Inside Verizon’s Innovation Center: Home Health, Virtual Retail, & More

A wireless telecom giant with a strong local presence is working on some surprising projects. If they pan out, those projects—and the various products they’re spawning—could potentially change the balance of power in the tech ecosystem.

Verizon Wireless, headquartered in Basking Ridge, NJ, employs 75,000 people and brought in $70 billion in revenue last year. The company is a joint venture between Verizon Communications (NYSE: VZ), based in New York City, and the U.K.’s Vodafone (NASDAQ: VOD).

What you might not know is that Verizon has a wireless innovation facility here in the Boston area, in a campus that employs some 300 workers in 135,000-plus square feet of labs, office space, and demo areas. The “innovation center” part of it opened in July 2011, with the goal of creating, developing, and showcasing a new generation of wirelessly connected products. Another goal is to bring in Verizon’s big partner companies, like Alcatel-Lucent, Ericsson, Cisco, and Samsung, to work on said products together.

When you think of Verizon, you probably think of 4G LTE—the next-generation voice and data network which the iPhone 5 (and the majority of future devices) runs on. I’ve recently written about how 4G LTE is impacting networking tech companies such as Acme Packet (NASDAQ: APKT), and how the business practice of “bring your own device” (BYOD) is affecting mobile software companies and enterprises. But these developments are perhaps even more critical to Verizon’s future.

Everyone in the tech world knows that wireless carriers—even the biggest and most successful ones like Verizon and AT&T—have to innovate now, or die trying. In the past decade, giants like Google and Apple have wrested a lot of power from the carriers in the mobile realm. So it’s not surprising that Verizon has a facility dedicated to wireless innovation (it also has a sister center in San Francisco working on apps). The question is, is it doing enough?

It was with these thoughts in mind that I drove out to the Verizon Innovation Center in Waltham, MA (pictured at left). There I met with the center’s associate director, Gagan Puranik, a 15-year Verizon veteran, who showed me a dizzying array of demos across more fields than I can list here. Puranik’s innovation team of 30-odd engineers and developers has been fairly quiet about what it’s been working on to this point. But no longer.

As Puranik explains, the theme of their work is connectivity, “not just for phones and tablets, but for non-traditional devices”—think home appliances and sensors, retail kiosks, health and fitness equipment, hospital monitors, and cars. In other words, things that impact people’s daily lives at home, work, and everywhere in between. The overall impression is similar to what you might have seen in a Microsoft or Intel “home of the future” showroom a few years ago—except that Verizon now has the high-speed data network to make a lot of those high concepts fly.

“We want people to come in and get inspired about what’s possible,” Puranik says.

In total, about 20 products have already come out of the innovation center and its collaborations. They are probably not big revenue generators for a huge telecom company, but they might send a message to the Apples, Googles, and Microsofts of the world—as well as to wireless competitors. (Let it be known that my AT&T phone had no connectivity in the building.)

All of which adds up to one thing: Verizon is doing a lot more than providing voice and data services—though that’s still where the vast majority of its money comes from. “What you’re seeing here is where Verizon is going,” Puranik says.

So, here are 10 quick highlights from my visit:

1. In retail, I saw a nifty demo of a computer interface for trying on clothes virtually. Using a Kinect video system (Xbox) and 4G network, you select an outfit, and the software maps the clothing to your body so you can see how you look in it. The interface isn’t perfect (it’s probably best for trying on ridiculous things like a Captain America costume; see photo), but you can see where stores might want to have this technology available for online customers.

2. Speaking of retail, I also saw a wacky contraption that looks like a big jukebox or voting booth, with a screen that provides telepresence for a sales rep or fashion consultant to help shoppers remotely. The idea is to develop a next-generation kiosk that streamlines the sales process. This project is done in collaboration with Alcatel-Lucent.

3. In home health monitoring, I saw a device that diagnoses sleep apnea via sensors on the chest and finger and a breath sensor (see left). The device is built by NovaSom and uses Verizon’s network to transmit the health data to sleep clinicians.

4. In the same room, there was an assortment of remote health technologies. One system has a set of wireless sensors that detect if a person is deviating from his or her daily activities, and sends an alarm to a caregiver. Another product is a wireless computer monitor designed to relay health data and enable video consults.

5. A “mobile ER” system enables emergency medical personnel in the field to transmit critical information about incoming patients to the hospital, via a mobile video link and integration with the clinic’s medical records.

6. In enterprise security, Verizon smartphones equipped with near field communication (NFC) can be used to lock and unlock doors, or log in to a laptop. NFC-enabled devices can also be used for mobile payments—to buy a train ticket at the station, say.

7. A networked ATM showed flashes of next-generation virtual banking. The machine can do two-way video with a teller or financial analyst. This made me realize how little ATMs have changed in 20 years.

8. Verizon is doing a fair amount with utilities and the energy industry. I saw an array of smart-grid sensors (see left, with Puranik) and communications nodes that hook up to the power grid and provide real-time information on electricity demand and other energy management issues. This is another big emerging use case for 4G LTE.

9. An early demo of a connected camera plus visual collaboration software looked intriguing. Presumably you could work with another person, drawing diagrams or showing each other things via your smartphones or other screens, with a shared interface that stores your notes and edits.

10. In connected cars, Verizon is pursuing projects in fleet management, as well as hooking up consumers’ cars to its network (presumably to do things like transmit status updates about vehicles). A fancy Mercedes outfitted with the latest wireless implements was parked on the innovation showroom floor, but I was told it’s too early to say what it does. Stay tuned.

My conclusions: The demos are slick, but none of these projects is big enough to move the revenue needle for Verizon Wireless, at least not yet. The future of the company rests on signing up more mobile and Internet subscribers (both consumers and businesses) while working toward building an ecosystem of developers who can harness the 4G LTE network in ways we haven’t even thought of yet. And, crucially, do it in ways that get Verizon paid.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] Follow @gthuang

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