Magic Quadrant for Network Services, Global

14 January 2016 ID:G00274439
Analyst(s): Neil Rickard, Bjarne Munch


Global enterprise networks are entering a time of rapid technological evolution, driven by enterprise adoption of cloud IT service delivery and availability of new SDN technologies. With growing differentiation among providers, enterprises must ensure supplier roadmaps are aligned with their needs.

Market Definition/Description

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 VPNs, 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 LANs and wireless LANs (WLANs), and managed network security services.

What's Changed?

Within these service areas, differentiating capabilities include managed hybrid WANs, cloud connectivity services and public switched telephone network (PSTN) replacement with SIP trunks. Emerging capabilities include software-defined networking (SDN)/software-defined WAN (SD-WAN), network function virtualization (NFV), and virtual customer premises equipment (vCPE) — all aimed at increasing the flexibility and agility of enterprise networks.

Magic Quadrant

Figure 1. Magic Quadrant for Network Services, Global
Figure 1.Magic Quadrant for Network Services, Global

Source: Gartner (January 2016)

Vendor Strengths and Cautions


AT&T is a leading U.S. incumbent operator, with an extensive global networking business. AT&T is moving away from its previous strategy of relying on large-scale partnerships to provide coverage of emerging markets, and is planning to invest in refreshing and growing its own network and services. This will allow it to offer globally the advanced services it already provides in the U.S., such as its SDN-based Network on Demand capability and its Network Functions on Demand via its Universal CPE, which delivers network functions on industry-standard hardware. U.S.-headquartered enterprises or those with at least 20% of their sites in the U.S. should consider AT&T for their global networking services.

  • Over the next 18 months, AT&T is planning to upgrade its global network to support its Network on Demand capability and expand its network coverage into additional emerging markets.
  • In 1H16, AT&T plans to roll out globally its vCPE offering, called Network Functions on Demand, which will enable AT&T customers to consume services on demand.
  • The vendor's cloud connectivity offering, NetBond, supports more cloud providers than any comparable offering, and has now been extended to multiple locations in Europe and the Asia/Pacific region, from its previous U.S.-centric footprint.
  • AT&T has been slow to roll out globally services that it offers in the U.S., especially SIP trunking and cellular WAN access.
  • Gartner clients frequently cite price as an issue when considering AT&T, especially for sites in emerging markets such as the Middle East, Africa and Latin America, where it has lighter network coverage.
  • Gartner clients without a significant U.S. presence report low levels of sales interest from AT&T in their global network business.

BT Global Services

BT Global Services is orienting its messaging around its Cloud of Clouds theme, which, in the short term, is mostly focused on providing network connectivity to cloud services. BT continues to expand its extensive global network, which is especially strong in Europe and Latin America. The vendor should be considered by all enterprises with global networking requirements.

  • BT's Cloud Connect service provides connectivity to a wide range of cloud providers in multiple regions, and uniquely offers WAN optimization for cloud services.
  • The vendor has a strong hybrid WAN offering, which it has been enhancing by expanding its Internet backbone to improve Internet VPN performance, and extending its application visibility and optimization capabilities, which it includes by default in its larger deals.
  • BT supports a wide range of vertical network service offerings, from its Radianz financial services network to specific network solutions for media, retail and life sciences.
  • Gartner clients are reporting increased levels of dissatisfaction with the quality of the vendor's service delivery and support. BT has confirmed that it is taking action to improve customer service, including additional resources and improved processes.
  • BT has not yet delivered any SD-WAN, SDN or NFV WAN capabilities; however, it has plans to support Cisco's Intelligent WAN (IWAN) in 1H16 and is investigating other SD-WAN platforms.
  • The vendor's network and sales coverage in the important U.S. market is not as strong as that of its U.S.-headquartered competitors.

Level 3 Communications

Level 3 Communications has completed its acquisition of U.S. domestic network service provider tw telecom, thus not only improving its already extensive coverage of the U.S. market, but also giving Level 3 the foundation for its Adaptive Network Control Solutions. Level 3's coverage is strong in North America, Latin America and Europe, but is weaker elsewhere. The vendor has continued to grow its network outside the U.S., and has added cellular WAN access for backup and rapid delivery. It has enhanced its Cloud Connect service, connecting to additional providers and adding more locations. However, it is very focused on infrastructure as a service (IaaS) providers, rather than SaaS providers. Level 3 should be considered for global networking requirements by enterprises of all sizes.

  • Level 3 offers converged Ethernet access, allowing it to offer Ethernet, Internet access MPLS services and SIP trunks over a single access line.
  • The vendor will expand its Adaptive Network Control Solutions SDN offering globally in 2016.
  • Level 3 has expanded its managed network service capabilities, including its security services.
  • Level 3's network coverage of the Asia/Pacific region and Africa is weaker than its coverage of other regions, causing it to rely more on network-to-network interface (NNI) partners.
  • Level 3's principal SIP trunk offering, Voice Complete, is currently only available in the U.S., with other regions having more basic SIP trunk services. However, the vendor plans to expand Voice Complete to multiple European countries in 2016.
  • The vendor lags behind leading global providers in offering NFV, vCPE and SD-WAN services, with no current services offered. However, it has plans for vCPE and NFV deployments in 2016.

NTT Communications

NTT Communications is the incumbent provider in Japan and one of the leading regional providers in the Asia/Pacific region. The vendor continues to expand its network globally to address the U.S. and Western Europe. Through its acquisition of Virtela, NTT Communications gained a world-leading suite of NFV services, which it plans to enhance by adding SDN and vCPE services. NTT Data and Dimension Data, both separate companies within the NTT Group, frequently introduce NTT Communications into accounts, and its African network has been integrated with NTT's global network. NTT Communications should be considered by enterprises with global WAN needs, and it is especially strong for enterprises requiring extensive coverage in the Asia/Pacific region and/or Africa.

  • NTT Communications is unique in having a broad suite of NFV services, including WAN optimization, firewalls, an intrusion detection system (IDS)/intrusion prevention system (IPS) and VPN termination, deployed in over 50 nodes globally.
  • NTT Communications' global network is especially strong in the Asia/Pacific region and Africa.
  • Gartner clients report that the vendor delivers high service quality and good support.
  • Compared with other leading providers in this Magic Quadrant, NTT Communications' global brand recognition is low, leading to it missing out on being considered for opportunities.
  • NTT Communications' own network has more limited coverage than other leading providers, especially in Latin America, the Middle East and Eastern Europe, where it uses NNI connections to enhance its coverage.
  • While the vendor offers MPLS connections to leading cloud providers in Japan (via its Multi-Cloud Connect service), the platform currently has very limited deployment outside Japan, although expansion to additional countries is planned for 2016.

Orange Business Services

Orange Business Services remains one of the strongest global network service providers, with special strength in emerging markets. However, the vendor has been consolidating its network, reducing the number of points of presence (POPs) in the smaller markets and using NNIs (especially Ethernet NNIs) to serve these markets. This should help Orange Business Services reduce its costs, and does not appear to have impacted service quality. Its Business VPN Galerie offering connects leading cloud providers to its MPLS services in multiple regions. The vendor should be considered by all enterprises with requirements for managed global networks.

  • Even allowing for its network consolidation, Orange Business Services still has the broadest network coverage in terms of countries connected to its own network, with strength in all the major emerging regions.
  • The vendor has enhanced its standardized hybrid WANs with a cloud-based VPN capability from Akamai.
  • Orange Business Services has a very mature approach to network sourcing and contracting (for example, proactively proposing benchmarking in lieu of RFPs when contracts are approaching renewal).
  • 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.S., U.K. and Germany.
  • As the vendor consolidates its network, it will have to rely more heavily on NNI partnerships, which will make the manageability, quality and ability to roll out new services more challenging.
  • Although Orange Business Services has announced its intention to deliver SDN/NFV and vCPE services in 2016, it has not yet announced specifics of the services to be launched.


Sprint places strong emphasis on using its global networking capabilities to support its SIP trunking, unified communications and, ultimately, its Workplace-as-a-Service offering — in the latter case, offering the entire stack, including the WAN, on a per-seat basis. This has led to Sprint's deals frequently combining both WAN services and SIP trunking. Sprint's ownership by SoftBank does not appear to have made any significant difference in its coverage, portfolio or sales of global networking. Sprint offers Ethernet Private Line services, but does not have a global virtual private LAN service (VPLS) offering. The vendor should be considered by U.S.-headquartered multinationals and other multinationals looking for a combination of MPLS and SIP services in the major economies.

  • Sprint has a strong global SIP trunk offering, which it frequently combines with its MPLS network services.
  • The vendor currently provides WLAN capability on a per-seat model as part of its Workplace-as-a-Service offering. In 1Q16, Sprint plans to deliver WLAN as a service domestically and to expand to markets outside the U.S. later in 2016.
  • Gartner clients report that Sprint is easy to do business with, with good portal functionality and good global account management.
  • Sprint's network and sales coverage are not as extensive as those of leading providers in this Magic Quadrant, although it can deliver service to almost any business location through a combination of its own network and those of its partners.
  • The vendor lacks a managed hybrid WAN capability and only has limited cloud connectivity options for its MPLS network, via Equinix Cloud Exchange.
  • Apart from plans to launch an SD-WAN solution in 2H16, Sprint has no specific plans for global SDN, NFV or vCPE.

Tata Communications

Tata Communications has invested in a broad range of service expansion in the last 12 months, including a compete refresh of its MPLS core and adding 19 additional MPLS POPs in Africa, the Middle East and the Asia/Pacific region. The vendor has enhanced and expanded its Izo portfolio, which now includes Izo Internet WAN, enhanced Internet access with end-to-end SLAs, together with Izo Private Connect and Izo Public Connect, for connecting to cloud services via Ethernet, MPLS or direct Internet connectivity. Tata Communications should be considered for global networks, especially those requiring strong coverage of Africa, the Middle East and the Asia/Pacific region.

  • Tata Communications' MPLS and Ethernet networks have especially strong coverage of India, the Asia/Pacific region, the Middle East and Africa.
  • The vendor's Izo Internet WAN is a unique enhanced Internet offering that can be incorporated into the provider's hybrid WAN offering, which has itself been enhanced with path selection capabilities and greater coverage.
  • Tata Communications has a strong SIP trunk offering, available in the Asia/Pacific region, India, North America and Europe.
  • The vendor's network coverage in Latin America and Eastern Europe is weaker than that of other leading providers in this Magic Quadrant.
  • Tata Communications lacks current capabilities and specific plans for SD-WAN, SDN and NFV functionality.
  • The vendor does not currently offer managed LAN and WLAN services globally, instead partnering with system integrators to deliver this functionality.


Telefonica's Business Solutions is a dedicated unit focused on the enterprise, small or midsize business, and multinational segments. Telefonica has very deep coverage in Latin America, where it owns multiple national fixed and/or mobile operators, and good coverage in Europe, especially in some of the larger markets. To enhance its coverage beyond this footprint, in 2015, Telefonica added nearly 80 NNIs to those it has with other providers. MPLS connectivity to external cloud services is delivered in conjunction with Equinix, and is now available in Latin America, U.S., Europe and the Asia/Pacific region. Enterprises with networks that require strong coverage of Europe and Latin America should consider Telefonica.

  • Telefonica's Latin American and European MPLS network coverage is strong, especially in Spain, the U.K., Germany and across multiple countries in Latin America.
  • The vendor's SIP trunk offering has PSTN replacement coverage in over 60 countries globally, more than any other provider evaluated in this Magic Quadrant.
  • Telefonica's global support service capabilities and remote management are rated highly by its customer base, as communicated to Gartner via client inquiries.
  • Outside Western Europe and Latin America, Telefonica has weaker network and sales coverage, compared with the leading providers in this Magic Quadrant.
  • Telefonica currently has no global NFV or SDN services, but has plans to deliver SD-WAN and service chaining in 2016.
  • While Telefonica does support hybrid WANs, cloud connectivity and cellular WAN access, its portfolio of network services is weaker in these areas than those of the Leaders in this Magic Quadrant.


Telstra is the incumbent network service provider in Australia, and is a strong regional network service provider in the Asia/Pacific region. Telstra is expanding its global coverage, especially in the U.S. and Europe, adding 21 POPs in 2015. Outside of the Asia/Pacific region, Telstra's network reach is still more limited than other global providers, so Telstra uses NNI agreements to extend its coverage. It has uniquely added instrumentation within its partners' networks to ensure the performance of these connections. In 1H15, Telstra completed its acquisition of Pacnet, another Asia/Pacific provider, strengthening its network in the region, especially in China. Telstra should be considered by organizations requiring strong network coverage in the Asia/Pacific region, but with less extensive requirements in other regions.

  • Telstra is a strong network service provider across the Asia/Pacific region, with a range of enterprise network services based on an extensive submarine cable infrastructure.
  • As part of the Pacnet acquisition, Telstra gained Pacnet's SDN and NFV platform, called Pacnet Enabled Network (PEN), which it has expanded to 26 POPs globally, with bandwidth on demand, in addition to virtualized routers, firewalls and WAN optimization.
  • Gartner clients using Telstra for their global networks continue to report good service quality.
  • Telstra's global service delivery experience is limited and still mainly based on services to and from the Asia/Pacific region.
  • The vendor has more limited global SIP trunking and direct Internet connectivity than leading providers, and there is no global support of 3G-/4G-based WAN access.
  • Telstra does not yet support MPLS-/IP-based cloud service connectivity globally, but does support Ethernet connectivity to Amazon Web Services (AWS).


T-Systems did not respond to requests for information, or for a review of the draft contents of this research. Therefore, Gartner's 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, and interconnects these using the fiber-optic infrastructure it gained from the acquisition of regional provider GTS. In these markets, it is developing a number of innovative capabilities under its All-IP program, such as cloud VPN services. 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.

  • 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, which it has recently enhanced with a cloud-based VPN capability from Akamai and support for Cisco's IWAN.
  • T-Systems has a strong portfolio of managed LAN and WLAN services, including per-port utility options.
  • 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 relying on NNI partnerships to cover many emerging markets.
  • Outside of the Central European markets, T-Systems is not developing its own SDN, NFV, vCPE or SIP trunk services, addressing SIP trunking requirements by reselling SIP services from other providers.
  • T-Systems' approach to connecting users to cloud services is limited to connectivity to cloud services hosted in its own data centers or via project-specific cloud gateways to public cloud providers.


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, especially when combined with its bandwidth on-demand capabilities. Global enterprises of all sizes should consider Verizon for both managed and unmanaged networks.

  • Verizon offers hybrid networking with managed SD-WAN and bandwidth on-demand capabilities similar to SDN, and plans to add NFV-based security services by 2H16.
  • Verizon's Secure Cloud Interconnect enables MPLS and Ethernet connectivity to a wide range of cloud providers in multiple regions.
  • 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 and improve overall delivery times.
  • The quality of Verizon's service delivery and support is improving and must continue doing so to match that of some of its peers evaluated in this Magic Quadrant.
  • Verizon has priced its Rapid Delivery services differently from its legacy services, leading to some confusion as existing customers have migrated to the new services.
  • Verizon's coverage of the Middle East and Africa is not as extensive as some of its competitors.


Vodafone continues to expand its network reach, adding numerous POPs in the last 12 months, especially in Latin America and North America, complementing its already considerable network coverage in Europe, Africa and Asia. Vodafone has introduced cloud connectivity to its MPLS network, but this service is more limited in terms of cloud providers supported and cities covered than those of leading providers. Enterprises with significant coverage needs in Europe, the Middle East, Africa and the Asia/Pacific region should consider Vodafone.

  • Vodafone has a global MPLS backbone now covering 65 countries, and extensive national networks in 23 markets, including the U.K., Germany, Italy, Spain, South Africa and India.
  • The vendor has recently launched hybrid WANs, based on Cisco's IWAN, with secure local Internet breakout.
  • Vodafone leverages its mobile capabilities to offer 3G/4G MPLS access, either as backup access or temporary access, in 13 European countries.
  • Vodafone's coverage of South America is light, compared with leading providers in this Magic Quadrant, and its coverage of the U.S. is lighter than that of U.S.-based providers.
  • The vendor does not currently have a global SIP trunk service, instead reselling services from other providers.
  • Vodafone does not currently have SD-WAN, vCPE, SDN or NFV capabilities, although it does have roadmaps for some of these services.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant 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.


No vendors were added to this Magic Quadrant.


No vendors were dropped from this Magic Quadrant.

Inclusion and Exclusion Criteria

To qualify for inclusion, vendors 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 20 countries, covering, at a minimum, Europe, North America and the Asia/Pacific region, and not just sell networking services in one region for delivery in the other regions.
  • They must generate at least $250 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.

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

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria


Product or Service


Overall Viability


Sales Execution/Pricing


Market Responsiveness/Record


Marketing Execution


Customer Experience




Source: Gartner (January 2016)

Completeness of Vision

In this market, 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 vCPE.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria


Market Understanding


Marketing Strategy


Sales Strategy


Offering (Product) Strategy


Business Model


Vertical/Industry Strategy




Geographic Strategy


Source: Gartner (January 2016)

Quadrant Descriptions


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.


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 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 may 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. Unified communications, including video, machine-to-machine communications and big data/analytics continue to drive up enterprise bandwidth needs by an average of 30% per year. With digital initiatives making businesses ever more dependent on IT (and, therefore, their networks), reliability and performance control are growing in importance.

This demand is not only being met 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

The number of global network service providers included in this research remained constant; however, many regional providers are expanding their coverage beyond their core regions and, while they currently do not meet our inclusion criteria, may be suitable as a global provider for some organizations. Such providers will typically feature in Gartner's research on the markets for regional providers, including Critical Capabilities for U.S. Wireline, Pan-European and Asia/Pacific Network Services, and the Market Guides for Pan-African and Pan-Latin American services.

The global networking market continues to increase in complexity, with most contracts involving multiple services. This was highlighted by the responses to our vendor reference survey for this Magic Quadrant, where all the references had MPLS services, approximately half had Internet VPNs, half had Ethernet services, two-thirds had managed routers, half had managed WAN optimization, half had SIP trunks, and a quarter had managed LAN or wireless LAN.

New global network proposals are predominantly for hybrid IP WANs, combining Internet with MPLS, deployed in active/active configurations, with different applications using the most appropriate link type, and increasingly with direct Internet access from every site. Some providers are launching enhanced Internet service capabilities in conjunction with partners like Akamai, or enhancing their own Internet services so as to improve the performance of the Internet portion of their hybrid WAN offers. Ethernet services (virtual private line and virtual private LAN service) are principally used for data center interconnection. Different combinations of each of these services can be used to obtain different service levels appropriate to each enterprise location.

WAN access is evolving, with traditional leased line access, such as T1 or E1 lines, no longer proposed in new deals, except in certain emerging markets. They have been replaced by optical Ethernet access at 10 Mbps, 100 Mbps, 1 Gbps or even 10 Gbps. 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. Some providers are delivering bandwidth on demand services, enabling self-service changes by the enterprise itself via a portal, often using SDN technologies. For smaller, less critical locations, broadband (increasingly, "superfast broadband" such as VDSL, cable modem or passive optical network [PON]) is the access technology of choice. Finally, cellular connectivity is increasingly being used for backup, rapid deployment or temporary locations.

The vast majority of global WANs are delivered on a managed service basis, with the on-site devices, such as routers, security appliances and WAN optimizers, provided and managed by the service provider. Providers are now exploring alternative ways to deliver this functionality, including offering managed SD-WAN products. Alternatively, they may deliver managed network services as virtualized appliances on x86 standard servers, either on-site, which is termed "vCPE," or in their points of presence, which is termed "NFV." NFV can either be delivered on top of existing networks such as MPLS or as a feature of a software-defined network. These offerings promise to greatly improve the agility of enterprise networks, with the potential for the rapid deployment of new sites as well as on-demand capacity upgrades and the addition of incremental services. Although Gartner expects rapid uptake of these services over the next two to three years, they are at the early stages of their deployment and no two providers have the same roadmap, let alone rollout timetable.

Enterprises' adoption of cloud IT service delivery is driving 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 and Ethernet networks to major cloud service providers and enabling local Internet breakout from all sites, 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 developments are a major area of competitive differentiation between providers, with differing coverage pricing and service options.

An increasing number of global WANs incorporate managed application visibility and/or WAN optimization, with some providers now offering application-level visibility by default. New deployment options, such as network-based and branch-based virtual machine-based options, enable lower cost and greater flexibility in deployment, as well as the ability to optimize cloud services.

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, while in many mature markets ISDN has become a legacy technology. Global SIP services need to accommodate the complex national regulations relating to fixed voice services, and this can inhibit SIP adoption, especially cross-border consolidation and services in emerging markets. Coverage, including the availability of inbound and outbound calls, special rate numbers, resilience features, pricing, and various call routing options, are key differentiators.

Downward pressure on global network service prices is relentless (e.g., global MPLS services see unit price declines averaging 10% per year, although with strong regional variance). 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. However, maintaining a consistent set of service features and user experiences across all of these different approaches is challenging.

Other measures that providers are adopting to reduce their costs include automation and back-office 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 in danger of becoming obsolete in this fast-moving market.

Enterprises are looking to extend their adoption of managed services into additional areas beyond the WAN. Bundling of 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. This is especially true when the WAN and LAN are used to support IP telephony or unified communications. Standardized utility LAN 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.

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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.