The global network service provider (NSP) market remains highly competitive, with new entrants and little evidence of consolidation, as well as strong competition from regional sourcing options. This is good news for enterprises, because when combined with competitive purchasing strategies, it ensures continued downward pressure on pricing and the opportunity to gain more favorable commercial terms.

Despite increased use of partnerships and network-to-network interconnects to improve coverage, ownership of intercountry and national infrastructures remains a key differentiator for providers, allowing for improved pricing, better operational continuity and stronger service-level agreements (SLAs). Enterprises should ensure, however, that their evaluations of global NSPs do not overly focus on ownership of network assets, but rather on the outcomes that this enables, keeping in mind that no provider will own every segment of the network.

NSP portfolios continue to evolve, with Ethernet joining Multiprotocol Label Switching (MPLS) and Internet virtual private networks (VPNs) in the transport services portfolio of most providers. The array of managed services on offer continues to expand, with hosting services evolving to "infrastructure utility" services, and hosted IP telephony evolving to hosted unified communications and being joined by managed video communications, such as telepresence, all delivered to the enterprise over a managed network.

Although this research describes the market landscape for global NSPs, organizations with global networking needs can also employ a regional NSP strategy. This can be an attractive option, where interregional traffic can be minimized, or at least focused on a few global data centers. There is an increase in the number of global enterprises choosing a regional networking strategy, especially if they have centralized their data centers into a few major hubs, because the ongoing standardization of services like MPLS has made it somewhat easier to integrate multiple providers. Regional providers will typically have denser coverage and, therefore, potentially lower prices in their regions than global operators. However, the additional costs and effort of integrating and interconnecting regional operators must be included in any comparison. As a result, a single global provider is still the most popular approach, especially if more-sophisticated managed services are part of the requirement (see Figure 1).

Once again, the number of providers meeting our inclusion criteria for Global NSPs has increased, with the addition of Tata Communications to last year's participants. Taken together, with the option of using regional providers, this ensures a fiercely competitive market. The absence of effective public price lists, however, still means that only enterprises using competitive sourcing approaches will reap the full benefits of this environment.

2009 saw the gradual evolution of large network sourcing deals, with the trend away from classical "your mess for less" outsourcing, where the client's existing assets, staff and services were run with little change, toward deals built from a collection of managed-service components with a professional services wrapper, rather than focusing on the transfer of assets, existing contracts or people. The use of these standard building blocks should enable lower costs and better scalability, but does require the enterprises to be prepared to accept-off-the-shelf offerings that are "good enough," rather than insisting on custom solutions where they specify every detail.

Local access continues to migrate away from leased lines toward optical Ethernet and DSL. Although E1/T1 lines continue to be popular, leased lines below E1/T1 speeds are likely to be attractive only in emerging markets, where bandwidth is often still extremely expensive. Asymmetric DSL (ADSL) and symmetric DSL (SDSL) alternatives, including bonded SDSL "Ethernet first mile" services, are popular, despite ADSL in particular offering significantly lower service levels than other wired access options. Optical Ethernet is becoming the access mechanism of choice for speeds above 2 Mbps. Some providers are deploying third-generation cellular as an access technology to allow for rapid deployment of new locations, as well as providing a network-independent backup solution. This is a welcome enhancement, especially because installation lead times for wireline services are a major cause of dissatisfaction for multinational enterprises. Very small aperture terminal (VSAT) satellite remains the connection type of last resort where terrestrial options are not available, or as a diverse solution for redundancy.

This year, Ethernet services have become mainstream, with all providers on this Magic Quadrant offering Ethernet services alongside MPLS and Internet VPNs. However, the exact service offered (Ethernet private line, virtual private line or virtual private LAN) varies, and the coverage of Ethernet services is typically much less than that of the same providers' MPLS services. Pricing policy also varies, with some providers pricing Ethernet services close to parity with comparable capacity MPLS services, and others positioning Ethernet at a significant discount.

A growing focus of competitive differentiation has moved to service portfolio and service quality. Transport services, typically centered around MPLS and voice, are the core services for this Magic Quadrant, but these are often sold as part of a managed service bundle. This bundle includes managed WAN routers and often will include additional services from a broader group of offerings. These additional offerings include managed security services, application acceleration, managed LANs, voice over IP (VoIP) and unified communications. Increasingly, these managed services will be delivered with end-to-end SLAs. Growing interest in new WAN services like Session Initiation Protocol (SIP) trunking and telepresence means that WAN services will become an even stronger point of account control for providers that establish credibility through service execution.

Managed video communications, especially telepresence, and managed WAN optimization services have now become expected, and the frontier areas for managed services are managed unified communications and "infrastructure utility" services.

Enterprises should focus on the critical capability to integrate network elements successfully from different sources into an end-to-end solution. Delivery of services over an integrated network fabric with seamless SLAs and global account and service management are key to successful deployments. Portals giving online visibility and control over many aspects of the solution are an increasingly important tool to deliver this end-to-end experience. The capability to create end-to-end solutions for disparate components will become increasingly important as the demand for global wireless services grows. Many providers have launched services like managed mobility and "telecom expense management (TEM)," which often fall entirely in the category of managing solutions from other providers. Although fixed-mobile convergence offerings are emerging, the mobile service market continues to be a distinct market, which Gartner covers in separate Magic Quadrant reports.

This Magic Quadrant assesses suppliers that can deliver fixed corporate networking services worldwide. Services to be provided include:

• WAN services, predominantly managed, including MPLS and IPsec s VPNs and Ethernet services
• Converged voice services, such as SIP trunking and managed IP telephony
• Remote access services

In addition to traditional voice services, it is highly desirable for providers to offer value-added networking services, including, but not limited to, application-fluent networking, managed LANs, hosted or managed IP telephony, unified communications and managed security services. Integrators, virtual operators and carriers are included, but only if they provide and manage offerings that include data and converged services.

To be considered for inclusion in this Magic Quadrant, providers must meet all the following criteria:

• Offer data, voice and managed network services to enterprise customers, delivering service and/or having points of presence in the top 25 markets (countries) in the world
• Actively sell enterprise networking to organizations in North America, Western Europe and Asia/Pacific, and not just sell services in other regions for delivery in those markets
• Generate at least $200 million in direct global enterprise network service revenue annually (excluding domestic business and wholesale)
• Not simply resell network services from another global provider

Tata Communications

None

Our emphasis is on a vendor's service quality, pricing and track record. These elements are particularly important for global networks because the issues of infrastructure, language and cultural problems become more complicated and prolonged than if applicable to only one county (see Table 1).

We look for a thorough understanding of what clients want in a global provider, which is different from the requirements of a domestic provider because it inevitably includes third-party elements, and frequently includes a wider set of managed services. NSPs should have a clear and evolving geographic strategy to meet the changing needs of customers. The portfolio should be broad enough to satisfy the evolving requirements of most enterprises, not just a specific vertical industry or customer size (see Table 2).

Leaders have a full portfolio of voice and data products, coupled with above-average service and support, wide global coverage, and competitive pricing. They have a strong vision that includes adopting more information and communication technology (ICT) capabilities, which is a strategy they articulate clearly and openly.

Challengers exhibit good capabilities in the areas of service and support, pricing, and coverage. However, long-term plans are sometimes vague. They may not understand the requirements of enterprises or the market, but what they offer tends to be good quality.

Visionaries have a clear understanding of the market and where it is going. However, they often lack the financial and people resources to execute on these directions.

Niche players are often strong in a specific element of execution (such as service and support) or part of the product portfolio, or they offer low pricing. However, they usually lack comprehensive vision and resources.

AT&T combines wide geographic coverage, a broad portfolio and good service quality to achieve a strong position in the global network services market. However, it is quite selective about the clients it will pursue, principally addressing larger enterprises for which it will offer a variety of sourcing options, from connectivity services through managed services to full outsourcing. AT&T has been making progress to overcome its reputation as being expensive and inflexible, but still has a way to go before being considered best in class in these respects.

• AT&T offers high-quality global network services, with broad global presence and a comprehensive portfolio of managed services.
• Although strongest for clients with substantial U.S. needs, AT&T is willing to bid for networks with little or no U.S. content.
• Strong financial performance continues to be a differentiator for AT&T, as customers evaluate the viability of strategic vendors.
• AT&T has established leading mind share in managed telepresence services, winning global customers from overlay network competitors.

• Gartner customers continue to report billing discrepancies that have lengthy resolution windows and a lack of consistent ownership within AT&T.
• AT&T lacks deep in-country infrastructure in major markets outside the U.S., such as the U.K. France and Germany, of some of its competitors, affecting its pricing and service delivery for networks needing substantial density of sites in these markets.
• Global, managed MPLS customers report the need for consistent oversight of change control processes.

BT Global Services' prior strategy of aggressive growth through the acquisition of companies and outsourcing deals left it with a heterogeneous infrastructure and poor profitability. While some of the steps BT has taken to resolve this challenge have been very welcome, such as the rationalization of its networks, other efforts have been less so, such as staff reductions and an unwillingness to renegotiate deals or bid on opportunities requiring significant investment. BT is strongest when addressing larger managed-service opportunities where its extensive footprint can be brought to bear.

• BT Global Services has an extensive global MPLS network, with deep capillarity in the U.K., several Western European countries, India and South America.
• It has a broad portfolio of managed service options, from application-aware networking through security and hosting to LANs, including managed telepresence, video and unified communications.
• A commitment to partnerships helps BT in broader ICT deals.
• BT has established vertical offerings in industries such as finance, health, automotive, and oil and gas.

• BT Global Services has had several changes of CEO and has undertaken substantial restructuring in the last 12 months, creating concerns regarding its future strategies.
• Gartner has seen an increase in customer dissatisfaction with BT, especially in large outsourced deals, with reports of support resources being cut back and service delivery issues.
• BT has become much more conservative in its approach to investing in its network footprint and product portfolio, for example, with very limited plans to extend its network reach or in-country depth.
• BT is behind other providers in rolling out global Ethernet services.

Cable & Wireless' much-publicized intention to separate into two companies, one serving the enterprise market and the other comprising incumbent telecom operators in a number of smaller markets, is welcome, as it will increase focus on the enterprise business. However, its merger with U.K. operator Thus, giving it a strong No. 2 position in the U.K. enterprise market, has led it to become more U.K.-centric, with some of its more-innovative offerings, such as fixed mobile convergence, only available in the U.K. Cable & Wireless is at its best where the enterprise needs services in major global markets, rather than deep capillarity in a particular market (apart from the U.K.).

• Cable & Wireless' MPLS network covers the largest markets in the world; this is combined with a large number of network-to-network interfaces (NNIs), to cover smaller markets.
• It has especially strong coverage in U.K. and Indian markets.
• Cable & Wireless has a reasonably broad portfolio of managed services.
• It is willing to compete aggressively on price for network services.
• It is innovate and flexible in terms of the solutions it offers and in the commercial arrangements is it prepared to construct.

• Cable & Wireless is very focused in U.K.-headquartered companies, and is less visible and active in other markets.
• Its managed-service portfolio, although covering the most important areas, is not as extensive as leaders in this market, especially for on-site services such as managed LANs on a global basis.
• Outside the U.K., Cable & Wireless lacks the scale to implement very large outsourcing projects, and other extremely large and complex deals.

Shifting its business from low-margin wholesale and voice to more attractive enterprise data and converged networking, Global Crossing has focused on being the primary provider to midsize multinationals or a secondary provider to the largest multinationals. While executing well on the basics in its core markets, Global Crossing is still challenged by the need to simultaneously expand its coverage into emerging markets and enhance its managed-service portfolio.

• Global Crossing continues to compete aggressively on price for core transport services.
• Its network covers the major markets and is particularly strong in North and South America and the U.K.
• Gartner customers report high levels of satisfaction with global account management and presales technical support.

• Apart from South America, Global Crossing's network coverage lacks depth in emerging markets, and it is not as strong at network partnering for reach extension as some of its rivals.
• It has limited capabilities in higher-layer services like unified communications, telepresence and cloud.
• Despite having a growing portfolio of enterprise-managed services, Global Crossing still trails the market leaders, especially in on-site value-added services, such as managed LANs.
• The uCommand portal has added some provisioning capabilities, but it still trails the market as rivals continue to innovate.

NTT has very little recognition in the global NSP marketplace, although its network is strong in Asia/Pacific and covers the top markets elsewhere. In addition, NTT provides managed services for many enterprises on top of other providers' networks, and gains excellent feedback for the quality of these and the other services it provides. Historical innovation in areas such as Ethernet, and Internet Protocol (IP) IPv6 has gone largely unrecognized in the market, and its extensive hosting capability has not been leveraged to compete with other providers' infrastructure utility services. This is due to a combination of a conservative corporate culture and a complex structure of multiple operating companies, which is gradually being simplified.

• NTT has been gradually improving its network coverage in the major global markets.
• NTT enjoys very high levels of customer satisfaction, thanks to factors such as proactive SLA management.
• Growing capabilities in content delivery networks provide NTT with an advantage in this generally global marketplace, ahead of many of the providers in this Magic Quadrant.

• Outside Asia/Pacific, NTT's network coverage and in-country sales and support continue to be significantly less extensive than those of other vendors in this report, especially in Eastern Europe, Latin America, the Middle East and Africa.
• NTT has a complex organizational structure. Its strong hosting offerings are not well-integrated with its networking offerings, and there are distinct differences in its approach in different geographies.
• It has a limited voice offering, which is tied to the delivery of the data network.

Orange is able to exploit its broad service portfolio and even broader geographic reach to major on serving enterprises with the most globally dispersed needs. However, its focus on managed services, rather than on basic connectivity, has left it weaker at delivering high-capacity requirements in the major economies. It has also failed to associate itself as strongly as its competitors with major market trends such as video/telepresence and cloud services, despite having capabilities in these areas.

• Orange Business Services has the broadest geographic network reach of any provider in this Magic Quadrant, with special strength in France, Poland and Russia and a growing position as regional operator in Africa.
• The company has regained its position as the benchmark for execution, particularly regarding customer service.
• In addition to having a very broad portfolio of managed network services, Orange is growing its ICT business, with offers such as VPN Gallery positioning it to enter the cloud service delivery space.
• Orange has many innovative offers developed in the French market, such as vertical offerings in healthcare and utilities, which it is starting to bring to its international customers.

• Orange lacks its own deep national infrastructure in the major markets, such as the U.S., the U.K. and Germany (apart from France and Russia), and has been less willing than other providers to use NNIs for reach extension, limiting its ability to deliver cost-effective, high-capacity transport services.
• Orange has a reputation for being expensive, although this is often due to it bidding overengineered solutions (e.g., MPLS where Internet VPNs would be sufficient).
• Orange struggles to gain mind share in new service areas, such as telepresence, Ethernet services, cloud computing and unified communications, despite being close behind the leaders in delivery in most of these areas.

Formed from the combination of virtual network operator (VNO) Vanco and previous acquisitions Flag Telecom (undersea cables) and Yipes (U.S. Ethernet services), Reliance Globalcom is still struggling to find an identity for itself as a hybrid VNO. Equally important, it is still struggling to overcome the dip in service quality that occurred during Vanco's near bankruptcy. However, the ability to combine Vanco's low-cost sourcing of network access, especially DSL, with Flag's low-cost long-haul capacity has the potential to yield very cost-effective networks for those enterprises requiring a deep in-country presence in multiple countries.

• Reliance Globalcom brings significant financial strength to the former Vanco organization and other acquisitions.
• The addition of U.S. Ethernet assets from Yipes and Flag's Reliance Globalcom's international cable complements Vanco's VNO capability, giving the new organization access to low-cost network capacity to build global WANs.
• Reliance Globalcom uses an extensive portfolio of national providers, making it cost-effective for networks requiring deep in-country coverage.

• The company is still struggling to restore its customer experience to the very high levels achieved by its Vanco acquisition.
• It has not yet revised its commercial practices, such as the "active negotiation process" for price revision, to reflect its new position as an infrastructure-owning operator, rather than a pure VNO.
• Its offerings in areas beyond the converged WAN, remote access and hosting — such as fixed and mobile voice, LANs and PBX — are still immature.

Still often regarded as more of an IT service company than a network operator, T-Systems has been making headway not only in network outsourcing deals, but also in managed network service opportunities such as MPLS. The company is strongest with enterprises that have significant requirements for managed and professional services as part of their deals and whose requirements are weighted toward Europe, where T-Systems infrastructure is strongest.

• T-Systems continues to gain momentum the global networking market, pursuing network opportunities regardless of whether or not they are part of broader IT services opportunities.
• Its network covers the major markets and is strongest in Germany and Central Europe. Partnerships, including one with Orange Business Services, are used to extend reach.
• As a result of being an IT service provider, T-Systems tends to have a broader view of corporate needs and can bring innovative or even transformational ideas to its customers, such as utility pricing for managed services.

• Although growing, T-Systems' network is significantly smaller than those of leading facilities-based competitors.
• Outside Germany, the company has lower marketing visibility for its network services than for its IT services. As a result, T-Systems is not considered as frequently for network-only deals.
• The company can appear expensive, especially for network-centric deals. This image is due to the tendency to include additional professional services in deals and to its reliance on a limited number of network partners for reach extension, rather than VNO-style portfolio management to obtain best pricing.

Tata Communications' entry into the global networking market arises from its historical acquisition of undersea cable networks from Tyco Telecommunications and Teleglobe. While these give Tata a strong platform for delivering high-capacity intercontinental capacity, they leave the company less well-placed to address continent-level needs. Hosting services and its well-publicized public telepresence room services have been good for its profile, and are being expanded into vertical-industry offerings. However, Tata's capability to deliver deep in-country networks and on-site managed services is still limited.

• Tata Communications' extensive network of undersea cables give it the ability to deliver high-capacity services, such as Ethernet, to the major markets at very competitive prices.
• The company's significant point-of-presence (POP) density in India, extensive presence in the Middle East and growing coverage of Africa, make it especially attractive for enterprises seeking coverage in these regions.
• Gartner customers consistently cite flexibility in account management and responsive trouble resolution as strengths for Tata data services.
• Public room video and telepresence exchange services have raised awareness of Tata Communications' high-bandwidth capabilities.

• Tata Communications' network coverage is limited in regions such as South America and Central and Eastern Europe, with coverage in these regions principally provided by partnerships.
• Outside of India, Tata Communications lacks deep in-country infrastructure, making it less competitive for networks requiring many sites in each country.
• Tata Communications' managed services portfolio trails that of its larger rivals in areas such as managed LAN and unified communications.
• Sales and support coverage out of region is modest, with resources heavily concentrated in India and Europe, the Middle East and Africa.

Telefonica's unit addressing multinational enterprises is relatively new and still comprises both its own resources and matrixed resources from Telefonica's various operating entities around the world. As a result, many opportunities have to be addressed by pulling together custom solutions. Starting with large outsourcing deals, this unit has now evolved to address managed network service opportunities. There has been press speculation regarding the possible acquisition of Telecom Italia by Telefonica. Even if this were to take place, which does not seem likely, it would not impact global enterprises in the short term to midterm; in the longer term, it would allow access to both Telecom Italia's national network and it's Sparkle international wholesale infrastructure.

• Telefonica's corporate networking division continues to gain traction in the market, focusing on multinational enterprises, especially those doing business in Europe and the Americas.
• It has a network connecting most of the markets in Latin America and Europe and the top cities in North America, which it combines with partnerships for other markets.
• Telefonica offers a broad portfolio of managed services for enterprise customers.
• Its financial position is strong and includes investments in other operators, such as Telecom Italia and China Unicom.

• Telefonica's division focusing on multinational enterprises has yet to industrialize all of its offerings, still making extensive use of custom solutions.
• Its network footprint and sales coverage are limited outside Europe and Latin America.
• Telefonica has limited brand awareness in the enterprise market outside Latin America and Spain.

Verizon has strengthened its position in the global market, coming to grips with many of the issues that had held it back, improving its coverage of emerging markets, adding a solutions layer to its extensive array of point products and improving the customer experience, especially through enhanced portal capabilities. It is also making headway in network outsourcing. Unlike many of the other network service providers in this research, Verizon can address a wide variety of opportunities, including small networks through to the largest of networks and sourcing models, from high-capacity transport though managed services to outsourced networks. Networks requiring extensive coverage of emerging markets remain a challenge, however.

• With its own fiber networks in major countries worldwide, including metropolitan networks in the major cities, Verizon Business has been able to offer very attractive pricing, especially for high-capacity services such as Ethernet.
• Verizon continues to gain mind share in SIP trunking both domestically and internationally, with a combination of sales, marketing and engineering execution.
• The company is continuing to broaden its already extensive array of managed services, with offerings in areas such as infrastructure utility, security, managed mobility and application assurance.
• Continued investment in its customer service portal has positioned Verizon to drive more run-and-maintain issues to a self-service model.

• Verizon has been improving its network presence in smaller markets and emerging regions, such as Eastern Europe, the Middle East and Africa, but is still behind some other providers in this regard.
• Compared with other leading NSPs, Verizon is not as strong at partnering with industry players, ranging from other operators to IT services companies.
• Verizon has been slow to respond to enterprise video initiatives, trailing larger rivals in consideration for global managed video opportunities.