Verizon Communications Inc.(VZ - Free Report) and Riverbed Technology recently formed an alliance to create a hybrid cloud computing structural design based on Amazon.com, Inc.’s (AMZN - Free Report) Amazon Web Services (AWS). The architecture, dubbed as AWS Direct Connect Solution, will help the telecom giant meet the growing hybrid cloud computing demand from enterprise customers.
Cloud First Strategy
Many large corporations and enterprises are now adopting the ‘Cloud First’ strategy where the vital business functions are shifting to the cloud computing technology. This is because the strategy offers business enterprises, irrespective of their size, the option to optimize their cost structure for higher margins. This trend has created a growing market for the telecom industry, with major telecom players like Verizon and AT&T Inc. (T - Free Report) trying to create enterprise focused cloud computing solutions. Another telecom giant CenturyLink Inc. (CTL - Free Report) has been active in investing in this space as well.
Verizon’s new cloud architecture will allow its enterprise customers to avail its Virtual Network Services (VNS) and Secure Cloud Interconnect solutions that will provide managed accessibility to employees.
The Bottom Line
In recent times, Verizon has witnessed declining Ethernet Cable orders with customers turning to cable multi-service operators (MSO). However, Verizon is slated to introduce the ‘Titan’ Ethernet program through which it intends to compete in the Ethernet market. We believe that the collaboration with Riverbed Technology will help Verizon boost its enterprise service offerings going ahead.
Verizon presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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