Here's Who Made Gartner's 2016 Global Network Services Magic Quadrant

A Market In Flux

Global enterprise networks are swept up in a revolution, propelled by the availability of SDN and the cloud as a method of delivery for IT services. As a result, there's plenty of room for a shakeup to Gartner's Magic Quadrant as we know it.

That's because there's differentiation among service providers, according to Neil Rickard, research analyst for Stamford, Conn.-based Gartner Research, in an interview with CRN about this year's Magic Quadrant report.

The annual Global Network Services Magic Quadrant includes service providers that offer dedicated Internet services, WAN offerings and SIP products. Today, differentiating capabilities include managed hybrid WANs, cloud connectivity services and SIP trunks replacing the public switched telephone network (PSTN), Rickard said. Emerging "ingredients" that some providers are offering today also include software-defined networking (SDN)/software-defined WAN (SD-WAN), network function virtualization (NFV), and virtual customer premises equipment (vCPE).

Here's who landed in the Leader, Challenger, Niche and Visionary quadrants on 2016's Global Network Services Magic Quadrant report.

Anyone's Game?

According to Rickard, no providers were added or dropped from this year's report. But that won't likely be the case in the future. As networking evolves, the door is opening for unlikely providers to throw their hats in the ring, he said.

"We are on the cusp of change within the global networking market because we are changing how we build WANs. We are moving to a much more virtualized and software-defined set of network services. That's going to shake things up a lot."

Traditionally, included companies were network service providers with global ambitions. Now, Rickard is seeing a gambit of different players waiting in the wings, including large systems integrators and managed services providers who are not necessarily network operators.

"It's not just players that are getting into the global market getting onto the report, it's potentially companies from totally different fields -- like maybe systems integrators offering managed services that qualify for inclusion," Rickard said.

Methodology and report criteria

The Magic Quadrant report for Global Network Services includes service providers that offer data, including enterprise WAN and MPLS, as well as voice and managed network services to enterprise customers.

Included providers need a minimum of 10 POPs in the Asia/Pacific, North America and Europe markets. Inclusion criteria further insists that providers in the Quadrant must not simply resell network services from another global provider. Further, service providers must have sales offices and actively sell enterprise networking services in a minimum of 20 countries and at least cover Europe, North America and the Asia/Pacific region. Lastly, providers must generate at least $250 million in direct global enterprise network service revenue annually, not including domestic business and wholesale, according to Gartner.

Gartner places vendors into four categories: Niche Players lack the capabilities to address the needs of the broader range of enterprises or the vision to significantly alter their position in the market; Visionaries have market-leading plans for the future, but their current capabilities are not class-leading; Challengers are strong in execution, but narrower than Leaders in their vision for taking market leadership; and 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.

Leader: AT&T

Strengths: Telecom giant AT&T's extensive global networking business has landed the company once again in the leadership quadrant, Rickard said. Its placement is helped by its cloud connectivity offering, NetBond, which supports more cloud providers than any comparable offering. The carrier is also slated to globally roll out its Network Functions on Demand offering, which will enable AT&T customers to consume services as they go.

AT&T has a slightly more aggressive road map for delivering on virtualized and software-defined technologies when compared with competing companies on the quadrant, and is pushing hard for its long-term vision and evolution, Rickard said.

Weaknesses: AT&T has to work on rolling out its services more quickly in emerging markets, especially SIP trunking and cellular WAN access. The report also noted that price is a frequent issue cited by Gartner clients when considering AT&T, especially for sites in emerging markets where the provider has lighter network coverage.

Leader: BT Global Services

Strengths: BT Global Services has a strong presence in Europe and Latin America, and the provider is actively growing its global network. The provider's Cloud Connect offering provides WAN optimization on cloud services, as well as connectivity to a swath of cloud providers in multiple regions. The vendor is also touting a strong hybrid WAN offering, and is a great fit for enterprises with global networking requirements, Rickard said.

Weaknesses: Gartner cautioned that BT has yet to offer any SD-WAN, SDN or NFV WAN capabilities, but did cite that the provider plans to begin supporting Cisco's Intelligent WAN (IWAN) this year. Additionally, while the provider said it is actively taking steps to improve its customer service, Gartner clients cited dissatisfaction with the quality of BT's service delivery and support.

Leader: NTT Communications

Strengths: NTT Communications is well-known as one of the leading regional providers in the Asia/Pacific region, but NTT's reach continues to spread as the provider expands its massive network. For those looking for global WAN needs, look no further, Rickard said.

The provider's customer base and customer satisfaction continue to grow. NTT Data and Dimension Data, separate companies within the NTT Group, frequently introduce NTT Communications into new accounts. Via its acquisition of Virtela, NTT picked up a suite of NFV services, including WAN optimization and security services. The provider plans to enhance this portfolio by adding SDN and vCPE services, the report said.

Weaknesses: Despite its reach, NTT Communications' global brand recognition is low, the report said. Additionally, the provider's network still has limited coverage in specific regions, including Latin America. NTT also has to expand its Multi-Cloud Connect Service outside of Japan.

Leader: Orange Business Services

Strengths: Orange Business Services held onto its reputation as one of the strongest global network service providers this year. Unlike some of its competition, the provider has a unique strength in emerging markets. The provider also has a mature approach to network sourcing and contracting, Gartner said. Additionally, Orange's strong Business VPN Galerie offering connects leading cloud providers to its MPLS services in multiple regions.

Weaknesses: Orange has been consolidating its network and reduced the number of points of presence (POPs) in the smaller markets. While this move is not expected to impact service quality, it will force the provider to rely more heavily on NNI partnerships, which could impact manageability, quality and ability to roll out new services.

Leader: Tata Communications

Strengths: Another leader in the market, Tata Communications expanded its broad range of services over the past year. Its recently refreshed MPLS and Ethernet networks are especially strong in India, the Asia/Pacific region, the Middle East and Africa. The provider's Izo Internet WAN has also been enhanced, and can be incorporated into Tata's hybrid WAN offering. Tata also has a strong SIP trunking offering in certain geographies.

Weaknesses: Tata has weak coverage in Latin America and Eastern Europe when compared with other Magic Quadrant leaders. It relies on system integrator partners to deliver managed LAN and WLAN services globally. The provider also lacks a road map for SD-WAN, SDN and NFV functionality.

Leader: Verizon

Strengths: Telecom heavyweight Verizon's extensive global network and broad portfolio of managed network services solidified its leadership position. Verizon offers hybrid networking with managed SD-WAN and bandwidth on-demand capabilities similar to SDN, and the provider plans to add NFV-based security services to its portfolio this year. Verizon's Secure Cloud Interconnect offering provides MPLS and Ethernet connectivity to a wide range of cloud providers in multiple regions.

Weaknesses: Verizon has to work on improving its service delivery and support, an initiative the provider said it is already pursuing, Rickard said. Customers have also cited price confusion between its Rapid Delivery services and legacy services. Compared with fellow leaders, Verizon's coverage of the Middle East and Africa is not as extensive, the report said.

Challenger: Level 3

Strengths: Landing in the Challenger's quadrant, Level 3 is expanding its coverage of U.S. markets, thanks to its recent acquisition of U.S. domestic network service provider TW telecom, Rickard said. The deal will also set the stage for Level 3 to expand its SDN offering, Adaptive Network Control Solutions, the report said. Currently, Level 3 offers Ethernet, Internet access MPLS services, and SIP trunks over a single access line via converged Ethernet access.

Weaknesses: Reach is the largest roadblock standing in Level 3's path to the leadership quadrant. The provider will need to improve its network coverage in the Asia/Pacific region and Africa. Level 3's main SIP trunk offering, Voice Complete, is available only in the U.S. The provider does plan on expanding the reach of Voice Complete, and also cited plans for vCPE and NFV deployments in 2016.

Challenger: T-Systems

Strengths: Joining Level 3 in the Challenger quadrant is T-Systems. The provider is heavily focused on the Central European markets, where it has a strong MPLS network. The provider has a strong portfolio of managed LAN and WLAN services, and offers a standardized hybrid IP WAN product that includes 3G and 4G cellular access. T-Systems recently enhanced its hybrid IP-WAN offering with cloud-based VPN capability from Akamai, as well as support for Cisco's IWAN product.

Weaknesses: T-Systems has not expanded its global network presence outside of Europe. The provider depends on NNI partnerships to cover emerging markets. T-Systems also has no immediate plans to develop its own SDN, NFV, vCPE or SIP trunk services outside of Central Europe. Instead, SIP trunking requirements are handled by reselling SIP services from other providers.

The report disclosed that T-Systems didn't respond to requests for information from Gartner Research.

Niche Player: Sprint

Strengths: Telecom provider Sprint secured itself the title of niche player based on its focus on multinational customers with U.S. headquarters and other multinational customers in major economies buying a combination of MPLS and SIP services -- a big feather in the provider's cap, Rickard said. Sprint provides WLAN capability on a per-seat model as part of its Workplace-as-a-Service combined IT and communications offering for businesses. The provider also has a strong global SIP trunk offering, which is often sold alongside its MPLS network services. Gartner clients also consider Sprint to be a very easy vendor to work with.

Weaknesses: While Sprint has had a very strong history of serving companies with U.S. headquarters, its global network and sales coverage is limited, Rickard said. The provider doesn't have a plan for global SDN, NFV or vCPE offerings, but claims it will roll out an SD-WAN solution this year. Still, Sprint doesn't have managed hybrid WAN capabilities, and its cloud connectivity options for its MPLS network are limited.

Niche Player: Telefonica

Strengths: Niche player Telefonica has its roots dug deep within European countries, including Spain, the U.K. and Germany, and across multiple countries in Latin America. The provider owns multiple national fixed and/or mobile operators in these areas. The provider also has the most extensive SIP trunk offering of any provider in the report this year, with PSTN replacement coverage in more than 60 countries globally. Telefonica also ranked high in customer service among Gartner's clients, the report said.

Weaknesses: Telefonica has weaker network coverage outside Western Europe and Latin America. The provider is also lacking global NFV or SDN services, but claims it plans to introduce a SD-WAN offer this year. Telefonica addresses the needs of its customers well, but may want to consider focusing on larger global opportunities, Rickard said.

Visionary: Telstra

Strengths: An incumbent in the Australian market, Telstra has a strong presence and submarine cable infrastructure in the Asia/Pacific region. However, the provider is working on expanding its global coverage, especially in the U.S. and Europe. Telstra last year completed its acquisition of Pacnet, another Asia/Pacific provider, which helped to strengthen its network in China. Telstra also picked up Pacnet's SDN and NFV platform, Pacnet Enabled Network (PEN), via the acquisition.

Weaknesses: Because of its limited reach, Telstra relies on NNI agreements to extend its coverage globally. The provider also has limited global SIP trunking and direct Internet connectivity when compared with leading providers, and currently doesn't support MPLS-/IP-based cloud service connectivity globally. Telstra does support Ethernet connectivity to Amazon Web Services (AWS), however.

Visionary: Vodafone

Strengths: Visionary Vodafone has added more POPs over the past year in an effort to expand its network in North and Latin America. The provider presence is the strongest in Europe, Africa, and Asia today. Vodafone touts an impressive global MPLS backbone covering 65 countries, and recently introduced hybrid WANs based on Cisco's IWAN product. The provider also uses its mobile capabilities to offer 3G/4G MPLS access, either as backup access or temporary access, in 13 European countries.

Weaknesses: Vodafone still has light coverage in South America, and its coverage in the U.S. is the lightest compared with U.S.-based providers. The provider is also lacking a global SIP trunk service, but resells services from other providers. Vodafone is also missing SD-WAN, vCPE, SDN or NFV capabilities, but claims it has plans on its road map for some of these services, the report said.