Magic Quadrant for Global Network Service Providers

20 March 2014 ID:G00258971
Analyst(s): Neil Rickard, Robert F. Mason

VIEW SUMMARY

New service offerings, such as SIP trunks and new enterprise demands, such as supporting cloud IT, are changing the global network service market. Add a lack of price transparency and it becomes vital that enterprise network buyers adopt competitive sourcing practices for their global networks.

Market Definition/Description

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

  • WAN services, predominantly managed, including Multiprotocol Label Switching (MPLS), IPsec VPNs and Ethernet WAN services
  • Voice services, including switched and dedicated voice and 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, 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 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 the established markets.

Service portfolio evaluation gave particular weight to the availability of standardized hybrid WAN offerings, as this is now the default WAN architecture. Another key area of evaluation is providers' networking offerings to support enterprise use of cloud services (not just the providers' own cloud offerings). These capabilities include extending MPLS networks into cloud centers, with corresponding commercial terms, distributed Internet breakout and associated security services, virtualized customer-premises equipment (CPE) and cloud-based WAN optimization. The last major area of portfolio evaluation is SIP trunking, which is gaining traction rapidly in global networks.

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

Magic Quadrant

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

Source: Gartner (March 2014)

Vendor Strengths and Cautions

AT&T

With MPLS coverage in 184 countries, AT&T has shifted its focus to growing its Ethernet Virtual Private Line (VPL) and Virtual Private LAN Service (VPLS) offers, which are now available in 39 countries. AT&T is using a series of partnerships under its "Global Virtual" initiative to cover emerging markets, such as Latin America and China. In addition to its own cloud services offerings, AT&T has also introduced NetBond, a solution that brings other cloud providers "on net" with its MPLS network. In the first half of 2014, smaller U.S. sites will be able to take advantage of integrated offers that bundle MPLS with 4G backup, while providing a single SLA for availability, and this will then be rolled out globally. 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
  • With good existing global coverage and a strong financial position, AT&T has the ability to invest in enhancements to its network capacity and to layer additional services onto its networks.
  • The vendor has an extensive SIP trunking portfolio that includes growing global coverage, advanced features, and support for burstable and highly available configurations.
  • AT&T has programs in place to enable its clients to easily migrate from its legacy VPN platforms, such as Enhanced VPN (EVPN), to scalable infrastructure centered on its new AT&T Virtual Private Network (AVPN) service platform.
Cautions
  • While AT&T has MPLS, Internet VPN and Ethernet services, it does not have a standardized hybrid WAN offer that combines these services, and thus has to deal with each case on a custom basis.
  • Although AT&T's Global Virtual model should allow it to provide service to clients more rapidly than expanding the vendor's own network in those regions, it may not deliver fully equivalent services to AT&T's networks, and reduces the incentive for AT&T to invest in its own network and sales coverage in those regions.
  • Gartner clients continue to report that AT&T invoicing is complex and that billing issues are a source of ongoing frustration.
  • Some multinational customers consider AT&T to be less flexible and more difficult to do business with than some of the smaller providers included in this Magic Quadrant.

BT Global Services

BT Global Services continues to grow its own network, not only expanding its MPLS and Ethernet (VPL and VPLS) service footprints, but also adding 22 new points of presence (POPs) to its Internet footprint to help support the growing use of Internet VPNs and to access cloud services. Additional developments to support enterprise use of cloud services include extending its network to additional cloud centers, increasing the number of MPLS to Internet gateway locations and plans for cloud-based WAN optimization. The vendor is also starting to include application visibility by default in its larger deals. BT should be considered by all enterprises with global networking requirements.

Strengths
  • BT has a broad portfolio of managed services, including a formalized hybrid WAN offering, cellular WAN access for rapid deployment and backup, and managed LAN on a per-port utility basis.
  • BT has recognized the impact of cloud services on an enterprise's WAN and has already started to implement a broad array of network services to address these needs.
  • BT has strong vertical industry network solutions, especially in the financial services sector.
Cautions
  • The vendor's network and sales coverage in the U.S. is not as strong as that of its U.S.-headquartered competitors.
  • BT's SIP trunk service is not available in as many countries as that of some of its competitors.

CenturyLink

With direct global enterprise revenue of approximately $207 million in 2013, CenturyLink remains smaller and more narrowly geographically focused than many of its larger competitors included in this Magic Quadrant. Savvis has been rebranded CenturyLink Technology Solutions, and the integrated CenturyLink sales teams have grown significantly in 2013, now selling services in 85 countries, as well as through a number of indirect channels. In addition to growing its MPLS and Ethernet (predominantly Ethernet Private Line) footprints, CenturyLink has added 100G metro rings in London, Singapore, Tokyo and Hong Kong, and it selectively leverages network-to-network interconnections (NNIs) for added reach. The vertical industry focus for CenturyLink is primarily centered in the federal and financial services areas, while recent product initiatives have also included comprehensive and simplified service bundles available on a per-seat basis in the U.S.

Strengths
  • CenturyLink receives consistently strong feedback on service delivery for core transport services, with delivery often earlier than quoted intervals.
  • The vendor competes very aggressively on price for targeted international opportunities that align well with its footprint and service portfolio.
Cautions
  • CenturyLink's own network has significantly less coverage than other providers in this research, especially in growth geographies such as Latin America, Eastern Europe and India.
  • The vendor's service portfolio in areas such as unified communications, hybrid WANs, WAN optimization, managed LAN and network offerings to support cloud services is not as comprehensive as many of its larger competitors.
  • Voice is a small portion of CenturyLink's enterprise revenue, and its SIP trunk offer is currently only available in the U.S. It lacks key features like Internet Protocol (IP)-IP failover, nomadic 911 and burstable capacity.

Level 3 Communications

Level 3 Communications has continued to invest in expanding its own network, adding POPs in growth regions like the Middle East and Africa, where it has not traditionally been strong, as well as extending capillarity in Central and Eastern Europe and Latin America. Capacity upgrades allow the vendor to offer 100G wavelength services in select geographies, and Level 3 is building out its cloud-connected ecosystem with Amazon Web Services (AWS) Direct Connect. Level 3 has been adapting its extensive wholesale voice portfolio for its enterprise customers, with its Voice Complete SIP trunk service now supporting nomadic 911 and Primary Rate Interface (PRI) handoff for a more seamless transition from time division multiplexing (TDM) voice; however, this is predominantly U.S.-based and is only now being extended to Europe. Level 3 should be considered by enterprises of all sizes, especially those with high network density in North or South America, or Western Europe.

Strengths
  • The vendor's network coverage is especially strong in the U.S., Latin America and Western Europe.
  • Level 3 is gaining visibility as a vendor that is easy to do business with and less encumbered by process than many of its competitors.
  • The vendor competes aggressively on price, and is gaining traction as a secondary vendor in large, multisourced enterprise agreements.
Cautions
  • Despite recent expansions, 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 lacks a productized hybrid WAN offering.
  • Level 3's managed service portfolio is more basic than that of the Leaders in this Magic Quadrant, especially in areas such as managed WAN optimization and managed LAN.

NTT Communications

NTT Communications has acquired Virtela Technology Services, a U.S.-based managed network service provider. This not only gives it enhanced coverage from the many network providers connected to Virtela's 50 global POPs, but also gives it access to Virtela's market-leading, cloud-based WAN optimization and security capabilities. NTT Communications has some of the most aggressive plans of all global carriers for the introduction of software-defined networking (SDN) and network function virtualization (NFV). NTT Communications should be considered by most enterprises with global WAN needs, and is especially strong for enterprises requiring extensive coverage in Asia and/or Africa.

Strengths
  • Gartner clients report that NTT Communications and Virtela both deliver high service quality.
  • The vendor plans to combine its MPLS, Ethernet and Internet networks, which are especially strong in Asia and Africa, with Virtela's managed network services, which will significantly improve NTT Communications' service coverage and pricing.
  • Dimension Data, which is owned by NTT Holding Co., often brings NTT Communications into network service opportunities, supplementing NTT Communications own sales force and helping deliver on-site capabilities globally.
Cautions
  • NTT Communications' networking portfolio is not as well-developed as leading providers included in this Magic Quadrant in some areas, such as cellular WAN access, managed LAN/wireless LAN (WLAN) and networking for cloud services, although Virtela's cloud-based WAN optimization services should help with the latter.
  • Although the acquisition of Virtela has improved NTT Communications' sales coverage in the U.S., it remains weaker in other areas outside Asia, including Europe and Latin America. Compared with other leading providers in this Magic Quadrant, NTT Communications' global brand recognition is low.

Orange Business Services

Orange Business Services has moved to integrate its WAN offers, including combining its Ethernet (VPL and VPLS) and MPLS service backbones, allowing greater capacity and multiservice access. It has also embraced hybrid IP WANs (combining MPLS and Internet VPNs), which has allowed it to make more cost-effective offers than its previous MPLS-only designs. Efforts to integrate the national MPLS networks of other companies in the Orange Group and single-sourcing U.S. access to AT&T do not seem to have significantly affected service price or quality positively or negatively. Orange Business Services should be considered by all enterprises with managed global networking requirements.

Strengths
  • Orange Business Services still has the broadest network coverage of any global provider, with especially strong coverage in the difficult Russian market.
  • The vendor has standardized hybrid IP WAN and multiservice access offers.
  • Its Business VPN Galerie allows direct MPLS connections to cloud services, including Microsoft Office 365.
Cautions
  • Gartner clients report that Orange Business Services can be somewhat inflexible and bureaucratic in areas such as expediting installations.
  • Although additional services are planned, the vendor does not presently have solutions to support the networking of other cloud services, beyond the limited range of partners available in its VPN Galerie.
  • 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.

Reliance Globalcom

Reliance Globalcom (recently rebranded Global Cloud Xchange) combines its own networking assets — principally an intercontinental backbone and a strong Indian national network — with a network integration approach, combining other providers' networks into an overall WAN offer. The vendor plans to enhance its services to expand its service perimeter to cloud providers, which the vendor calls Cloud Cover; however, the leading providers in this Magic Quadrant are already deploying such solutions. Reliance Globalcom should be considered by organizations requiring globally managed hybrid WANs, especially where emerging markets form a significant part of the requirement.

Strengths
  • Reliance Globalcom has a strong standardized hybrid IP WAN offering, with comprehensive SLAs.
  • The vendor has a focus on addressing all emerging markets, where its network integration approach is especially valuable.
Cautions
  • While Reliance Globalcom's service quality is gradually improving, it is still lower than that of the leading providers in this Magic Quadrant.
  • The vendor's global SIP trunk offer is still at the planning stage.
  • Reliance Globalcom's network service offerings to support enterprise use of cloud services are more limited than those of its leading competitors.

Sprint

Japan's SoftBank has acquired an 80% stake in Sprint, enhancing Sprint's ability to invest in its networking services. Sprint has modestly grown its own MPLS network footprint — its international SIP trunk offer is now available in the U.S. and Western Europe, and third-party Ethernet access is now available in 117 countries. International MPLS and Internet customers can take advantage of seven classes of service with no incremental class of service (CoS) charges. With significant investment in U.S. 4G capacity, Sprint is beginning to leverage these assets for hybrid networking, although enterprises often prefer to use their own Internet access with Sprint's managed IPsec tunneling service. 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 has packaged its SIP trunk offer with its MPLS platform; as a result, one-third of its SIP sales are combined with MPLS services.
  • Gartner clients provide positive feedback on Sprint's global account management approach and the ease of doing business with Sprint, including a strong portal capability.
  • The vendor competes aggressively on price when leveraging its U.S. base, and does not charge a premium for multicast and CoS for international locations.
Cautions
  • Sprint lacks sales coverage and market visibility outside the U.S., although it is engaged in joint sales activities with SoftBank, principally in Japan.
  • Despite a growing U.S. DSL and 4G footprint, and having managed IPsec services, Sprint has not productized hybrid WAN offers and is not as strong as leading providers included in this Magic Quadrant in some other managed service areas, such as managed LAN/WLAN and WAN optimization/application performance management (APM).
  • Sprint is pursuing an MPLS-based, cloud-connected ecosystem, but trails leading providers in terms of commercially available cloud interconnect capabilities.

Tata Communications

Tata Communications has been aggressively expanding its network footprint and growing its managed service capabilities, and has now reached the point where it is capable of addressing a much broader range of enterprise networks. Its Ethernet services are especially strong, and Tata Communications is rolling out a range of cloud-enablement network offerings specifically to support enterprise cloud-based applications, including the extension of its network into major cloud-hosting centers, content delivery network (CDN) services and cloud-based WAN optimization. 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 are growing rapidly, with 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, including support for video calling.
  • Tata Communications has a strong range of network security services.
Cautions
  • The vendor's network coverage in the Americas (especially South America) is weaker than other leading providers in this Magic Quadrant.
  • Tata Communications does not currently offer managed LAN and WLAN services.

Telefonica

Telefonica's Global Solutions unit focuses on 800 of the very largest multinationals and has a deep sales engagement capability to support those clients. Telefonica's national businesses (in Spain, the U.K., Germany and multiple Latin American countries) are responsible for sales to other multinationals based in those markets. However, this leaves Telefonica with patchy sales coverage, especially because even those country units each has differing approaches to the fixed networking market. The vendor is planning to develop networking services to support enterprise adoption of cloud IT services, but currently has little capability in this space. Telefonica has undertaken very limited network expansion in the past 12 months, but has enhanced its portal capabilities and is in the process of introducing global managed LAN services. 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. and Germany.
  • The vendor's SIP trunk offer has class-leading coverage in over 60 countries globally.
Cautions
  • Telefonica lacks a standardized hybrid IP WAN offering.
  • Although under development, Telefonica currently 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.
  • Outside Europe and Latin America, Telefonica has weak network and sales coverage, compared with leading providers in this Magic Quadrant.

T-Systems

T-Systems' international networking efforts are increasingly focused on the European market, where its parent company Deutsche Telekom has acquired the Central European network provider GTS Central Europe. Aside from this, however, T-Systems' investment in growing its network coverage and portfolio is modest (for example, with its SIP service being sourced from third parties). Enterprises with networks that are heavily weighted toward Europe should consider T-Systems.

Strengths
  • T-Systems has strong 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, with little evidence of expansion into important emerging markets.
  • The capabilities and coverage of T-Systems' SIP services are not as strong as those of the leading providers in this Magic Quadrant.
  • T-Systems currently lacks specific networking products to support enterprise adoption of cloud IT services.

Verizon

Verizon continues to grow its already substantial global network. The vendor's Secure Cloud Interconnect program involves extending its network into major public cloud hosting centers, starting with its own Terremark centers and those of Equinix. Although valuable, this initiative is currently focused on providing connectivity and initially addresses infrastructure as a service (IaaS) offerings, with other types of cloud services to be added in 2014. Verizon will need additional capabilities to fully address enterprises' other cloud needs, such as security and acceleration. Verizon has a major investment program underway to re-engineer its back-office processes, but it will be some time before the benefits of these initiatives are felt at the global level. Gartner clients report problems with Verizon in the areas undergoing transformation, especially new site delivery. Global enterprises of all sizes should consider Verizon for both managed and unmanaged networks.

Strengths
  • Verizon continues to expand its already strong global network coverage, and is consolidating its IP and Ethernet (VPLS) backbones, which will further improve network capacity.
  • Verizon has a broad network service portfolio, including productized hybrid WAN, SIP trunking and managed LANs available globally.
  • Verizon's Secure Cloud Interconnect program extends its network to major cloud hosting centers, such as Equinix.
Cautions
  • Gartner clients continue to report problems with Verizon's service quality, especially on-time delivery of new sites.
  • The vendor still lacks cellular WAN access options outside the U.S., although these should begin to be rolled out during 2014.

Vodafone

Vodafone is in the process of combining the former Cable&Wireless Worldwide network, which it acquired in 2012, with its national fixed-network assets in 23 markets. This would give Vodafone market-leading network scale; however, this integration is far from complete. The resulting coverage will still be much lighter in the Americas than its leading competitors. Vodafone is also struggling to resolve the service quality issues that affected Cable&Wireless Worldwide. Although it has a lot of work ahead before it can be considered a leading global provider, it has the financial wherewithal to achieve this and is already introducing innovative capabilities from its mobile heritage into its fixed portfolio. Enterprises with significant coverage needs in Europe, Africa and India should consider Vodafone.

Strengths
  • Vodafone has a global MPLS backbone covering 41 countries and extensive national networks in 23 markets, including the U.K., Germany, Italy, Spain, South Africa and India, which, when integrated, will give Vodafone market-leading network scale.
  • The vendor is beginning to leverage its mobile capabilities to enhance its fixed networking offer, with capabilities such as using cellular connections as peak WAN capacity, and combining managed Wi-Fi with in-building cellular coverage.
Cautions
  • Compared with leading providers in this Magic Quadrant, Vodafone's coverage of North and South America is comparatively light.
  • Vodafone's service quality has improved, but is still poor, compared with most other providers in this Magic Quadrant.
  • The vendor is not as advanced in some of the more sophisticated network solutions, such as hybrid WANs and cloud network initiatives, and its portal functionality is limited, compared with the leading providers in this Magic Quadrant.

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

  • Vodafone — acquired Cable&Wireless Worldwide

Dropped

  • Cable&Wireless Worldwide — acquired by Vodafone

Inclusion and Exclusion 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, delivering service and/or having POPs in a minimum of 25 countries, and in at least three geographic regions (out of North America, EMEA, Asia/Pacific and Latin America)
  • They must actively sell enterprise networking services to organizations in a minimum of 25 countries, 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 simply 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 if applicable to only one country.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product or Service

High

Overall Viability

Medium

Sales Execution/Pricing

High

Market Responsiveness/Record

High

Marketing Execution

Medium

Customer Experience

High

Operations

Low

Source: Gartner (March 2014)

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 changing customer needs. The portfolio should be broad enough to satisfy the evolving requirements of most enterprises, not just a specific vertical industry or customer company size. While not prescriptive, providers with class-leading vision 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

Medium

Marketing Strategy

Medium

Sales Strategy

Medium

Offering (Product) Strategy

High

Business Model

Medium

Vertical/Industry Strategy

Low

Innovation

High

Geographic Strategy

High

Source: Gartner (March 2014)

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 the growing adoption of 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 machine-to-machine communications 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 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.

Market Overview

Although a number of regional network service providers have global ambitions and are expanding their coverage, the number of global network service providers meeting our inclusion criteria has remained constant. Vodafone appears for the first time in this Magic Quadrant, having completed its acquisition and rebranding of Cable&Wireless Worldwide; however, this is a replacement, rather than a net new addition to the market.

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 NNIs to partners to improve regional coverage. Most providers are using a mix 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 mobile networks. We have also seen acquisitions to improve coverage and/or portfolios, such as T-Systems' parent company Deutsche Telekom's acquisition of GTS and NTT Communications' acquisition of Virtela.

While consolidation and the off-shoring of back-office functions to reduce costs was a major theme in 2011 and 2012, most providers are now focusing on automation and IT system consolidation to reduce costs. However, this can cause their service offerings to become more standardized, so enterprises must be aware that demanding any functionality outside these standard offers can lead to them having a fully custom-made solution at a much higher cost and lacking in important characteristics, such as self-service portal functionality.

New global network proposals are predominantly for managed hybrid IP WANs combining Internet (local access and VPNs) with MPLS and often Ethernet (VPL and VPLS) services, with the latter principally 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. For smaller, less critical locations, broadband (increasingly, "super-fast broadband" such as VDSL 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 much higher speed access lines 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.

Enterprises' adoption of cloud IT service delivery is driving significant transformation of their WAN architectures, adding new origin points for applications. After a slow start, network service providers are finally recognizing this evolution and are starting to deliver service enhancements to assist enterprises in supporting these applications. These enhancements include extending their network services, such as MPLS, into major cloud hosting centers, preconnecting to major cloud services providers, and delivering cloud-based security and optimization services. Although improving rapidly, with almost daily announcements of cloud-related network service enhancements, there is still a long way to go before all the providers in this Magic Quadrant will have a full suite of the cloud-related network capabilities that enterprises could benefit from, making this a major area of competitive differentiation between providers.

The adoption of SIP trunks is gaining considerable momentum as many organizations have deployed centralized IP telephony platforms and are now turning to voice trunk consolidation to reduce costs and improve flexibility. The market for SIP trunks has been given additional momentum not only by improvements in the providers' offerings, but also because many telecom operators have started discussing the end of life of existing ISDN services. National regulations often inhibit SIP adoption, especially cross-border trunk consolidation.

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 services, 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.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for 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: 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/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 to 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.