It appears that Verizon is in the early stages of implementing a major new agreement with Walmart that involves edge computing and 5G connections.
For Verizon, the emerging deal with Walmart represents a high-profile case study for how it might make money from custom telecom deployments with big enterprise customers. And for Walmart, the agreement further signals the retailer's interest in using advanced technologies for everything from providing in-store medical services to keeping track of shoplifters.
To be clear, neither company is directly confirming the existence of an agreement covering 5G and edge computing. But there are growing indications that the companies are moving forward on some kind of formal agreement anyway.
Hints of a new relationship between Verizon and Walmart first arrived in March, when the Wall Street Journal reported that the companies were in talks to test 5G connections in some stores. Citing unnamed sources familiar with the talks, the publication reported that Walmart would install Verizon's 5G transmitters into two stores this year to power cameras that would scan for shoplifters or out-of-stock inventory.
The publication also reported that Walmart was interested in using the service to connect shoppers with medical services, including remote consultations with physicians, prescription tracking and restocking.
Analysts at Wall Street research firm J.P. Morgan asked Verizon's CEO Hans Vestberg about the company's possible agreement with Walmart during a conference earlier this month. Vestberg responded with general comments about the potential for edge computing in sectors ranging from retail to manufacturing, but did not talk specifically about Walmart.
Separately, executives from data center company Equinix recently touted a new "notable win" with Verizon for an unnamed "premier US retailer." During the company's quarterly earnings call earlier this month, Equinix CEO Charles Meyers said that the retailer was "transitioning from on-premise data centers to a hybrid multi-cloud solution to enhance elasticity and performance."
Equinix and Verizon officials declined to answer Light Reading questions about the possible agreement. Equinix, though, has made no secret of its interest in edge computing, including for telecom services. Indeed, the company purchased Verizon's data centers for $3.6 billion in 2016.
But the issue crystalized this week when Verizon's Chief Product Development Officer Nicki Palmer spoke at a Cowen investor conference. The event was not open to the public, but according to a summary of the event provided by Cowen's Wall Street analysts, Verizon is working to build "private" edge computing locations for specific customers, often on those customers' premises. The analysts said Verizon touted early wins in this area with Corning for an automated "factory of the future" – previously announced in 2019 – and with Walmart.
"In the Walmart case, the MEC [Multi-access Edge Compute]-enabled services include real-time healthcare monitoring (for in-store medical treatment) and next-gen cameras for security and stocking shelves," the analysts wrote.
A Walmart spokesperson told Light Reading the company was unable "to find any indication that an agreement was signed" with Verizon or Equinix.
Nonetheless, the growing evidence pointing to a Verizon partnership with Walmart for 5G and edge computing would certainly represent a major strategic initiative by the operator.
After all, 5G players ranging from Verizon to AT&T to Ericsson have long touted the "enterprise opportunity" around 5G. They argue that large companies like Walmart will eventually purchase their own 5G networks for their own private uses, from managing robots to tracking shoppers.
And edge computing is often included in such discussions, with proponents arguing that companies will want their own mini data centers either inside their own corporate buildings or nearby to store sensitive data and to speed up their access to high-powered computing. Such services could support virtually instantaneous computing by reducing the latency involved in sending user requests to far-flung data centers.
Indeed, the 5G and edge commuting "enterprise opportunity" is such that many providers are betting much of their future growth on the space, given that few operators are charging extra for 5G connections in consumers' smartphones. For example, Verizon itself has forecast meaningful revenues from its MEC and 5G efforts, starting in 2022.