects to lower costs and become more price competitive in the public cloud market, a key issue in our view, especially with small and mid-size customers. With more competitive pricing, we believe Verizon will likely garner more wallet share as enterprises go through RFPs for IT services.
Performance and flexibility expands potential market – As the new Verizon Cloud service would allow convenient online provisioning and deployment of virtual machines, network and storage configurations, we believe the new, more flexible offerings will attract more small- and mid-sized enterprises, further expanding its potential addressable market in the rapidly growing public cloud sector.
Negative read through for Rackspace – As this new service targets all sizes of enterprises and directly competes with existing IaaS offerings in the public cloud, we believe this more aggressive move by Verizon into this market will likely generate negative impact to Rackspace and possibly even Amazon Web Services, which have been the leaders in the industry to date.