Magic Quadrant for Network Services, Global

This Magic Quadrant assesses suppliers that can deliver fixed corporate networking services worldwide. These services include:

• WAN services, predominantly managed, including Multiprotocol Label Switching (MPLS), IPsec virtual private networks (VPNs), and Ethernet WAN services and hybrid WANs combining several of these services
• Session Initiation Protocol (SIP) trunks
• Dedicated Internet services, including managed-VPN offers

In addition, it is highly desirable for providers to offer value-added networking services, including, but not limited to, WAN optimization, application performance management (APM), managed local-area networks (LANs) and wireless LANs (WLANs), and managed network security services. Integrators, virtual operators and carriers are included, but only if they provide and manage offerings that include data networks and converged services.

What's Changed?

Geographic reach remains a key evaluation criterion for global network service providers, including both breadth of reach into emerging markets and depth of coverage in established markets. Although a few providers are still investing aggressively to build out their networks, most are slowing their pace of investment in their own networks and turning to partnerships and network-to-network interface (NNI) connections to extend their reach.

Standardized hybrid WAN offerings, combining MPLS, Internet VPNs and Ethernet services in active/active configurations with path selection by application, are now the default WAN architecture, and local Internet breakout with associated security services is increasingly common. In mature markets, WAN access has moved from leased lines to Ethernet, complemented by broadband and cellular connectivity, and enterprises are increasingly overdimensioning their access lines to accommodate future growth.

Emerging capabilities include enhanced access to cloud services (not just the providers' own cloud offerings), especially extending MPLS networks into cloud centers. Differentiation for cloud connectivity includes the number of cloud providers and specific data centers the provider is connected to. Connecting to smaller cloud providers that host mission-critical applications can be just as important as connecting to larger cloud providers where most of the applications may not be critical. Self-service provisioning and bandwidth adjustment and the ability to add WAN optimization are also valuable.

Another key area of differentiation is SIP trunking, which is rapidly gaining traction in global networks, replacing ISDN voice lines. This is a highly differentiated area with significant differences between providers' offerings. Differentiators include countries supported, including different phone number types, resilience options, call handling/routing, and call types such as HD voice and video calls.

Network function virtualization (NFV)-based services are beginning to emerge, allowing many capabilities, which were previously delivered by dedicated on-site hardware, to be delivered on demand, as cloud-based capabilities from within the provider's network. Capabilities that can be virtualized include WAN optimization, VPN termination, and security capabilities, such as firewalling, intrusion detection system (IDS)/intrusion prevention system (IPS), secure Web gateway and even WAN edge routing. The advantage of NFV services is that they can be deployed on demand, typically in minutes, and scaled on demand as network capacity changes. Upgrading and support of these network-based services are also easier than they are with on-site appliances. Only a few providers have actually launched NFV services, but many have these services on their road maps, forming an important component of their vision for future enterprise networking services.

While global networking is inherently challenging, service quality varies enormously between providers and is a critical evaluation criterion, in terms of both direct customer feedback and measures (such as portals and SLAs) that providers put in place to help ensure service quality.

Flexibility and agility are emerging as key buying criteria. Meeting this requirement can include global network providers offering rapid site deployment, using cellular connectivity, the ability to dynamically change bandwidth on Ethernet access, adding and removing services using NFV, or simply the ability to cancel sites and services that are no longer needed without commercial penalty.

Regional sourcing of global WANs continues to represent a real alternative to sourcing global networks from a single provider, increasing enterprises' options and competitive pressure on the global network service providers.

Source: Gartner (January 2015)

Vendor Strengths and Cautions

AT&T

Building on an extensive global MPLS and Ethernet network, AT&T has been focusing on expanding its coverage in emerging markets via a series of MPLS NNI connections and partnership agreements. AT&T is unique in using this approach for the largest emerging markets and even entire continents, including China, India, Latin America and Africa. AT&T has made good progress in moving its clients from its older Enhanced Virtual Private Network (EVPN) MPLS offering to its newer AT&T Virtual Private Network (AVPN) MPLS platform. Multinational companies that have networks with at least 10% of their sites in the U.S. should strongly consider AT&T for global voice and data services.

Strengths

• AT&T's use of partners to address emerging markets has made it much more cost-competitive in these markets than was the case when it was using only its own network.
• AT&T has significantly grown its Ethernet service and Ethernet access coverage globally in the past 12 months, allowing it to offer high bandwidth access at more-affordable prices.
• AT&T has announced several new leading-edge network capabilities, including a multiservice access offering called Universal Port and access-agnostic NFV and virtual customer premises equipment (CPE)-based Virtual Managed Services. However, these services are currently being rolled out only in the U.S., and plans for global rollout are still in the process of being defined.
• AT&T's cloud connectivity offering, AT&T NetBond, supports more leading cloud providers than any comparable offering. Currently most of the interconnections are in the U.S, but the company has plans for further international expansion in 2015.

Cautions

• AT&T has been slow to roll out globally the services that it offers in the U.S., including its own SIP trunks and integrated 4G cellular WAN access.
• AT&T's extensive use of partnerships with large regional players may affect its ability to deliver its innovative services, such as Network On Demand, on a global basis.
• Some Gartner clients without significant U.S. presence report low levels of sales interest from AT&T in their global network business.
• Gartner clients continue to report that AT&T can be less flexible and more complex to do business with than some of the smaller providers in this report.

BT Global Services

BT has been investing in portal enhancements designed to enhance the customer experience and reduce cycle times. Not only are SLA reports available via the portal, but for some clients, BT has automated SLA credits, allowing the support relationship to focus on more-valuable areas. BT is trialing virtual CPE and NFV services with customers, with a view to deployment within the next 12 months. BT has moved its Global Media MPLS Network from BT Wholesale into BT Global Services, allowing it to better serve this important vertical sector. BT should be considered by all enterprises with global networking requirements.

Strengths

• BT continues to expand its already extensive global network, adding 12 MPLS points of presence (POPs) in the past 12 months, expanding its Internet backbone and its MPLS to Internet gateways.
• BT has a very comprehensive suite of application visibility and optimization capabilities, which it includes by default in its larger deals.
• BT's Connect Cloud, an offering for cloud connectivity to MPLS, is very broad in terms of both cloud providers supported and geographic coverage and is the first such offering to incorporate WAN optimization for cloud services.
• BT has strengthened its SIP trunk offering with more coverage, access options and functionality.

Cautions

• BT's network and sales coverage in the U.S. is not as strong as that of its U.S.-headquartered competitors.
• BT's multiservice access offering lacks a bandwidth-on-demand capability.
• BT lacks its own content delivery network (CDN) capability to accelerate cloud and other Internet content.

Level 3 Communications

Level 3 has been growing its network both in terms of points of presence and in terms of directly connecting buildings with its own access. It is pursuing this strategy both organically (adding 22 new MPLS POPs outside the U.S. in 2014) and through its recent acquisition of U.S. network service provider tw telecom, which tripled the number of on-net buildings in the U.S. for Level 3. Level 3's Cloud Connect Solutions offering has broad geographic coverage and a small but growing list of leading cloud providers. Level 3 is currently testing NFV offerings for near-term deployment. Level 3 should be considered for global networking requirements by enterprises of all sizes.

Strengths

• Level 3 has broad global coverage, with special strength in North and South America and good coverage of Europe.
• Level 3 has improved its managed-service offerings with standardized hybrid WAN configurations for different SLA needs.
• Level 3 is committed to extending its own network access to reach the largest possible number of cloud and enterprise data centers.

Cautions

• Level 3 currently lacks any cellular or satellite rapid deployment solutions.
• Level 3's SIP trunk services are strong in the U.S., but in the rest of the world, while improving, they still lack functionality and coverage, compared with the leading offerings from providers in this Magic Quadrant.
• Level 3's network coverage of Asia/Pacific and Africa is weaker than its coverage of other regions, causing it to rely more on NNI partners.

NTT Communications

NTT Communications has finalized the integration of Virtela Technology Services. This not only gives it enhanced coverage from the many network providers connected to Virtela's 50 global POPs but also has enabled it to launch a class-leading suite of NFV capabilities, including cloud-based WAN optimization, firewalls, IPS, secure Web gateway and Internet Protocol (IP) VPNs, from the same 50 POPs. NTT Communications has also restructured its sales organization from a country structure to a global structure with a standard service approach. NTT Communications should be considered by most enterprises with global WAN needs, and it is especially strong for enterprises requiring extensive coverage in Asia and/or Africa.

Strengths

• Gartner clients report that NTT Communications delivers high service quality and good support.
• NTT Communications offers a class-leading global suite of NFV services, including WAN optimization, firewalls, intrusion detection system (IDS)/IPS and VPN termination.
• Dimension Data, which is owned by NTT Group, brings NTT Communications into network service opportunities, supplementing NTT Communications' own sales force and helping deliver on-site capabilities globally.

Cautions

• Compared with other leading providers in this Magic Quadrant, NTT Communications' global brand recognition is low.
• NTT Communications currently offers MPLS connectivity only to cloud providers in Japan, but it is planning to extend this to other regions during 2015.
• NTT Communications' own network has more-limited coverage than other leading providers, especially in Latin America, the Middle East and Russia, where it uses NNI connections to enhance its coverage.

Orange Business Services

Orange Business Services remains one of the strongest global providers, with special strength in emerging markets and an emphasis on its people as a differentiator. Orange's VPN Galerie cloud interconnect offering supports a number of key cloud services but has now been matched or exceeded by comparable offerings from some other providers. Orange is also adapting its Dailymotion CDN to enable the delivery of corporate video streams. Orange's deal to source all of its U.S. access from AT&T does not seem to have affected its U.S. pricing or service offerings. Orange Business Services should be considered by all enterprises with requirements for managed global networks.

Strengths

• Orange Business Services still has the broadest network coverage in terms of countries connected to its own network.
• Orange has embraced standardized hybrid WANs, making it much more price-competitive than its previous MPLS-dominated approach.
• Orange has enhanced its MPLS to Internet gateways and added a new MPLS class of service just for Internet traffic to its network, which will enhance its ability to provide connectivity to Internet-based cloud services.

Cautions

• Gartner clients still report that Orange Business Services can be somewhat inflexible and bureaucratic in areas such as expediting installations.
• Although Orange Business Services' network reach is very broad, it lacks the depth of some of its competitors in some major markets, including the U.K. and Germany.
• Orange is piloting some software-defined networking (SDN) capabilities in the French market but has not announced any plans for global SDN or NFV services.

Sprint

Sprint continues to grow its MPLS and Internet footprint, adding multiple new POPs in 2014. However, Sprint's ownership by Softbank does not appear to be making any significant difference to the company's global networking offering, with no significant acceleration in the rate of network growth or portfolio enhancements. Sprint is planning to introduce SDN and NFV into its infrastructure within the next 24 months, but it currently has no specific plans for SDN, NFV or virtual CPE enterprise services. U.S. multinational enterprises and enterprises with connectivity requirements that align with Sprint's network footprint should consider the vendor for global networks.

Strengths

• Gartner clients report Sprint is easy to do business with, with good portal functionality and good global account management.
• Sprint does not charge for features such as quality of service (QoS) and multicast, making its offering simpler and more flexible.
• Sprint frequently combines its strong SIP offering with its MPLS services.

Cautions

• Sprint's network POPs and sales coverage are not as extensive as those of leading providers in this Magic Quadrant, although it can deliver service to most locations through a combination of its own network and those of its partners.
• Sprint lacks a productized full hybrid WAN capability.
• Sprint currently has fewer cloud interconnect options for its MPLS network or other specific cloud-enabling features than leading providers in this report, although it plans to deliver MPLS access to Equinix's cloud exchange early in 2015, enabling connectivity to multiple leading cloud providers.

Tata Communications

Tata Communications has been expanding its Ethernet and MPLS network footprint in the past 12 months to enable improved data center interconnect, as well as to support its IZO Private service offering, which connects to major cloud services such as Amazon, Microsoft Azure and Equinix. This also includes CDN services. Tata Communications has also launched a unique new global connectivity service, IZO Internet WAN, which offers end-to-end SLAs with predictable routing across multiple Internet service provider networks, with managed encryption, monitoring and reporting. Tata Communications should be considered for global networks, especially those requiring strong coverage of Africa, the Middle East and the Asia/Pacific region, particularly India.

Strengths

• Tata Communications' MPLS and Ethernet networks have especially strong coverage of India, the Asia/Pacific region, the Middle East and Africa.
• The vendor has a strong SIP trunk offering, available in the Asia/Pacific region, India, North America and Europe.
• Tata Communications data center interconnect now connects its Ethernet and MPLS core network to more than 50 third-party/cloud data centers.

Cautions

• The vendor's network coverage in the Americas (especially South America) and Eastern Europe is weaker than other leading providers in this Magic Quadrant.
• Tata Communications does not currently offer managed LAN and WLAN services, and for more-advanced managed services, it partners with system integrators, such as HCL or Wipro.
• Tata Communications has a hybrid WAN offering, but it is not yet able to be configured via the company's portal.

Telefonica

Telefonica's Global Solutions unit focuses on 1,500 of the very largest multinationals with the aim of being the integrated service provider for these enterprises for their complete communications and networking needs. Outside of Western Europe and Latin America, Telefonica lacks deep network coverage. Telefonica has also been slow to introduce standardized services, such as hybrid IP WAN and managed LANs. Telefonica has instead invested in NNI partnerships and a strong integration capability to enable it to deliver a seamless experience from multiple underlying providers and customized solutions for larger accounts. However, during 2014, it delivered its first hybrid Internet/MPLS WAN and also introduced features such as rapid-deployment cellular access, application visibility and WAN optimization. Telefonica has recently started to support MPLS connectivity to external cloud services in Europe in conjunction with Equinix and plans to extend this to the Americas and Asia/Pacific during 2015. Enterprises with networks that require strong coverage of Europe and Latin America should consider Telefonica.

Strengths

• Telefonica's Latin American and European MPLS network coverage is strong, especially in Spain, the U.K., Germany and multiple countries in Latin America.
• Telefonica has strong professional services capabilities and experience with managed WANs.
• Telefonica's global support service capabilities and experience with LAN, WAN and remote-access management are rated highly by its customer base, as communicated to Gartner via client inquiries.
• The vendor's SIP trunk offering has class-leading coverage in over 60 countries globally.

Cautions

• Outside Western Europe and Latin America, Telefonica has weak network and sales coverage, compared with leading providers in this Magic Quadrant.
• Telefonica still lacks the portfolio of network services to support enterprise adoption of cloud IT services that are available from leading providers included in this Magic Quadrant.
• Telefonica does not yet offer standardized managed LAN/WLAN globally, but it is planning this for the end of 2015.

Telstra

Telstra is the incumbent network service provider in Australia, and it is well-established as a regional network service provider in Asia/Pacific, with a reputation of reliability, good local service and support capabilities. Since 2011, Telstra has invested in its global capabilities, but outside of the Asia/Pacific region, Telstra's network reach is currently more limited than other global providers, with a main focus on the U.S. and European market. Telstra has very limited own network infrastructure in emerging regions, such as Latin America, Africa, the Middle East and Eastern Europe. However, Telstra has extensive NNI agreements to extend network reach where needed, and it has uniquely added instrumentation to measure SLA compliance across NNI connections. Telstra should be considered by organizations requiring strong network coverage in Asia/Pacific, but with less extensive requirements in other regions.

Strengths

• Telstra is a strong network service provider across Asia/Pacific, with a range of enterprise network services based on an extensive submarine cable infrastructure.
• Telstra has enhanced its MPLS service with application optimization, as well as visibility and control.
• Gartner clients using Telstra for international networking, mostly in Asia/Pacific, report good service quality.

Cautions

• Telstra's global service delivery experience is limited and still mainly based on services to and from Asia/Pacific.
• Telstra does not yet offer a full hybrid Internet/MPLS WAN service with active/active traffic forwarding.
• Telstra does not yet offer managed LAN/WLAN, but it is planning this for the end of 2015.
• Telstra's network service offerings to support enterprise use of cloud services are more limited than those of its leading competitors.

T-Systems

T-Systems did not respond to requests for information, or for a review of the draft contents of this research. Therefore, Gartner analysis is based on other credible and accepted public sources. T-Systems international networking is increasingly focused on the Central European markets, where it has national fixed or mobile operations. In these markets, it is developing a number of innovative capabilities under its all-IP program. Outside of these markets, T-Systems has not been expanding its global network and has made only modest enhancements to its global network service portfolio. Enterprises with networks that are heavily weighted toward Europe should consider T-Systems.

Strengths

• T-Systems has strong MPLS network coverage in Europe, especially Central Europe.
• The vendor has a standardized hybrid IP WAN offering, including 3G and 4G cellular access.
• T-Systems has a strong portfolio of managed LAN and WLAN services, including per-port utility options.

Cautions

• T-Systems' coverage outside of Europe is less extensive than that of leading providers in this Magic Quadrant and is not being expanded, with T-Systems instead relying in NNI partnerships to cover many emerging markets.
• Outside of the Central European markets, T-Systems is not developing its own SIP capabilities, instead relying on reselling SIP trunks from other providers.
• T-Systems approach to connecting users to cloud services is currently focused on connectivity to cloud services hosted in its own data centers.

Verizon

Verizon has a very extensive global network, including national and metropolitan fiber infrastructure in the U.S. and several European and Asia/Pacific markets, with a broad portfolio of managed network services from hybrid WANs to managed LANs. Verizon is leading other global providers in promoting the use of Ethernet access to its network services in place of traditional leased-line access, offering more capacity and flexibility. Verizon has re-engineered many of its back-office processes around its Rapid Delivery initiative, which allows it to provide rapid quotes for new services. Most, but not all, international access lines are now included in this process. Global enterprises of all sizes should consider Verizon for both managed and unmanaged networks.

Strengths

• Verizon's Secure Cloud Interconnect offering connects its MPLS network to large numbers of cloud providers in a wide range of locations globally and with increasing levels of automation and self-service.
• Verizon's SIP trunk offering has a rich set of service features, allowing complete PSTN replacement in a growing number of countries.
• Verizon's Rapid Delivery initiative allows it to provide fast quotes globally and improved delivery times for U.S.-based locations.

Cautions

• Gartner clients continue to report service quality issues with Verizon, although the level of issues is declining.
• Verizon has priced its Rapid Delivery services separately from its legacy services, leading to some customer confusion.
• Verizon has no specific plans for global NFV or SDN services.

Vodafone

Vodafone has significantly grown the former Cable & Wireless Worldwide network, adding large numbers of additional points of presence and integrating this network with its own national networks in many markets in Europe, Africa and Asia. Vodafone's growth plans will significantly extend network reach in North America, South America, Asia/Pacific and the Middle East, as well as adding more POPs in both Europe and Africa. Combined with the integration of additional Vodafone national networks, this will lead to it having one of the largest global networks within 12 months. Vodafone has fully integrated sales into one global organization with a consistent engagement model and increased the number of enterprise salespeople by 40%. Enterprises with significant coverage needs in Europe, Africa and Asia/Pacific, especially India, should consider Vodafone.

Strengths

• Vodafone has a global MPLS backbone now covering 60 countries and extensive national networks in 23 markets, including the U.K., Germany, Italy, Spain, South Africa and India, which when fully rolled out will give Vodafone market-leading network scale.
• The vendor is beginning to leverage its mobile capabilities to enhance its fixed networking offering, with capabilities such as using cellular connections as peak WAN capacity and combining managed Wi-Fi with in-building cellular coverage.
• Vodafone now offers granular application visibility and controls embedded in its IP VPN, which is available on demand on a per-site basis.

Cautions

• Vodafone's coverage of North and South America is light, compared with leading providers in this Magic Quadrant, although it has plans to roll out an extensive network in these regions.
• Vodafone's service quality has improved but is still not on par with leading providers in this Magic Quadrant.
• Vodafone does not currently offer any enhanced cloud connectivity services, although it has plans to develop this capability.
• Vodafone does not currently have a global SIP trunk solution, instead reselling services from leading regional providers.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

Telstra — Met our revised inclusion criteria

Dropped

CenturyLink — Did not meet our revised inclusion criteria

Global Cloud Xchange (formerly Reliance Globalcom) — Did not meet our revised inclusion criteria

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

• They must offer data (enterprise WAN; at a minimum, MPLS), voice and managed network services to enterprise customers, having a minimum of 10 POPs in each of the following regions: Asia/Pacific, North America and Europe.
• They must have sales offices and actively sell enterprise networking services in a minimum of 25 countries, covering, at a minimum, Europe, North America and Asia/Pacific, and not just sell networking services in one region for delivery in the other regions.
• They must generate at least $200 million in direct global enterprise network service revenue annually (excluding domestic business and wholesale).
• They must not simply resell network services from another global provider or simply resell service from regional providers in any of the European, North American and Asia/Pacific regions.

Ability to Execute

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 culture are more challenging than if applicable to only one country.

Source: Gartner (January 2015)

Completeness of Vision

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. Network service providers 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. While not prescriptive, visionary providers should have a clearly articulated strategy and market traction in evolving areas, including SIP trunks, networking for cloud services and NFV and/or virtual CPE.

Source: Gartner (January 2015)

Quadrant Descriptions

Leaders

Vendors in the Leaders quadrant are performing well today and maintain a stable organization with a clear vision of market direction. They deliver comprehensive portfolios of network services, across broad geographies, with good service quality. They address the global networking needs of a broad range of enterprises is terms of size, geographic distribution and vertical industry. Leaders shape the direction of the market by extending their coverage, developing new class-leading capabilities and new commercial models, and deploying these at scale.

Challengers

These vendors are strong in execution, but narrower than Leaders in their vision for taking market leadership. Their focus is more on established network services and geographies, and they are typically followers of the market innovations created by Leaders and Visionaries.

Visionaries

Visionaries have market-leading plans for the future in terms of geographic and/or network service innovation. However, their current capabilities are not class-leading in terms of scope and/or quality.

Niche Players

Companies in the Niche Players quadrant may focus on a particular segment of the market, as defined by characteristics such as size, vertical sector, geographic coverage or technology, and be strong providers for those requirements. However, they lack the current capabilities to address the needs of the broader range of enterprises or the vision to significantly alter their position in the market.

The number of organizations requiring global networking services continues to grow, due to globalization and the growing adoption of cloud services, which are often hosted in markets that differ from the point of consumption. Organizations' appetite for more bandwidth shows no signs of diminishing. IT centralization, cloud adoption and the continued growth of applications such as video, machine-to-machine communications and big data are the primary drivers. Reliability and performance control are growing in importance, as business processes become ever-more IT-dependent; in addition, IT architectures (such as thin-client computing) place ever-greater reliance on the network. This demand is being met not only by the global providers featured in this Magic Quadrant, but also via the option of using multiple regional operators as an alternative to a single global provider. This intense competition is driving down unit prices for global networking services. However, in a market where there are no meaningful price lists, enterprises will obtain the best prices only via competitive procurement and strong negotiation.

The number of global network service providers meeting our inclusion criteria has reduced slightly in this edition of the Magic Quadrant. However, several regional network service providers, especially from the Asia/Pacific region, have global ambitions and are expanding their coverage, and while not meeting all of our inclusion criteria for this research, may still offer a viable option for some organizations.

New global network proposals are predominantly for managed hybrid IP WANs combining Internet (local access and VPNs) with MPLS, deployed in active/active configurations with different applications using the most appropriate link type. Ethernet services (virtual private line and virtual private LAN service) are principally used for data center interconnection. Different combinations of services can be used to obtain different service levels appropriate to each enterprise location.

Access for larger locations is typically optical Ethernet at 10 Mbps, 100 Mbps, 1 Gbps or even 10 Gbps in developed markets. For smaller, less critical locations, broadband (increasingly, "superfast broadband" such as VDSL, cable modem or passive optical network [PON]) is being used, supplemented with cellular connectivity for backup and rapid deployment. Traditional leased-line access and satellite connectivity are still common in emerging markets. An increasing number of global WANs incorporate managed application visibility and/or optimization, with some providers now offering application visibility by default. In developed markets, enterprises tend to purchase access lines with much higher speeds than they currently require, with the actual port capacity limited to their current needs, allowing them to easily and quickly upgrade capacity in response to changing requirements.

Downward pressure on global network service prices is relentless, but the response from providers varies, with some focusing on extending their own networks, while others are relying heavily on NNI connections to partners to improve their regional coverage. Most providers are using a blend of these approaches. Network service providers are also moving to exploit any national networks owned by their parent companies, such as the fixed national backbones supporting their mobile networks. Other measures that providers are adopting to reduce their costs include automation and IT system consolidation. This is moving the market to a more standardized and industrialized model, where any deviation from the standard offering will require the provider to deploy a fully custom-made solution, at a much higher cost and lacking in important characteristics, such as self-service portal functionality.

Enterprises' adoption of cloud IT service delivery is driving significant transformation of their WAN architectures, adding new origin points for applications. Network service providers are now deploying a range of capabilities to address enterprises' cloud connectivity needs, including extending their MPLS networks to major cloud service centers, allowing local Internet breakout with cloud-based security to improve access to Internet-based cloud services. NFV can enable WAN optimization and other services to be introduced into the network path between the cloud service and the enterprise locations. These enhancements are a major area of competitive differentiation between providers.

SIP trunk adoption continues to grow, as many organizations have deployed centralized IP telephony platforms and are now turning to voice trunk consolidation to reduce costs and improve flexibility. National regulations often inhibit SIP adoption, especially cross-border consolidation. Coverage, including the availability of inbound and outbound calls, special rate numbers, resilience features, pricing, and various call routing options, are key differentiators.

With over 80% of global WAN deals being delivered on a managed-service basis by network service providers, enterprises are looking to extend their adoption of managed services into additional areas. Bundling managed LAN and wireless LAN with managed WAN services continues to grow in popularity, due to the commoditization of these functions and the desire to reduce the number of suppliers involved in the end-to-end delivery of the network, especially when the WAN and LAN are used to support IP telephony or unified communications. Standardized utility services with portal visibility are increasingly common.

The adoption of hybrid WANs is moving the network buying discussion away from technologies and more toward outcomes and service levels. Providers continue to improve their SLAs, with more realistic objectives and more meaningful penalties for failing to meet those objectives, increasingly including the right to cancel the service in the event of chronic breach. Installation lead times, a pain point for many enterprises with global networks, are now starting to be covered by SLAs, and providers are making considerable efforts to improve delivery times, although they are often frustrated by local access providers. The ever-increasing speeds of cellular services are making this technology more useful as a rapid deployment solution, as well as providing a truly diverse backup option.