Magic Quadrant for Global Network Service Providers

26 March 2013 ID:G00239842
Analyst(s): Neil Rickard, Robert F. Mason

VIEW SUMMARY

Demand for global network services continues to grow, while competition between global providers and from regional sourcing is driving down prices. Only competitive procurement can make these improved prices accessible. The challenge is to ensure service quality is not compromised in the process.

Market Definition/Description

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

  • WAN services, predominantly managed, including Multiprotocol Label Switching (MPLS) and IPsec VPNs, and Ethernet services
  • Voice services, including switched and dedicated voice and 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, application-fluent networking, managed LANs and managed network security services. Integrators, virtual operators and carriers are included, but only if they provide and manage offerings that include the underlying networking services.

Hosted services (such as hosted Internet Protocol [IP] telephony or unified communications), cloud services (such as infrastructure as a service [IaaS]), and stand-alone managed and professional services (not sold as part of the network) are not considered in this research, because they are addressed in other Gartner research.

Magic Quadrant

Figure 1. Magic Quadrant for Global Network Service Providers
Figure 1.Magic Quadrant for Global Network Service Providers

Source: Gartner (March 2013)

Vendor Strengths and Cautions

AT&T

Financial strength and the depth of global network coverage in the major markets remain strong selling points for AT&T. In China and Latin America, the vendor's Global Virtual partnering model provides a deeper level of interconnection than a pure network-to-network interface (NNI) approach. AT&T has a strongly tiered approach to global enterprise accounts, with a primary focus on approximately 1,700 multinational accounts. The vendor tends to focus strongly on MPLS services when designing solutions, although it also offers Internet VPN services. Its extensive portfolio of owned infrastructure allows for more control of the delivery model and includes options for regional diversity. Multinational companies with a presence that includes a significant number of U.S. locations should strongly consider AT&T for global voice and data services.

Strengths
  • AT&T has good infrastructure in the major markets globally, and its Global Virtual approach to extending its reach provides a strong solution in China and large parts of Latin America.
  • Gartner clients have reported significant improvements in service delivery and change management in India, a region that had been a challenge for AT&T.
  • AT&T remains in a strong financial position to invest in network capacity and to layer additional services onto its core global network.
Cautions
  • Current gaps in Latin America and Africa network coverage have caused some organizations to use regional network providers to complement AT&T, although AT&T has plans to address these gaps with its Global Virtual model.
  • Gartner clients continue to report that AT&T invoicing is complex and that billing issues are a source of frustration; however, AT&T has plans to improve these processes.
  • While the vendor devotes a lot of attention and resources to larger multinational companies and enterprises with a significant U.S. presence, it does not always give equivalent focus to midsize multinational enterprises, which have networking needs predominantly outside the U.S.

BT Global Services

BT Global Services is continuing its network consolidation and service simplification process, resulting in good service quality for these standard items, such as WANs and associated managed services. The vendor is not quite as good at nonstandard offerings, such as providing mobile services. It continues to enhance its WAN service portfolio with new offerings such as multiservice access, and is investing to track and enhance the customer experience. BT Global Services has strong global coverage; Europe and Latin America are the regions where it is at its strongest. The vendor is making incremental investments in the Middle East, Africa and the Asia/Pacific region. BT Global is least competitive in the U.S. market. It recently significantly reorganized into five geographic regions and nine vertical sectors, and invested in marketing and internal tools to improve the customer experience. Organizations of all sizes should consider BT Global Services for their global networking needs, especially for larger managed network service requirements.

Strengths
  • The vendor's already extensive coverage continues to grow with new MPLS, and Ethernet points of presence (POPs), NNIs and even metro fiber networks deployed in 2012 and planned for 2013.
  • BT Global Services' service quality remains high, especially for standard services from its extensive portfolio, such as IP Connect (MPLS) and Connect Applications (WAN optimization/application performance management [APM]).
  • The vendor has a strong road map for supporting enterprise cloud networking needs (not just its own cloud services), including Internet service expansion, more Internet gateways, cloud-embedded optimization and security services, and virtualized customer premises equipment (CPE).
Cautions
  • Although BT Global Services has a strong U.K. SIP trunk offering, outside the U.K., its SIP trunk offering is more basic in features and limited in coverage than those of its leading competitors.
  • The vendor's commercial offerings have not been as innovative as some other providers included in this Magic Quadrant. For example, it does not offer standard utility (per port/per seat) LAN or WAN offerings, although it does deliver these on a custom basis.
  • BT Global Services struggles to match the pricing of U.S. domestic providers for networks with substantial needs in that market.

Cable&Wireless Worldwide

Cable&Wireless Worldwide has been acquired by Vodafone. Vodafone has already begun to fund initiatives to improve Cable&Wireless Worldwide's customer experience. We expect that Vodafone will also integrate its existing national fixed line networks with those of Cable&Wireless, and, most importantly, will leverage its extensive sales force to sell Cable&Wireless Worldwide services. On the other hand, Vodafone is giving out mixed messages regarding its commitment to the fixed network market, selling some parts of its Gateway Pan-African fixed networking unit to PCCW. In the short term, we have seen little improvement in the customer service issues reported by Cable&Wireless clients. Enterprises with significant coverage needs in the U.K. and/or India should consider Cable&Wireless Worldwide.

Strengths
  • As part of Vodafone, we expect Cable&Wireless to integrate its global network assets, which are especially strong in the U.K. and India, with existing Vodafone fixed networks in markets such as Africa, Germany, Spain and Italy within 12 to 24 months.
  • Vodafone will be able to offer Cable&Wireless fixed networking products through its extensive worldwide sales force, and we have already seen early examples of commercially combined fixed and mobile offerings.
Cautions
  • Gartner clients are still reporting a high level of dissatisfaction with Cable&Wireless Worldwide's service quality, both for new site implementation and ongoing support. Vodafone's initiatives to improve Cable&Wireless' customer experience must address these issues within the next six months or Cable&Wireless Worldwide will lose its credibility as a global provider.
  • Cable&Wireless' network service portfolio is weak in areas such as SIP trunks, hybrid IP WANs and networking services to support enterprise cloud requirements.
  • The combined network and sales coverage of Cable&Wireless Worldwide and Vodafone still lacks depth in some important markets, including the U.S., France, Latin America, China and Russia.

CenturyLink

CenturyLink is a new addition to this year's Magic Quadrant for Global Network Service Providers, meeting all our inclusion criteria for the first time. CenturyLink has integrated the networks and sales teams from its Savvis acquisition into its Enterprise Markets Group. In addition to the U.S., CenturyLink's sales and operational resources are concentrated in London, Singapore, Hong Kong and Tokyo. While the current CenturyLink network is modest in size, compared with the leading providers in this Magic Quadrant, it is investing in further network expansion and portfolio development. Midsize multinational enterprises with needs that are focused on the major markets should consider CenturyLink.

Strengths
  • CenturyLink continues to receive positive feedback from Gartner clients regarding service delivery and ongoing support for core networking services.
  • The vendor has demonstrated commercial flexibility, including custom SLAs, that has allowed enterprises to target solutions for specific performance requirements.
Cautions
  • CenturyLink has less coverage via owned infrastructure than other providers in this research, especially in growth geographies, such as Latin America, Eastern Europe and India.
  • The vendor can sometimes struggle with CPE support, especially in developing markets.
  • Although aggressive road maps are in place, CenturyLink's portfolio is currently lacking in areas such as SIP trunks, managed LANs and hybrid WANs.

Level 3 Communications

Level 3 Communications has made substantial progress in integrating its acquisition of Global Crossing, to the point where it is now able to turn its attention to network and portfolio expansion. Network expansion in the Asia/Pacific region is beginning to address this historically weak geography for the vendor, while expansion of the number and reach of Level 3's own metro fiber networks in Europe and the Americas will allow it to be competitive for high-speed connections in these markets. Gartner clients are reporting improving service quality from Level 3. The vendor should be considered by enterprises with networks that require strong coverage in North and/or South America.

Strengths
  • Level 3's network coverage is especially strong in the U.S., Latin America and Western Europe.
  • The vendor's pricing for services, especially high-speed services, is very attractive in markets where it has good network coverage.
  • Level 3 now has enterprise voice offerings, including SIP trunks, to leverage its extensive voice wholesale business.
Cautions
  • The vendor's network and sales coverage lacks strength in the Asia/Pacific region, Eastern Europe and Africa, compared with Leaders in this Magic Quadrant.
  • Level 3's managed service portfolio is more basic than that of the Leaders in this Magic Quadrant in areas such as managed LAN.
  • The vendor's plans to support enterprise cloud networking needs are primarily focused on inter-data-center connectivity, rather than end-user connectivity.

NTT Communications

NTT Communications continues to invest in growing its global network (for example, with a major new network deployed in Europe). The vendor has a reasonable portfolio of network-related managed services, although some of these come from other companies in the NTT Group. While Dimension Data remains a separate company within the NTT Group, it frequently brings NTT Communications into opportunities, providing a valuable supplement to NTT Communication's limited global sales coverage, when compared with other leading providers in this Magic Quadrant. NTT Communications is strongest for enterprises with networks that have a major focus on the Asia/Pacific region and/or Africa.

Strengths
  • The vendor has a flexible hybrid WAN offering, including MPLS and Ethernet unified access.
  • NTT Communications is starting to address enterprises' broader cloud networking needs with its Cloud Conscious Network initiative.
  • The vendor has a reputation for delivering high-quality services.
Cautions
  • Although NTT Communications continues to grow its network, its sales coverage remains much smaller than that of its leading competitors, especially outside the Asia/Pacific region.
  • The vendor's voice services (such as SIP trunks), WAN optimization/APM and managed LAN services still lag behind those of the Leaders in this Magic Quadrant, although Dimension Data can help NTT Communications in some of these areas.
  • NTT Communication's brand recognition as a global network provider is much lower than that of the leading providers in this Magic Quadrant.

Orange Business Services

Orange Business Services has the broadest network coverage of any global operator, and is in the process of further improving its depth of coverage by using the national infrastructures of other Orange entities around the world. The vendor has recently taken the unusual step of contracting with AT&T for all its U.S. access, but it is still too early to tell how effective this will be in improving price competitiveness and service levels. Orange Business Services' Ethernet services are now widely deployed, but is operated as a separate platform from its MPLS services, making multiservice access more challenging. Orange Business Services should be considered for managed network service deals of all sizes.

Strengths
  • The vendor's MPLS network has coverage in more countries than any other network service provider, and its Ethernet services are also widely deployed, compared with its competitors.
  • Orange Business Services has a very broad portfolio of managed network services and also offers a customized program called Communications as a Service.
  • The vendor is commercially responsive (for example, proactively proposing benchmarking of existing deals as an alternative to RFPs).
Cautions
  • Orange Business Services focuses on its own cloud services and its Business VPN Galerie cloud services brokering, and is less focused on addressing the broader cloud networking needs of enterprises.
  • Although the vendor continues to make efforts to improve its agility and responsiveness, Gartner clients report that it is not especially proactive and can be inflexible and unresponsive, especially regarding ad hoc pricing requests and expediting urgent installations.
  • Orange Business Services tends to focus its sales efforts on MPLS solutions, with hybrid WANs only offered as a custom option.
  • While broad in reach, the vendor's network lacks infrastructure depth in several major markets, such as the U.K. and Germany, where it uses partners, making it less cost-effective for networks requiring substantial domestic coverage in those markets. The impact of the AT&T deal on Orange Business Services' U.S. pricing has yet to be seen.

Reliance Globalcom

Reliance has combined its substantial domestic Indian enterprise business with its Globalcom international business, giving it the potential to extend parts of its substantial domestic Indian managed service portfolio to other markets. Reliance Globalcom makes more extensive use of third-party networks and NNIs than any other provider in this research, and has developed a set of comprehensive SLAs to unify the resulting customer experience. This approach can be particularly cost-effective when large numbers of highly distributed branch locations require connections. The vendor uses Dell SecureWorks to provide security services, which brings it strong capabilities, but will make embedding security deeply into its own network offerings more challenging, compared with most other providers that have in-house security capabilities. Reliance Globalcom should be considered for global managed service requirements, especially for midsize global organizations.

Strengths
  • Reliance Globalcom has a strong hybrid IP WAN offering that combines multiple network types with overall management, WAN optimization and APM, with a flexible solution design approach.
  • The vendor has developed a best-in-class set of SLAs for its network services, regardless of the underlying provider.
  • Reliance Globalcom has a strong focus on emerging markets, in which its integrator approach is particularly appropriate.
Cautions
  • Reported service quality for both new site installation and problem management, although improving, is still patchy, compared with leading providers in this market.
  • Reliance Globalcom's global voice and SIP trunk offerings are significantly less developed than those of its competitors; it is mostly simply reselling services from other providers.
  • The vendor has not developed specific networking solutions to support enterprise cloud challenges, apart from its CloudCover APM offering.

Sprint

Sprint continues to grow its global MPLS network, which now has sufficient on-net reach for many multinational enterprises, while Ethernet coverage has also been expanded through partners. Sprint differentiates itself in international MPLS pricing by not charging port premiums for class-of-service tiers and offering simplified contracts that are not heavily customized. On the service front, Sprint has expanded its global SIP trunk footprint and has leveraged its wireless assets for additional U.S. access options. U.S. multinational enterprises and enterprises with connectivity requirements that align with Sprint's growing backbone should consider the vendor for international networks.

Strengths
  • Sprint continues to deliver simplified pricing and packaging of services that makes data services easy to procure and that align with the existing demand set.
  • Gartner clients provide consistently positive feedback on the timeliness, granularity, transparency and accuracy of network information delivered through Sprint's Compass portal.
  • Sprint competes aggressively on price when leveraging its U.S. base, and does not charge a premium for multicast and class-of-service tiers for international locations.
Cautions
  • Sprint has been increasing its wireline investments and SoftBank may bring an additional infusion of investment; however, the vendor's current level of wireline capital investment trails that of the leading providers in this Magic Quadrant.
  • Sprint is adding nodal coverage strategically, but is heavily dependent on partners for emerging regions, such as Africa.
  • Sprint has limited sales coverage and marketing visibility outside the U.S.

T-Systems

T-Systems' network and sales coverage is strongest in Europe, but in other regions, it has significantly less coverage than its leading competitors. T-Systems is taking a partnering approach, using NNIs, to improve its networking geographic footprint, rather than growing its own network. However, it has been enhancing its managed service capabilities in areas such as hybrid networking, APM and cellular access. It is also beginning to address cloud networking needs, beyond supporting its own cloud services, with capabilities such as virtualized edge devices and dynamic bandwidth adjustment. T-Systems is strongest for enterprises seeking managed services, especially when their footprint is weighted toward Europe or in the automotive manufacturing sector.

Strengths
  • T-Systems has a flexible approach to WAN solution design with a broad portfolio of hybrid networking options, including WAN optimization, cellular access and APM.
  • The vendor has a well-developed LAN offering, including utility (price-per-port) services.
  • Gartner clients report a high level of satisfaction with the quality of experience associated with T-Systems' services.
Cautions
  • T-Systems' global SIP trunk capabilities are significantly behind those of the leading providers in this Magic Quadrant, in terms of coverage and functionality.
  • The vendor has limited sales coverage outside of Europe.
  • T-Systems has done little in the past 12 months to improve its low market awareness as a network service provider, as opposed to an IT service provider.

Tata Communications

Tata Communications is continuing its evolution from a supplier of regional networks and point products to a more solution-oriented provider, supporting larger global enterprise networks. The vendor has innovative service offerings, including its Network-as-a-Service (NaaS) per-seat utility WAN offering. Tata Communications should be considered by organizations with global networks that require strong coverage of the Asia/Pacific region, especially India, Africa and the Middle East.

Strengths
  • Tata Communications offers hybrid IPsec, MPLS, Ethernet WAN services; however, its Ethernet services are delivered from a separate platform, limiting WAN and access integration options.
  • The vendor has a strong network security capability.
  • Tata Communications has launched global SIP trunk services, allowing enterprises to leverage its extensive voice resources.
  • Its global network is especially strong in India and the Middle East, and is expanding from South Africa to cover most of Africa.
Cautions
  • Tata Communications' network footprint is weaker in the Americas, especially South America.
  • The vendor lacks a global managed LAN services.
  • Tata Communications does not currently have any services targeted at supporting enterprise cloud networking needs.

Telefonica

Telefonica has expanded the list of companies directly addressed by its Telefonica Global Solutions group from 250 to 800 of the largest multinational enterprises and corporate customers. The global network is also used to support Telefonica's national businesses in markets such as Spain, Germany, the U.K. and Latin America in addressing other enterprises with international requirements. However the national businesses have widely differing approaches to fixed network services. The vendor continues modest expansion of its global networks, particularly its Ethernet service network. We have yet to see any significant differentiation arising from its equity stake in China Unicom. Telefonica should be considered by enterprises with networks that require strong coverage of Europe and Latin America.

Strengths
  • Telefonica's global network has especially strong coverage in Europe and Latin America.
  • The vendor has a class-leading global SIP trunk capability, with a broad range of enterprise features and extensive global coverage.
  • Telefonica Global Solutions offers the largest multinational companies a very customer-centric approach to service design and delivery.
Cautions
  • Only a defined list of 800 large enterprises are directly served by the Telefonica Global Solutions group, with other companies handled by country-level businesses, which have differing approaches to fixed networking.
  • Although networking for cloud services features in Telefonica's long-term planning, there are no short-term plans for such offerings.
  • The vendor only offers managed LAN services on a project basis, not as a standardized service offering.
  • Telefonica's network and sales coverage is weaker in Africa, much of the Asia/Pacific region and Eastern Europe.

Verizon

Verizon's international data service volumes are growing at a faster pace than its U.S. services, and the vendor is responding with expansion of its own infrastructure on a limited basis and with considerable additional partnering. This is especially evident in Ethernet, where Verizon now has over 200 partners extending service in 32 countries. In addition to private data, the vendor also continues to grow its footprint for SIP trunk services, which are now available in 11 countries in EMEA and several in the Asia/Pacific region, along with its core U.S. service. While coverage has been a strong point, network availability and service delivery remained challenges for Verizon in 2012, especially with distributed enterprises, and remain a concern for multinational companies. Verizon continues to grow its Long Term Evolution (LTE) access to its Private IP offering in the U.S., an initiative that should mediate some availability issues. Outside the U.S., Verizon has suffered delays in offering cellular WAN access, after its chosen partner Vodafone acquired rival global operator Cable&Wireless Worldwide. Global enterprises of all sizes should consider Verizon for managed and unmanaged networking and voice services.

Strengths
  • Verizon has broad network coverage and considerable depth, down to the metropolitan fiber network in most major economies, and continues to aggressively add to its Ethernet coverage through regional partner NNIs.
  • Verizon has extended its reach in Brazil, Russia, India and China, including diverse private IP nodes and Ethernet NNI partners, closing the gap with the other leading operators in these formerly weaker geographies.
  • The vendor has a comprehensive portfolio of managed services, including security, LAN and voice services.
Cautions
  • Gartner clients continue to report challenges with service delivery, especially timely new site installation, in the U.S. and EMEA.
  • Verizon has been less aggressive than its peers in offering unified global agreements, or in taking over existing provider agreements to facilitate a unified customer experience.
  • Verizon is now delivering far more of its WAN services via NNIs, which can impact the service experience, compared with using its own network infrastructure, so enterprises need to ensure that the customer experience and SLAs of these services are sufficient to meet their needs.

Vendors Added or 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 appearing 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. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Added

CenturyLink now meets our inclusion criteria.

Dropped

No vendors were dropped from this Magic Quadrant.

Inclusion and Exclusion Criteria

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

  • They must offer data (enterprise WAN, at a minimum MPLS), voice and managed network services to enterprise customers, delivering service and/or having POPs in a minimum of 25 countries and in at least three of the following geographic regions: North America, EMEA, Asia/Pacific and Latin America.
  • They must actively sell enterprise networking services to organizations in a minimum of 25 countries and in at least three geographic regions (out of North America, EMEA, Asia/Pacific and Latin America), and not just sell networking services in other regions for delivery in those markets.
  • They must generate at least $200 million in direct global enterprise network service revenue annually (excluding domestic business and wholesale).
  • They must not just resell network services from another global provider.

Evaluation Criteria

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 cultural problems become more complicated and prolonged than when applicable to only one country.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product/Service

High

Overall Viability (Business Unit, Financial, Strategy, Organization)

Standard

Sales Execution/Pricing

High

Market Responsiveness and Track Record

High

Marketing Execution

Standard

Customer Experience

High

Operations

Standard

Source: Gartner (March 2013)

Completeness of Vision

We look for a thorough understanding of what customers 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 APM.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

Standard

Marketing Strategy

Low

Sales Strategy

Standard

Offering (Product) Strategy

High

Business Model

Standard

Vertical/Industry Strategy

Standard

Innovation

High

Geographic Strategy

High

Source: Gartner (March 2013)

Quadrant Descriptions

Leaders

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

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

Visionaries

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

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.

Context

The number of organizations requiring global networking services continues to grow, due to globalization and cloud services, which are often hosted in different markets from the point of consumption. Organizations' appetite for more bandwidth shows no signs of diminishing, with video and big data, coupled with IT centralization, as 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 growing number of 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 tends to drive down unit prices for global networking services. However, in a market where there are no meaningful price lists, enterprises will only obtain the best prices via strong negotiation and competitive procurement.

Market Overview

As previously mentioned, this edition of the Magic Quadrant has seen the number of global network service providers meeting the inclusion criteria rising yet again, with CenturyLink joining the providers included. Vodafone acquired Cable&Wireless Worldwide, which, although not affecting the total number of providers, brings the resources of another major provider to bear on this market.

Continuing intense competition has caused market prices for global network services to continue to decline. Providers have responded to this pressure with limited extensions of their own networks, but principally by making much more extensive use of NNIs to interconnect with regional and national providers. This is especially true for large emerging markets, such as Russia, Brazil, India and China, where the scale of the market makes building an extensive national presence expensive and where competitive market access may be restricted. From an enterprise perspective, the drawback of this trend is that, with most global providers using the same local partners, there may be little effective competition for sites in those markets. Depending on the degree of integration the global provider has carried out, the service may not be completely equivalent (in terms of SLAs and service visibility) to services delivered by the provider's own network.

Another part of the response of many of the global providers to price pressure is to rationalize their back-office functions by consolidating staff, offshoring and ultimately automating as many functions as possible. In 2011, this cost cutting caused a noticeable dip in average service quality. While 2012 saw average quality stabilize, individual providers still had issues. Enterprises should keep a close watch on any transformational initiatives at their chosen provider(s) and ensure they have strong SLAs, including exit clauses in the event of severe problems.

The types of networking service that enterprises are purchasing are evolving. In most cases, a hybrid IP WAN, using a blend of MPLS, Internet VPNs and possibly Ethernet services, will be appropriate to meet different availability, performance and capacity needs at different enterprise locations. Leading service providers are now aligning their network service offerings by SLA (for example, gold, silver, bronze), rather than by technology.

In developed markets, access is likely to be predominantly Ethernet over copper or fiber, complemented by broadband, such as DSL and 3G or 4G cellular for rapid deployment and backup. High-capacity Ethernet access allows for bandwidth on-demand services, where capacity can be adjusted in hours, not weeks or months. New installations of classical leased line access, such as T1 and E1, are typically limited to emerging markets. A growing number of enterprise networks have application-fluent capabilities, with application visibility and/or WAN optimization, to reflect the increasing criticality of application performance for most enterprises.

With IP telephony well-established and the growing use of other IP voice applications (such as Microsoft Lync), IP voice trunks using SIP are growing in popularity; however, the complexities of voice regulation mean that there is a wide degree of variation between providers regarding the options for creating hybrid public switched telephone network (PSTN)/voice over IP (VoIP) networks.

With more enterprises turning to cloud services to deliver some of their applications, enterprise networks need to evolve. Almost all the network service providers in this Magic Quadrant have their own IaaS offerings, which are not considered in this research because they are addressed in their own Magic Quadrant. The desire to promote and add value to their own cloud services, by taking steps such as preconnecting their MPLS services to their data centers, has distracted network service providers from addressing the broader cloud networking needs of enterprises. However leading service providers are starting to recognize these needs and to develop offerings such as increasing the number of Internet gateways from their MPLS networks, thus allowing direct Internet access from VPN-connected branch sites, offering high-capacity Ethernet services preconnected to major hosting centers (not just their own data centers) and offering WAN optimization for cloud services. However, no global network service provider currently has the full range of networking for cloud services that enterprises will ultimately need.

LANs and Wireless LANs have become commodities and enterprises are seeking to have fewer providers in the delivery chain, especially when hosted unified communications is delivered over the WAN and LAN. As a result, enterprise demand for managed LAN services (including wireless LAN) is growing, especially when combined with managed WAN services to support distributed smaller offices, where local support might otherwise be difficult to arrange. Most of the providers in this Magic Quadrant offer these services, but the actual offerings vary considerably, from simple equipment resale and maintenance to full per-port, per-month utility service models.

The market for global network services is not just evolving in technological terms, but also in commercial terms. Improvements in SLAs include stronger consequences for breaking them, making them more inclusive (for example, site to site, including access lines), and automating the SLA reporting and credit process. In the current economic climate, enterprises are demanding and obtaining increased flexibility in their commitments in network service contracts. Some providers are experimenting with new utility service approaches, such as selling WAN services on a per-seat basis, with application-level SLAs. These abstracted services typically require a high degree of customization to meet the enterprise's particular needs, but can offer a service that provides the exact outcomes from the network that the enterprise requires.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word-of-mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.