DISA Customer Partnership Conference
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[Introduction by Larry Klooster, DISA Chief, Corporate Strategy and Communications.]
Thank you, Larry, and good morning. It’s great to be here to talk about Verizon’s role in helping all of you support our troops and keep America safe, here and around the world.
We’re proud to be part of the DISA team.
(By the way, this teamwork is a two-way street. We employ some 12,000 veterans – about 6 percent of our workforce -- and we rely on their superb technical training and work ethic to help move our company forward.)
That video you just saw gives you an idea of how fast technology is transforming our world and the institutions in which we work. The challenges you face in getting the right tools in the hands of the right people at the right time – reliably, securely and efficiently – are the same ones faced by enterprises in every business sector … but with the degree of difficulty multiplied by the urgency of our nation’s security mission.
SLIDE: Winning in Cyberspace
Information is now so critical to the work of the U.S. military that the Department of Defense has declared cyberspace every bit as important as the traditional domains of land, sea, air and space. Using information as a strategic weapon means we need to be more mobile, more agile, more global and more innovative. It means responding faster to cyberthreats so our biggest strategic weapon doesn’t become our biggest vulnerability. And it means doing all of this in an era of shrinking budgets and expanding demand for what you do.
When demand goes up and resources go down, the only way forward is to innovate. Verizon is at the heart of this connected world, and it’s our job to help you use innovation to win not only on land and sea, but also in cyberspace.
This morning, I’d like to give you a look at how technology “megatrends” are reshaping our world and how we as partners can put the power of this awesome technology to work in our country’s defense.
Today, some 2.3 B people around the world are connected to the Internet. About 6 B people have a mobile device. Network power, processor speeds and storage capacity are increasing at exponential rates. And with the convergence of mobility, broadband and cloud technologies, we’re seeing a whole new computing model emerge that is changing how we safeguard our nation and its digital assets.
This technology transformation is truly multi-faceted:
SLIDE: Global IP Traffic, 2010-2015
We see it in the enormous increases of IP traffic on our backbone network, as anything that can be digitized migrates to the IP format. Global IP traffic is growing at a compound annual rate of 32 percent – basically quadrupling between 2010 and 2015.
Video is the big driver here. As recently as 2005, video was less than 10 percent of web traffic. By the end of this year, we expect it to be 50 percent, and if current trends hold it will be as much as 90 percent in just a few years.
SLIDE: Mobile Data and Internet Traffic, 2010-2015
We’re also seeing a transformation of the mobility marketplace, which if anything is picking up steam. Today, there are more mobile devices than there are people in the U.S. Smartphones and tablets outsell PCs and do most, if not all of what people used to do tethered to their desks – including Internet access and streaming video.
As a result of this wireless revolution, mobile data and video traffic is expected to almost double by the year 2015. In fact, by the middle of this decade, mobile devices will generate more Internet traffic than all wired devices combined.
SLIDE: U.S. M2M Connectivity Revenue, 2010-2015
Some of this traffic will be generated by the emerging market for “machine-to-machine” communications, or what people call the “Internet of Things.” The Internet of Things is emerging as connectivity is built into the physical world, with intelligent chipsets embedded in electronics, appliances, medical monitors, cars, buildings and utility grids – all of them connected to the Internet through secure 4G LTE wireless networks.
We see the revenues from M2M connections growing at more than a 40 percent rate over the next few years. More important, we see M2M ushering in a new era of innovation and productivity as it enables solutions like connected homes, smart utility grids, network security, automated supply chains and more.
SLIDE: Enterprise Cloud Spending, 2011-2015
The final piece of this new computing paradigm is the cloud: networked servers that store all forms of digital information – media, communications, personal data, corporate intellectual property and top-secret agency information – to be delivered to any user on any device, anywhere in the world. Experts believe that by 2015 fully 10 percent of the digital universe will be maintained in the cloud.
Demand on the part of large enterprises for cloud solutions is growing at a tremendous rate, as businesses and institutions recognize this new delivery model as a radically more efficient and effective way to organize work in a rapidly globalizing world.
Of course, the real transformation happens when all these trends come together – intelligent networks, cloud computing smart devices and apps … delivering anything to anybody on any device, securely and reliably.
That’s the future Verizon has been investing in for many years and the reality we are prepared to deliver to our customers.
SLIDE: Verizon Network Platforms
Verizon operates some of the most pervasive communications networks on the planet. On any given day, our networks handle:
• More than 2 B text messages,
• 1 B phone calls
• 400 M emails
• And 8.7 petabytes of video -- equivalent to 4 M full length movies across our network every day.
Verizon also has a history of network innovation. Over the last decade, we have consistently leapfrogged technology generations to deploy future-proof networks that deliver capacity, availability, security and intelligence, from the core to the edge:
Our global IP backbone network operates in more than 150 countries on six continents, and we are constantly adding to its speed, redundancy and security. We have more than 200 data centers around the world, seven global Security Operation Centers and a specially-outfitted government network and security facility that’s tailored to meet specific federal requirements. We have a special expertise in cloud and security services and are working to virtualize all these network capabilities so they can be delivered on-demand, anywhere in the world.
Our FiOS network, which we launched in 2004, is the gold standard for high-speed Internet access in the U.S. With FiOS, we take fiber all the way to the home at speeds up to 150 megabits per second. Today FiOS delivers broadband and HD video, but with fiber we’re fully prepared for the “big broadband” era and future opportunities for 3D video, digital home monitoring, telework, energy and health care services.
Verizon launched the mobile data era in 2004 with our 3G wireless network, the largest and most reliable wireless network in the U.S. In 2010, we launched the next phase of the wireless data revolution with our 4G network based on the superior LTE standard. We now cover two-thirds of the U.S. and will blanket the country by this time next year – by far the largest 4G network in the U.S. 4G LTE is the fastest-developing mobile technology ever and is rapidly becoming the global standard. 4G LTE is a true game changer: it increases mobile speeds by a factor of 10, cuts latency in half and has stimulated a new wave of innovation in wireless that will take mobility to a whole new level.
Of course, the real magic happens when you put these super-fast LTE, fiber and global IP networks together with smart devices, apps and location technologies. Your networks will know where you are, what device you’re on, even what language you speak. Information flow will be seamless across different platforms and form factors. And the whole physical world will become a kind of information system, with sensors embedded in objects and linked via smart networks to the Internet.
That’s Verizon’s goal: to provide a seamless IP environment for voice, video and mobility that can deliver anything to anybody, wherever they are, on any device. We know that’s DISA’s goal, too, and we are partnering with you to deliver these kinds of enterprise-wide solutions.
You can see demonstrations of some of these innovative solutions at the Verizon booth -- #601 -- here at DISA.
SLIDE: Verizon Innovation Program
In fact, developing innovative solutions across the whole mobile ecosystem is a core strategy for Verizon.
As I said before, 4G LTE changes the whole notion of a wireless “phone.” In the 4G world, wireless can connect everything – not just people-to-people, but people-to-machine and machine-to-machine … with all of it becoming part of the mobile grid.
That makes LTE an on-ramp for innovation, and we’re partnering with entrepreneurs and developers across the whole landscape to rev up this innovation engine. We’ve established two Innovation Centers -- one in Waltham, Massachusetts and the other in the San Francisco area – to create the LTE ecosystem.
Our innovation labs provide a collaborative environment where partners can create LTE solutions and products and get them to market quickly and at scale.
We actually take developers through the whole innovation cycle, from concept to market launch. We provide a test network, open-door labs and technology expertise to help entrepreneurs get their products and apps to market quickly.
SLIDE: Ecosystem of Innovation
So far, our work with some 125 developers and partners has resulted in 20 commercialized products and more than 100 prototypes, with many more in the pipeline. Our partners range from large manufacturers to small entrepreneurs. And our work has created an ecosystem of innovation across every segment of industry, as you see on this chart.
The solutions coming out of our innovation labs – and the many more M2M applications and cloud solutions on the horizon – have the potential to revolutionize how global organizations manage their operations. Inventories will restock automatically. Equipment will order up its own repairs. Entire supply chains will be automated. Energy use will be monitored and controlled.
This revolution is just beginning. We’re committed to being a catalyst for change to help customers like DISA harness the innovation process to meet their strategic needs.
It’s clear that this shift to cloud and mobility offers a more efficient model for running IT systems and getting mission-critical information in the hands of decision-makers.
But efficiency without security is not an acceptable trade-off for any institution, let alone one that serves the U.S. military. That’s why Verizon has made cybersecurity and the protection of critical infrastructures one of our core competencies.
Through our Terremark subsidiary and the Cybertrust brand, we deliver a full portfolio of global security solutions. We successfully detect and prevent millions of attempted attacks on our networks every day. And with more than 70 percent of public Internet traffic routing through our networks, we have a unique vantage point for analyzing and preventing security breaches in cyberspace.
SLIDE: Data Breach Investigations Report
We publish the results of our analysis every year in the Verizon Data Breach Investigations Report. In our 2012 report we analyzed data from our own computer forensic investigations, as well as case loads from five international law enforcement partners.
The results provide the most comprehensive look available at the state of cybersecurity based on actual data breaches. Here’s a look at what we found.
In 2011, we analyzed security incidents resulting in 175M compromised records -- the second highest data loss since we started collecting data. These cyberattacks originated from 36 different countries and, increasingly, resulted from what our analysts call “hacktivism” – intruders with political or social motives for their actions.
SLIDE: Undiscovered Data Breaches
Interestingly, our analysts say that nearly all of these breaches result from fairly simple techniques like password hacking and the like. In fact, 97 percent of them are deemed to be “avoidable.”
In spite of that, though, 55 percent of these breaches go undetected for a month or more, with the average being 6 months. Even after months go by, the vast majority of them are detected by either law enforcement or some other third party, and not by the organization whose systems were breached.
Verizon is using the unique intelligence we’ve gained from this extensive study and our own global backbone to introduce a new set of cloud-based security technologies that can pick up these simple intrusions before they become widespread disasters. By detecting deviations from normal network behavior, we can recognize these cyber-crimes while they’re in motion and prevent them from doing damage to our clients’ networks.
We’re also expanding our pool of data to include additional partners, with the goal of having all critical infrastructure users – public and private -- collaborate in building a comprehensive library of cyber-threats, which will bring an unprecedented level of knowledge to bear on securing our defenses in cyberspace.
As you well know, the idea of critical IT infrastructure reaches beyond government-owned assets and transcends national borders. As our national defense becomes increasingly dependent on commercial networks like Verizon’s, strong partnerships between government and private industry will be vital in safeguarding cyberspace.
That’s one reason we were pleased earlier this year when Congress passed legislation dedicating spectrum and allocating capital to establish “FirstNet,” a nationwide emergency response network compatible with existing LTE networks operated by Verizon and others. We recognize that first responders – including those of you responsible for our national security -- need to be able to communicate in times of emergency over managed, interoperable, dedicated facilities. We applaud this plan to protect and secure the nation and its citizens and will do our part to make it happen as rapidly as possible.
We were also pleased to see this public-private approach reflected in the bipartisan cybersecurity legislation recently passed by the House of Representatives. Rather than impose a regulatory or technological mandate, this bill relies on the sharing of information and best practices between government and industry to assure quick and decisive action to prevent cyberattacks. We urge the Senate to follow this bipartisan consensus and enact this vital legislation this year.
Finally, Verizon is encouraged by positive steps being taken to address the ever-growing need for spectrum for mobile services. Earlier this year, Congress passed landmark legislation authorizing “incentive auctions” to make spectrum currently used for broadcasting available for mobile services. Now the FCC is moving aggressively to put the incentive auction process in place. That’s a big step forward.
We also encourage the FCC to continue the push to make better use of spectrum that is now designated for commercial use. One key element of that effort is the development of a robust secondary market. A working secondary market makes it possible for spectrum to smoothly change hands, which allows the market to find the highest and best use for spectrum. That should be a high priority.
In addition to making best use of spectrum now in private hands, we also need to free up government spectrum that could be better used for commercial mobile services. The NTIA’s recent report focuses on this issue and suggests that one step industry and government can take is to explore options for a commercial player and a non-commercial entity to share spectrum. Government and industry must work together to find ways to use spectrum more efficiently, and our industry is anxious to do its part. Our wireless trade association, CTIA, and T-Mobile have indicated a willingness to engage in a trial on spectrum sharing. And we at Verizon are prepared to commit our personnel and $5 million to work with the Department of Defense or any other government entity to develop workable methods of sharing spectrum.
Today’s highly complex information ecosystem requires a different way of working than the “do-it-yourself” models of the past, challenging all of us to embrace innovation without sacrificing the security on which our systems depend. We at Verizon look forward to a long and fruitful partnership with DISA and the Department of Defense as we work together to put all this awesome technology to use to make information a truly strategic resource for your clients and for our country.
Thank you very much.