In a move that could have big implications for network equipment vendors, Verizon Communications, Inc. is reportedly testing a large-scale software-defined networking (SDN) implementation for its core telecommunications services using off-the-shelf “white box” servers.

The Rayno report, an investment newsletter focused on communications and digital media, is quoting several sources saying the U.S.’s largest telecom provider is working on a “large deployment” of next-generation networking based on commodity servers running Linux and the Pica8 open switching platform. Juniper Networks, Inc. is said to be providing the routing and switching technology.

Verizon has “a huge initiative under way,” said a source quoted by Rayno. “They can reduce their costs massively.”

They can also inflict major pain on high-ending routing and switching vendors like Cisco Systems, Inc. and Juniper, which have big businesses selling high-margin proprietary hard to carriers. Weak revenues from the telecom sector have been blamed for dragging down Cisco’s earnings over the last three years and four rounds of job cuts since 2009. Juniper is getting a piece of the Verizon business in the SDN deployment, Rayno says, but the value of the technology it’s providing is much lower than would typically be the case.

If Verizon makes a major public commitment to SDN, “It will ratchet up the pressure on traditional networking vendors to get their SDN strategy together,” said R. Scott Raynovich, who wrote the story on Raynow report. “It’s the biggest shift in the industry in 20 years.”

Verizon has been under pressure from competitor AT&T, which has been aggressive about promoting its own SDN initiatives, according to Raynovich. Verizon has confirmed that it is building its Verizon Cloud network on white-box technology. However, moving mission-critical call switching to commodity servers is a much bigger bet that could clear the way for other carriers to follow Verizon’s lead.