Verizon Enterprise chief looks past AT&T, eyes Amazon and Google as rivals

John Stratton discusses prospects of mobile platform to rival iOS and Android, how the cloud is reshaping IT, and more

Page 2 of 10

Makes sense. I want to drill down into specific things like mobility and cloud and the Internet of things. But before we do that, at a high level what were the goals when this business coalesced, as you said, and what have you achieved over the past -- it's been a little over a year now?

Yes, sir. It's about five quarters. The first most important thing for us to do was to recognize that the value we must bring is by positioning our business in such a way that we leverage all of the assets. We have a very interesting collection of stuff. If we think about all of the trends that have emerged in enterprise and medium business, government, what we've been trying to do is amass a layer of assets that anticipate those points and positions for what is inevitably going to be a fairly significant disruption here. So to your question, the first job that we needed to do was to simplify, streamline and address the fundamental service delivery issues that we had as a business.

I'll describe it in a few ways. Each of these companies that we acquired themselves had been somewhat acquisitive, particularly MCI. If you look at the spread of networks and systems and processes that underpinned them and even the product portfolio that sort of grew almost sort of out of control, what was becoming a problem for us was a level of effectiveness in terms of our service delivery. The level of friction required to make a promise to a customer and then to deliver against it was very, very high. We embarked on a massive program, looking at the entire lifecycle of the customer. Beginning with initial engagement through quoting and design and contracting and invoicing and service assurance and triage and lifecycle management, I'm talking about very fundamental things.

But they were incredibly difficult to do. We had a business that was built in silos. If I was in order management, I did order management. I didn't look left, I didn't look right. We have really turned that on its head. We had 855 unique IT systems supporting our business. Prior to coming here, I was chief operating officer of Verizon Wireless, and we had about 70 systems that ran a business that was roughly three times the size. So 855 is a lot. It's probably more than we need, you know? My very first hire in this job was my chief information officer [Ajay Waghray]. Fortunately, the guy that I put my arm around had been my CIO at Wireless and a very, very solid guy and so he came across. He has been working very aggressively to reduce the systems landscape. We took 160 systems out in 12 months' time. We took another 65 out in the first three months of this year.

[ THE INTERNET OF THINGS: Coming to a network near you]

Your readers, particularly the CIOs, would be the first to say: "Whoa, OK, there's more to this than systems," and I would agree with that wholeheartedly. It's really the fundamental business-process reconstruction that has been the focus of our energy and attention, which allows us then to retire systems. We've built an entirely new operating environment to run the business. In roughly 11 months' time we were able to conceive and deliver a very strong operating platform that is providing stunning breakthroughs in efficiency and effectiveness, substantial increases in production, productivity, dramatic reductions in the service intervals, full-scale automation through process. At the end of the first quarter, we had about 30 clients we had put on this, and we're seeing really, really good results.

Now it's a matter of phase two, which is migration. I have many, many thousands of customers around the world. As I build out the operating environment to cover their suite of services, we move them on, we gain those operational benefits both inside our business and obviously and importantly for the customer, in terms of the service experience.

Makes sense.

That's been an important part. We're simultaneously working to streamline our product portfolio, and I say "streamline" very purposefully. There was a notion inside of our business that infinite variability was a positive trait. That the ability to listen to our customers' requirements and to sort them down to an infinite degree of variability was a positive attribute of our company. But the fact is we've recognized that while we can make an infinite number of promises, the ability for us to reliably deliver against those promises, the ability for us to build scalable, consistent, high-quality solutions that meet their requirements, is very, very important. It's a reorientation, if you will, of the organization around saying: "In this particular domain, for this particular business problem, which we have solved dozens of times for companies around the world, we bring a degree of credibility and expertise to this. Bring those solutions."

We can do configurability, of course. We can flex according to a specific customer's condition, but the idea of starting with a blank sheet of paper every time gets you to a point where you end up having literally thousands and thousands of permutations, which is just not supportable and defeats the value of scale.

| 1 2 3 4 5 6 7 8 9 10 Page 2