Network Service Providers

19
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].

Transcript of Network Service Providers

Page 1: Network Service Providers

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].

Page 2: Network Service Providers

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 ???

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Where Have All the NSPs Gone?

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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?

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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

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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

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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

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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?

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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

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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

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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

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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?

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•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.

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