2017First Half

Telecom Vendor Equipment Selection

ACGRESEARCH MARKET

PULSE STUDYRay Mota CEO and Principal Analyst

www.acgcc.com rmota@acgcc.com @rmota

Table of Content

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Description

Overview and Methodology

Demographics

Key Findings

Top-of-Mind Brands

Vendor Recommendations

Top Criteria Influencing Purchases of TelecomEquipment - Unaided

Top Criteria Influencing Purchases of TelecomEquipment - Aided

Vendors' Performance

Top Vendors by Technology

Vendors Score by Purchase Criteria

Final Words – Buyer’s Advice

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Overview And Methodology

Overview Methodology

ACG Research is an analyst and consulting firm in the networking and telecom domain.

To understand what drives brand and purchase choice of telecom equipment and key vendors in this domain.

This research identifies the top purchase drivers and top brands in the telecom equipment market, as well as key di�erences in purchase drivers and brand value perception by technology type.

This study was conducted in 1Q17 and 2Q17 among companies across North America, Latin America, Europe, Asia Pacific and the Middle East.

A total of 35 interviews were conducted with buyers involved in and/or influencing purchase of various types of telecom equipment.

The study included a mix of close-ended and open-ended questions, which allowed respondents to provide both unaided views (of top purchase drivers and vendors' choices) as well as quantitative evaluations of a core set of vendors.

Key vendors assessed in this study included Cisco, Ericsson, Huawei, Juniper and Nokia. The typical respondent purchased equipment from 3 or more of these vendors. We did allow some fill answers. Palo Alto Network was high on security.

Demographics

The study was conducted in local languages and included a good mix of respondents from all geographic regions.

All roles involved in purchasing were targeted and the final sample included a good mix of purchase roles.

Most respondents had purchased from 3-4 of the vendors included in this study.

North America,29%

Latin America,14%

Asia Pacific,14%

Europe,29%

Middle East,14%

Respondents' Locations

Respondents' Purchase Roles Respondents' Vendor Experience(Previously purchased from these vendors)

Influencers9% Nokia

Cisco

Ericsson

Juniper

Huawei

Evaluators 43%

Decision48%

34

28

31

26

28

Purchase DriversKey

Ease of Integration/Open Architecture

Bundle/End-to-End Solution

Innovation

Pricing

Support Quality

Product Feature & Performance

Thought-Leadership

Financing

Vendor Reputation

Sales Team Quality

72%

58%

54%

49%

47%

41%

37%

35%

17%

25%

Key Findings

Purchase choices are all about Quality and Product Performance, regardless of final vendor choice

WHAT BUYERS ARE SAYINGVendors' Reputation

Purchase choices are all about quality and product performance, regardless of final vendor choice

Ericsson's customers are confused about Ericsson's direction and long-term vision but still see its integration business as value

Cisco is becoming more of a security company vs. a routing and switching company. Need a router refresh

PTX and MX are still viewed as high-end products and value but see a need to reset the security area for Juniper

Key Purchase Drivers (Q2)

Unaided views call out Cisco as the top brand. Ericsson “brand” is ratedlow because of concerns about sustainability

Top Rated Telecom Equipment Vendors (Q4)

Vendor Performance Ratings (Q5)

Top-of-Mind Brands

Vendors' Performance Ratings

Top-Rated Telecom Equipment Vendors

Nokia

Cisco

Ericsson

Huawei

59%

18%

12%

6%

5%

Cisco

Nokia

Juniper

Juniper

Huawei

Ericsson

54%

40%

29%

29%

26%

Top Recommended Vendors – NPS (Q13)

Net Promoter Scores WHY

Cisco

Nokia

Juniper

Huawei

Ericsson

79%

67%

55%

48%

26%

Operators are most likely to recommend Cisco and Nokia but Ericssonfor services, and Huawei for pricing

Vendor Recommendations

Cisco is the global service provider for cloud solutions and considered extraordinary in providing security & networking solutions. Robust and high-quality equipment with great service quality are the main reasons. Confident about its approach toward the satisfaction of its customers.

Ericsson is struggling. Diversifying and following the same strategy Nokia did a few years back.

The quality of the equipment and service from Nokia is always up to the mark. Sales service and support are the main factors for why customers trust Nokia solutions. Nokia has provided the highest quality services and best a�er-sales support team.

Juniper has been able to o�setweak Tier 1 spending with strongwebscaler solutions.

Cisco is really doing well in providing networking and security equipment. We prefer the company in small-scale integrations over other vendors.

Huawei's quality of technology products has improved and the company continues to gain in APAC & EMEA.

Top-of-mind (unaided) drivers come down to three: product features & performance,service & support and price.

Ease of Integration/Open Architecture

Product Features & Performance

Price

Innovation

Service & Support

32%

27%

21%

9%

7%

3%

1%

Top Purchase Criteria (Q1)

Timely Delivery

Reputation

Top Purchase Criteria - Unaided

Top Purchase Criteria - Unaided

Pricing is important but more important are: Quality, followed by Product Features& Performance and Innovation.

Service & Support

Product Features & Performance

Innovation

Ease of Integration/Open Architecture

Pricing

78%

56%

54%

48%

46%

39%

36%

33%

28%

24%

Bundle/End-to-End Solution

Vendors' Reputation

Financing

Thought Leadership

Sales Team Quality

Top Purchase Criteria - Unaided

Support quality, product feature & performance & innovation are the top criteria that influence telecom equipment purchase decisions.

Financing, thought leadership & quality of sales team are ranked much lower; however, these criteria do have some influence on purchase and can provide vendors with incremental di�erentiation.

Ease of integration and pricing are also strong considerations for purchase.

The “Top” Purchase Criteria

For most buyers, there is a preferred vendor that receives a 5 rating. Nokia and Cisco havethe most 5s but it’s a close race overall.

Vendor Performance

Cisco

Nokia

Huawei

Juniper

Ericsson

Top Vendors by Performance of Telecom Equipment (Q5)

54%

40%

29%

29%

26%

Product & service qualityInnovationProduct performanceEnd-to-end solution providerMarket reputation

Quality of equipmentE�icient in planning & implementationInnovationNetwork management expertisePricing

InnovationProduct & service qualityOptimistic capabilitiesPricing

Cisco

Nokia

Huawei

Juniper

High-end expertise in security solutionsRobust and high-quality equipmentInnovationProduct features and a�er-sales services areup to the mark

Peeling back the layers, we see that being a top brand doesn’t mean beingthe top choice across all types of telecom equipment!

Top Vendors by Technology

Technology

Broadband

Cloud

Data Center

Mobile

Cisco Product feature & performance and ease of integration

Ease of integration, innovation and support qualityNokia

TopVendors What makes them top?

Juniper

Cisco

Cisco

Juniper

Ericsson

Nokia

Ease of integration and innovation

Innovation and ease of integration

Ease of integration, support quality

Ease of integration and product feature and performance

Global integration integration and orchestration

Bundle/End-to-end solution and support quality

Peeling back the layers, we see that being a top brand doesn’t mean beingthe top choice across all types of telecom equipment!

Top Vendors by Technology

Technology

Optical

Router/Switches

SDN/NFV

Security

VoIP/IMS/UC

Wi-Fi

Huawei Inexpensive support quality and product featureand performance

Ease of integration and thought leadershipCisco

TopVendors What makes them top?

Cisco

Juniper

Nokia

Nokia

Ericsson

Cisco

Cisco

Cisco

HPE

Palo AltoNetworks

Support quality and product feature, large loyalcustomer baseEase of integration and reputation and openand flexible to webscaler

Reputation of foundation of Nuage Networks

Cloud manager and orchestrator

Reputation and product features and performance

Product feature and performance

Vendor's reputation

Innovation and support quality

Support quality and product feature and performance

Ease of integration and innovation

@

Yes, quality is key but for incremental market share gains, vendors maydo better to focus on improving pricing.

Vendor Scores by Purchase Criteria

Pricing 3.62

3.51

3.84

3.87

4.00

4.51

4.21

3.62

3.12

4.42

3.82

4.11

4.23

4.41

4.09

4.36

4.36

3.71

4.27

4.18

3.32

4.17

4.79

4.69

3.91

4.92

4.75

4.42

4.67

4.56

4.85

4.87

3.87

3.77

3.87

4.36

4.73

3.12

3.9

3.80

3.72

3.80

4.50

4.52

4.87

4.57

4.30

4.12

4.00

3.25

Financing

Innovation

Support Quality

ThoughtLeadership

Ease of Integration/Open Architecture

Product Features& Performance

Sales Team Quality

Vendors' Reputation

Bundle/End-to-EndSolution

Should maintain and improve

Satisfactory but improvement needed

Need significant focus & improvement<3.5

3.5-4

>4

I think there is a need to focus more on innovation in implementation rather than implementing in traditional ways.

It is expected that so�ware dependency would increase in the future so the vendors need to concentrate more on developing the solutions that are more so�ware dependent rather than hardware oriented.

Network and data security is of utmost important, so the vendors try and make their equipment more secure and reliable and make some necessary changes at the planning and designing phase only.

Vendors should work on open architecture; however, there are constraints related to investments for the new network roll-outs & equipment so ROI is very important.

Vendors should o�er competitive pricing and solutions which are future proof for at least couple of years.

Support quality is very important because errors need to be reduced significantly, high up-times are required Network congestion needs to be eliminated.

Highest level of commitment is expected from service providers. Their SLAs should be very stringent to ensure that operators deliver desired level of services to customers.

Vendors should work more on improving the quality of the support services as it is a very important aspect for any customer/operator. Vendors should also provide enough flexibility at the architecture level of the equipment.

Vendor should come up with the bundled products which can meet the current needs and demands of the telecom market. Not that they do not o�er any at this point of time.

Also, vendor thought leadership is a very important factor because vendors should have a good project management o�ice with e�ective leadership to take projects forward.

It is expected that vendors make some changes to their pricing structure based on the complexity of the solution deployed and servicing regular customers.

Support quality plays a vital role in delivering smooth and uninterrupted services.

Want to become a preferred provider? Here are some key points of advice from buyers.

Final Words – Buyer’s Advice