Jay Pultz Network Service Providers: The Race to New Services These materials can be reproduced only with Gartner’s official approval. Such approvals may be requested via e-mail -- [email protected].
Jay Pultz
Network Service Providers: The Race to New Services
These materials can be reproduced only with Gartner’s official approval. Such approvals may be requested via e-mail -- [email protected].
A Chapter 11 Sampler (as of 12 August 2002)In Bankruptcy Protection
WorldCom Williams MFN XO PSINet Teleglobe GlobalStar ...
Emerged From Bankruptcy Protection
Global Crossing Covad Yipes McLeod Iridium Savvis IXC …
Ceased Operations
KPNQwest Excite@Home NorthPoint Sigma WinStar Enron ...
Will Your NSP Be Next ???
Copyright © 2002
Where Have All the NSPs Gone?
Key Issues
1. What key drivers will shape the direction of network services?
2. Through 2007, which NSPs will survive (and thrive)?
3. What will be the best practices in managing NSPs?
4. How will network services evolve through 2007?
Copyright © 2002
Extraenterprise Needs
Networked Resources
Interactive Consumers
Moving Outside the Enterprise
It’s a Connected World After All
The CEO Wants: • Virtualization• Globalization• E-business• Business continuity• Agility/flexibility• Low IT costs
The CIO Also Wants To:• Live within resource constraints• Meet application needs and growth• Minimize business-unit
service/cost complaints• Maintain control
Intraenterprise Needs
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Small Offices
HomeOffices
LargeOffices
Consumers
Business Partners
“RoadWarriors” Professional and Managed Services
Broadband and Wireless Access
Global Intraenterprise andExtraenterprise Networks
ConvergedNetworkedServices
AdvancedNetworkServices Networked
Data Centers
Networked Resource Services
Network Services: Much More Than Voice, Data and Bandwidth
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The Top 10 Enterprise Needs10. Value-added services
9. Converged network services
8. Managed network services
7. Broadband access
6. VPN/IP services
5. Video streaming
4. High-availability networking
3. Capacity
2. Low prices
1. Be there and deliver
What Do You Want From NSPs Now?
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Strategy
Products/services
Pricing
Access strategy
Support/serviceMarket presenceFinancial strengthU.S. coverage
Technology
Global coverage
Completeness of Vision
Ability to Execute
Evaluation Criteria
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Are IXC and ILEC Combinations the Future of U.S.-Based NSPs?
AT&T
WorldCom
Sprint
Qwest
Broadwing
SBC
Verizon
BellSouth
Ability to Execute Global
CoverageTechn-ology Access Price
Service/Support
Finan-cial
U.S.Coverage
Strat-egy
Prod-uct
MarketPosition
Completeness of Vision
Good Poor Copyright © 2002
AT&T
WorldCom
Equant
Infonet
C&W
Global Crossing
Ability to Execute Global
CoverageTechn-ology Access Price
Service/Support
Finan-cial
U.S.Coverage
Strat-egy
Prod-uct
MarketPosition
Completeness of Vision
Good Poor
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Global NSPs: Equant Still Leads
Global United States
VisionariesNiche Players
Challengers Leaders
Ability toExecute
As of February 2002
Verizon
SBC
BellSouth
Sprint
AT&T WorldCom
Qwest
BroadwingOthers
Completeness of Vision
US and Global NSPs: Worlds Apart
AT&T
Infonet
C&W
Equant
WorldCom
As of October 2001
VisionariesNiche Players
Challengers Leaders
Completeness of Vision
Others
Global Crossing
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Source: "1H02 U.S.-Based Network Service
Providers Magic Quadrant," 19 February 2002 Source: "Year-End Global NSP Magic Quadrant," 31 December 2001
NSPStrategy?
Ideal Timeline
Chap. 11announced
Plan B TigerteamNSP
Strategy
ImplementPlan B
(Re)negotiate
time
Typical Timeline
Chap. 11announced
Plan B
Tigerteam
ImplementPlan B
(Re)negotiate?
time
“ThrashingAbout”
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What If Your NSP Goes Chapter 11?
Single NSP Strategy
• Supercarrier coming
• Strategic partnership
• Lower costs
• Easier to manage
Multiple NSP Strategy
• NSP viability
• Service portfolio
• Geographic coverage
• Business continuity
• Competitive leverage Copyright © 2002
Forget That Single NSP Strategy
The Enterprise
The Primary NSP
An Independent
No One
Other
And the Network Integrator Is ...
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1. Lower minimum annual commitments
2. Protect against business downturns
3. Keep (mostly) to three-year contracts
4. Ensure pricing remains market-based
— but with caps
5. Tighten service-level agreements
6. Make “out” clauses more flexible
7. Enable technology migration
Ye Olde New Contract
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It’s a Buyer’s Market — For Now
Small/Branch Offices
Road Warriors
Home Offices
Large Sites
Broadband Access Networks
Cable
Wireless•Fixed •Mobile•Wi-Fi•Satellite
xDSL•SDSL•ADSL
Fiber•SONET•Ethernet
Backbone Network(s)
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Access: Think Portfolio
Managed or Do It Yourself ? Network or CPE-Based?
What About Layer 2?
Service Quality
“Best Efforts”
ATM +
Poor Man’s Frame Relay
Price
$$$
$
$$
Reach
Everywhere
Network
Enhanced IP (MPLS)
NSP VPN
InternetVPN
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IP? Yes — But Which One?
•Quality of service/policy/application-aware
•Directory •Security/control•Connectivity management•Remote access management•Mobile access management •Telephony •Unified messaging •Contact center/customer relationship management
•Collaboration/conferencing •Video
Professional and Managed Services
NetworkPortal
In Search of the Elusive Value-Added
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Professional and Managed Services
NetworkPortal
The Network Is the Computer
•Networked computing•Content distribution•Application provisioning•Application hosting•Data storage •Web hosting•Collocation
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Recommendations
1. Forget about that single NSP strategy — it won’t work.
2. Have a “Plan B” in your pocket.
3. Renegotiate NSP contracts now.
4. Put in place a broadband, managed IP network.
5. Start planning and trialing value-added services.
Copyright © 2002