Verizon Is Switching To SDN Technology, But What Does It Mean For Investors?

on Tuesday stated that it will be transforming its network by implementing a "software defined network architecture." In a report published Wednesday, MKM Partners analyst Michael Genovese stated that Verizon's "important but underplayed" SDN announcement is considered to be the equivalent of the

Domain 2.0 announcement, but with less investor attention. Genovese continued that since AT&T announced its SDN last year, the company has forecasted its capital expenditures to be roughly 15 percent lower in 2015 than in the previous year. Verizon is on track for flat to slightly higher spending in 2015, but the company's spending could be cut in 2016, according to the analyst. Genovese also cited an article on Lightreading.com in which a Verizon executive told them that the company is focusing on software from key partners with a plan to incorporate commodity hardware and many non-traditional vendors in the effort as well. This shows the "increasing importance" of software as hardware. JPMorgan's Rod Hall also commented on Verizon's announcement, noting that the move could be seen as "virtual routing win" for

given their vMX products and the indications that Verizon is looking to start with the Data Center and edge of the network. The analyst also added that he is "aware" of virtualized routing products at

but stated it would be "interesting" to know what their roadmap looks like. Shares of Verizon were trading lower by around 0.12 percent at $50.49 Wednesday morning.