Proprietary and Confidential. © 2007 Verizon. All Rights Reserved. PTEXXXXX XX/07

global capability. personal accountability.

New York City Technology ForumNew York City Technology ForumThe Future of Networks The Future of Networks

Tom Roche

Vice President, Business Data Products

Verizon Corporate Marketing

Page 2

• Workforce Mobility• Networking beyond the

HQ• Business and

Productivity Applications

• CRM/Managing the Business

• Interfacing with Customers & Suppliers

• Security & Resiliency

Enterprises must further drive changes in processes, IT and people to realize real-time, high quality communication and information sharing for improved performance

IT Challenges:

Reaching Beyond Conventional NetworkingReaching Beyond Conventional Networking

Key challenges: 1) Drive and maintain optimum business performance;2) Accelerate business growth in markets served.

Global Sourcing

RemoteWorkers Partners

Customers

Regional Branches

Local Branches

HQHQ

Data Centers

MobileWorkers

Page 3

Multi-Layer Security

Everything to IPEverything to IP

Ethernet Beyond Ethernet Beyond the LANthe LAN

Global Reach and Global Reach and ConsistencyConsistency

Wireline/Wireless Wireline/Wireless IntegrationIntegration

Dynamic and On Demand Networks

In the Network…Secure and Optimized Applications…

Application Acceleration

Fixed-Mobile Convergence

Professional Service Capabilities

Service Management Choices…

Managed Service Offerings

Mobile Applications

SaaS Delivery Models

Application Solutions…

Unified Communication & Collaboration

Utility-Based Services

Marketplace TrendsMarketplace Trends

Roadmap 2007

Local/National/Global consistency

Page 4

CIO Technology PrioritiesCIO Technology Priorities

Key CIO Priorities• Security • Collaborative

Services over IP• Mobility • Application

Performance• Global Network

Infrastructure• Lower TCO

• Gartner CIO 2006 Priority Survey – Security Enhancement Tools (1), – Mobile Workforce Enablement (3) &– Voice & Data Integration over IP (7).

• IDC main items include:– Improved Network Performance– Cost Savings– Enhanced Network Security– Improved Application Performance– Efficient Scalability of Multiple sites

• Forrester top technologies for IT

– Security- 65%– Mobility 55%– IP – 40%

• Gartner CIO 2006 Priority Survey – Security Enhancement Tools (1), – Mobile Workforce Enablement (3) &– Voice & Data Integration over IP (7).

• IDC main items include:– Improved Network Performance– Cost Savings– Enhanced Network Security– Improved Application Performance– Efficient Scalability of Multiple sites

• Forrester top technologies for IT

– Security- 65%– Mobility 55%– IP – 40%

Page 5

Impact on Networks Impact on Networks

Internal Factors Network

Impacts/Changes

Our future networks will require the greatest flexibility in supporting new applications, and driving out costs

External Factors

Cost Reduction

Operational Efficiency

Workforce Mobility

Anytime/Anywhere Communications

Data Center Consolidation

Net Conferencing

New applications for voice, data, and video

Competition

Speed to Market

Regulation

eCommerce with Customers

New, converged applications for voice, data, and video

Convergence with Optical, Ethernet, & IP Service

Wireline/Wireless Integration

Implementation of VoIP and Unified Communications

Increased Bandwidth

Quality of Service

Page 6

Source: Yankee Group 2006 US Metro Ethernet Survey

Q: Which of the following applications are supported/will be supported over your site-to-site WAN Ethernet service?

56%

56%

64%

68%

78%

78%

79%

80%

81%

85%

87%

89%

0% 20% 40% 60% 80% 100%

Distance learning

Video security

Video conferencing

IP telephony/VoIP

Internet access

Mission critical applications (ex. ERP)

Image files

Real time collaboration tools

LAN to LAN networking

Business continuance/disaster recovery

Large file transfer/sharing

Storage/NAS and SAN

Percent of Respondents

• Storage moved from fourth in 2005 to first in 2006.

• SANs/NAS is particularly prominent among large financial services organizations.

• Perceived reliability of Ethernet encourages businesses to move mission critical applications onto Ethernet

• Internet access dropped from 87% in 2005 to 78% in 2006.

– Ethernet’s ability to enable business applications is becoming more important.

Application Trends Driving Ethernet RequirementsApplication Trends Driving Ethernet Requirements

Page 7

Why Customers are Choosing EthernetWhy Customers are Choosing Ethernet

• Simplicity– Ethernet is the predominant LAN technology in Business today– IT managers are readily familiar with Ethernet protocols

• Cost Effective– Ethernet is more cost effective than traditional private line services in cost per megabit– Ethernet delivers over six times the bandwidth of traditional private line services for about

twice the price– Router interface savings

° 10/100 Ethernet interfaces are standard on most leading switches and routers° DS3, OC3, and OC12 interfaces generally incur incremental costs of $10K-$20K

• Flexibility– Scales from 10meg to Gigabit to grow with application requirements.– Enables application convergence– Single Access – Multiple Services/applications– User Defined QoS

Ethernet provides IT managers the ability to consolidate Ethernet provides IT managers the ability to consolidate servers and storage without sacrificing application servers and storage without sacrificing application performanceperformance

Ethernet provides IT managers the ability to consolidate Ethernet provides IT managers the ability to consolidate servers and storage without sacrificing application servers and storage without sacrificing application performanceperformance

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Controlling Costs with ConvergenceControlling Costs with ConvergencePast & PresentPast & Present

Legacy Voice and Data NetworkSD

DEFI NI TY 0 3 4

Lucent Definity ECSTelephone Telephone

Fast Packet Network

Fast Packet Network

Public InternetPublic Internet

PSTNPSTN

Telephone

VideoConferencing

VideoConferencing

VideoConferencing

SD

Cisco 1720

BRIS/T

CONSOLE

AUXWIC 0 OK

OK

B2

B1

WIC 1 OK

DSUCPU

LNK100FDX

S3

LOOP

LP

IBM CompatibleIBM Compatible IBM Compatible

SDPROLIANT 1850R

SD

HEWLETTPACKARD SureStoreAutoloader

DLT 718

SDPROLIANT 1850R

SD

Cisco 1720

BRIS/T

CONSOLE

AUXWIC 0 OK

OK

B2

B1

WIC 1 OK

DSUCPU

LNK100FDX

S3

LOOP

LP

SONET/TDMSONET/TDM

SD

HEWLETTPACKARD SureStoreAutoloader

DLT 718

Telephone Telephone

SD

HEWLETTPACKARD SureStoreAutoloader

DLT 718

SD

SD

Centillion 1400Bay Networks

ETHER RS 232C

PC CARD

P*8x50OOO130A O N6

INS ACT ALMRST LINK

PWR ALM FAN0 FAN1 PWR0 PWR1ALM

EMC Symetrix

SD

SD

SD

Legacy Voice

IP Videoconferencing

Web/Ecommerce & Internet Access

Local Area Network

Storage Area Network

SDPROLIANT 1850R

SDPROLIANT 1850R

DS1 PBX Tie Lines

DS3 Frame Relay

DS3 Internet Access

ISDN-BRI’s

ISDN-PRI’s

Storage Switch

DS3 Private Line

Each voice and data network offering requires a separate physical circuit

SD

Catalyst8500

Power Supply 0CISCO YSTEMSS Power Supply 1

SwitchProcessor

SERIES

Traditional TDM PBX

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IBM CompatibleIBM Compatible IBM Compatible

SDPROLIANT 1850R

SD

HEWLETTPACKARD SureStoreAutoloader

DLT 718

SDPROLIANT 1850R

SD

HEWLETTPACKARD SureStoreAutoloader

DLT 718

SD

HEWLETTPACKARD SureStoreAutoloader

DLT 718

S D

S D

S D

SIP Enabled Phones

IPTV Videoconferencing

Web/Ecommerce & Internet Access

Local Area Network

Storage Area Network

SDPROLIANT 1850R

SDPROLIANT 1850R

GigabitEthernet

QoS Enabled Ethernet/IP

Core

QoS Enabled Ethernet/IP

Core

IntranetIntranetVOIPVOIP

ExtranetExtranetStorageStorage

Ethernet plays a critical role enabling applications and consolidating costs–Ethernet Virtual Connections (EVC’s) that scale from 1Mbps to Gigabit–Quality of Service capabilities that support voice, video and data applications

One connection to access to multiple services – One connection to access to multiple services – scalability on demand scalability on demand

Controlling Costs with ConvergenceControlling Costs with ConvergencePresent & FuturePresent & Future

Page 10

Adding Optical to the MixAdding Optical to the MixIntegrated Local Loop EnvironmentIntegrated Local Loop Environment

Campus/PremisesCampus/Premises Wide Area NetworkWide Area Network

Integrated Optical Services

DS1DS3OCn

Storage10/100/1000M

VideoFrame Relay

ATMPRIEPL

EVPL

COCO OpticalOpticalBackboneBackbone

SONETDWDM

SONETDWDM

SONETDWDM

SONETDWDM

Fast PacketFast PacketServicesServices

ApplicationsApplications

(IP Video, VoIP, Unified (IP Video, VoIP, Unified CommunicationsCommunications

IP-MPLSIP-MPLSBackboneBackbone

(Intranet/Internet)(Intranet/Internet)

Convergence driven at Business Location, Metro WAN, and Extended WAN

Page 11

Convergence EvolutionConvergence EvolutionServices, Networks, DevicesServices, Networks, Devices

Market is in transition from standalone networks & services to converged solutions

Network

Device/Clients

ServicesWeb

C

on

fere

nci

ng

Au

dio

C

on

fere

nci

ng

SM

S

IP

TD

M

Desk Phone

Vo

ice

Mai

l

Em

ail/I

M

Vo

ice

Tel

eph

on

y

Today’s Standalone Services

IP

IMS

CDMA

WiFi

Ethernet

MPLS

MobilePhone

PDAPC

Live Communications

IP Telephony

InstantMessaging

VideoTelephony

Conferencing

Au

dio

We

b

Vid

eo

Converged

Messaging

Vo

ice Mail

EM

ail

SM

SUnified

UC&CCommunicator

UCSupport Apps

Notification

Presence

Personal Asst

Comm EnabledProcess

Tomorrow’s Converged Solutions

Mo

bil

e

PCMobilePhone

Adapted from Gartner: A Framework for Unified Communications, 1/7/07

Page 12

Technology and Workforce Trends Technology and Workforce Trends Converge to Support MobilityConverge to Support Mobility

• Rapidly Increasing workforce mobility

• Mobile substitution of fixed-line solutions

• Advancing flexible technology (FMC, IMS, dual-mode devices) with foreign markets frequently leading the U.S.

• Applications expanding to the mobility world

• Proliferation of IP and broadband (including wireless broadband)

• WiFi adoption in Enterprises

• Increased use of VoIP, SIP, and VoWLAN

Page 13

Key Attributes of Mobility Key Attributes of Mobility

• Service Convergence (Customer Experience):– Wireline/Wireless Bundled

Billing Plans– Integrated Communications

Package – Unified Portal– Client Synergies– Mobile visibility into network

reporting

• Network Convergence:– Provide ubiquitous access to

our expanding global networks

• Product Convergence:– Mobile Device Management

and Security– PBX Mobile Extension– Unified Communications– Managed Wireless Access

to Wireline Solutions

• Device Convergence:– Wireless Enablement of

Customer WAN Routers – Wireless Enablement &

Endpoint Security for Laptops– Applications availability and

security via handhelds

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Fixed Mobile Convergence - TodayFixed Mobile Convergence - TodayC

us

tom

er

Siz

eS

ma

ll

L

arg

e

Network-based Premise-based

Ca

rrier A

gn

os

ticM

ore

Le

ss

PBX Mobile Extension -

CPE

Wireless Office

Page 15

Put existing call on holdPut existing call on hold

Incoming call to Susan’s corporate phone number from coworker’s mobile phone

PBX Mobile Extension CPE simultaneously rings all devices

IP Phone

VerizonBlackBerry

TraditionalPBX Deskset

Susan sees coworker’s desk phone Caller ID and answers on her BlackBerry

Accept callAccept call

Conference Call with 4 digit dialConference Call with 4 digit dial

Use International PBX RatesUse International PBX Rates

Leave Conf, call stays in progressLeave Conf, call stays in progress

Pick up original call from holdPick up original call from hold

Check one voice mailCheck one voice mail

PBX Mobile ExtensionPBX Mobile ExtensionPBX Mobile Extension CPE:• One number, one voicemail• PBX Identity, functionality, and cost savings extended to devices• Secure wireless voice communications• Voice business continuity

Once answered, Susan can access PBX like calling features.

Page 16

Next Step -> IMS (IP Multimedia Subsystem)Next Step -> IMS (IP Multimedia Subsystem)

The promise of IMS

•Device Independence

•Network Independence

•Blended Services

•Presence & Location Awareness

•3rd Party Mashups

•Real-Time Bandwidth/QoS Control

Page 17

Cu

sto

me

r S

ize

Sm

all

La

rge

Network-based Premise-based

Ca

rrier A

gn

os

ticM

ore

Le

ss

PBX Mobile Extension -

Hosted

PBX Mobile Extension -

CPE

IMS Based FMC

Wireless Office

Integrated Wireline/Wireless Services - TomorrowIntegrated Wireline/Wireless Services - Tomorrow

Page 18

In ClosingIn Closing

• Networks of the near future will require:1. The flexibility to support next generation IP applications2. The ability to support convergence and ready bandwidth3. Mobility solutions for the increasing number of mobile workers

• At the same time, these networks will need to:1. Reduce costs2. Increase efficiency3. Sustain/Increase reliability

• Thank you!