Three months into the role, and Eric Cevis, Verizon’s new president of global wholesale is already implementing his vision that he hopes will see the unit return back to growth.
Cevis, a company veteran for over 27 years, has only served in the wholesale sector for the last three, but entered into the segment at a critical time for the industry.
“When I came into wholesale we were dealing with a lot of market competitive price pressures as technology evolution was coming forward, and the biggest task was moving people over from TDM to IP. Now, as head of this business, I have to ensure this migration is a profitable one.”
Cevis was formerly in charge of Verizon’s global wholesale unit in the Americas, before being promoted to run the sales domestically and internationally. He was eventually named as the man to replace Mike Millegan, who retired earlier this year after 33 years at the company.
Cevis has big shoes to fill, with targets to meet that will ultimately shape his tenure as Verizon’s global head. One of those will be identifying a strategy tailored towards integrating a range of services on the vertical and enterprise side within the company’s wholesale offering, which could ultimately swerve a negative financial position into a positive one.
“We have publically recorded negative growth year on year, and I have had the pressure over the past three years to bend that curve,” he says. “It’s now important to make the right choices in global wholesale to help the transition from TDM to IP and develop strategic offerings around cloud, security, mobility and professional services. That’s how I will get us back to growth.”
Cevis is adamant that his plan will bring Verizon’s global wholesale business back to the black and has a multiyear goal to achieve his targets.
He says he has put a challenge on himself and his organisation “to be the first in the sector to be back towards positive results”.
With the company reporting a Q4 2013 revenue service decline of 7.8% to $1.63 billion, it is already a tall order, and his first three months in the hot seat have been busy to say the least.
“From March 1, my first task has been to move the trajectory here on the path to profitability,” he says. “One important thing we have done is assess our roll-out of fibre to the internet and find a way to white label what we offer. This means Verizon is now providing internet access to our customers, who are then able to service and compete against the growing MSO threat in a major way.”
Verizon rolled this out in April as an internet access arrangement, and Cevis says he will look to evolve the offering to include a similar voice service as a double play by 2015. In effect, Cevis is taking Verizon wholesale back to basics. “This is plain vanilla internet and voice access – there are no emails, bells or whistles,” he says. The strategy of white labelling and reselling services is now being extended towards a range of other assets at the company’s disposal.
Cevis tells Capacity that it makes logical sense for Verizon, a global behemoth, to leverage its existing capabilities and execute a plan that sees the company become a larger distribution channel.
“I am targeting this resale environment,” he says. “This extends to our cloud assets in the data centre and we are looking to give our global carrier customers the capability to package that and take it to the wider community.”
Cevis claims this is an attractive proposition because it gives customers the ability to bundle solutions and pass it off as their own, giving the companies stronger brand recognition.
Verizon is now pushing out such a strategy on its data centres across the Middle East, Europe, Africa, Latin America and Asia-Pacific. “We are really pushing the conversation at the C-Level suite and looking at how we leverage data centres and our cloud assets to help other providers jump into the marketplace faster and stronger, allowing us to monetise from that partnership.”
This is just one of the several strategies he has for growth on the international stage. He says it was important to take a step back and look at the fundamentals of “how to run a global organisation”. Partnership will be a key theme for Verizon Global Wholesale under Cevis’ reign, with the company’s recent acquisitions likely to play a part in the company’s international growth.
“We need to identify how we partner because I am big on accepting partnerships across the world,” he says. “Collaboration is going to be my road to growth.”
Leveraging M&A
Reselling and white labelling services appears to be Cevis strategy on the road towards short-term success, but he is clearly aware that Verizon must innovate to ensure future success in the business.
This, he says, will come from the execution of a strategy that revolves around how the company will leverage cloud, its network and mobility to fuel innovation.
Luckily for Cevis, in the short term he will not have to deal with finding target companies that befit his needs, because Verizon already has these at his disposal. Late last year the company snapped up CDN provider EdgeCast in a deal worth $350 million, as it looks to ramp up its content services offering.
A year before that, it made an aggressive play into the M2M market by acquiring Hughes Telematics for $612 million, and has developed cloud solutions with Terremark for over three years since acquiring the company in 2011.
Cevis says the time has come for the company to now “get the full alignment out of the M&A activity we have already done to date and execute these moves”.
And with EdgeCast in particular, Verizon has been quick off the mark. Last month, it announced the launch of 20 additional PoPs to add to its footprint with the CDN provider. It is also strategising to utilise EdgeCast’s vast presence in Latin America to establish a gateway into Brazil.
Cevis claims it is now time for Verizon to now understand what its exact strategy is with peering and its carrier partner ports to fuel further growth. “This is the only way we will know exactly how to leverage EdgeCast assets and ensure it is the growth machine that we want it to be.”
Cevis is also set to place a big emphasis on cloud and M2M, with Hughes Telematics key to that growth. The automotive technology company provides a range of products in GPS tracking, communications and safety features in cars, and Cevis says Verizon is focussed on “working its way up the food chain in the M2M market through this acquisition”.
He says: “There is tremendous opportunity in the transportation vertical and we are looking at this, healthcare and the financial sectors as a way of pushing product innovation in the market.”
For cloud and M2M to succeed on the whole, Cevis believes the wholesale community must look at accommodating global networks with a certain level of QoS. “My priority lies around network excellence, and pushing product innovation and service improvements will be dependent on this.”
This strategy places an increasing focus on the application side of the business, and Cevis says it’s important for Verizon to take different pieces of the puzzle to carve out the opportunities that exist in wholesale.
“We don’t know yet if we are missing something in the cloud space, but we are trying to revolutionise the way people think about these verticals,” he says. “We don’t have all the answers on the application side but we do know how to take care of a network – the next piece requires us to add applications to allow us to monetise this for the industry.”
Beating the competition
The rising threat of the MSO is a “challenge” says Cevis, and allowing his customers to resell Verizon services has been one of his first competitive moves against the cable segment.
“No matter what I do in any part of my business there is always somebody else that is going to try and be better,” he says.
Cevis is relying on his strategy, and the fact that the entire ethos of Verizon is built on the premise of reliability as a way to counter the threat.
“Will customers want to deal with a reliable player in the market that is priced competitively, or a new entrant that is coming into the space and attempting to win wallet share?” he asks.
Cevis says the company is also looking at how to bundle several services, and is in the process of rolling out a project to look at its strategic services – whether this is in the cloud, Ethernet, IP, fibre or mobile – and give customers a discount for taking those services in a package based on the growth it provides for their business.
This, he says, is an incentive for companies to take additional share from the MSO players and help aggregate their volumes.
“These are the kinds of things I am looking to implement to push these cable companies to the side,” he says. “We are getting creative because we have to. With MSOs and others in the market, we cannot sit still any longer.”
