benchmark-it performance

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benchmark-it

performance

This comprehensive 742 page report profiles, compares and assesses 35 key providers of international business networking and related services.

The report includes the following:

 Profiles of 35 IB2B service providers:  Verdict on strategy and performance  Geographical coverage and reach

 Product/service portfolio details and availability

 Target customer types (segments/verticals) and market positioning  Revenue, organizational and management information

Who should buy the report?

 Providers of international networking and related B2B services  Suppliers and advisors to the IB2B market

 Customers of the IB2B market Key benefits:

 Source of key information on 35 service providers  Independent market analysis and comparisons

 Enables customers to focus on implications and formulate action plans Key conclusions:

 The last year has seen a marked change towards a cloud-based delivery model and ever more ubiquitous availability and integration of data, applications and communications

 The cloud model is acting as a driver for the unification and convergence of communications

 The new products and services fit changing work patterns and priorities  Relationships between service providers and customers are becoming

more strategic in nature as the role of the CIO evolves

 With the USA and the EU struggling under political gridlock after the ‘great recession’, global economic growth is being driven by other countries and regions

 Service providers continue to turn their attention to Asia Pacific, Latin America and, increasingly, the Middle East and Africa

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benchmark-it

performance

International

Business-to-Business Services

February 2013

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Executive Summary

The IB2B market for communications and related services is a key driver of the global economy. It has changed the way that many people work, accelerated economic development and improved the efficiency of businesses, commerce and markets around the world.

At the same time, the IB2B market is itself evolving rapidly, with a marked change over the course of the past year towards a cloud-based delivery model and ever more ubiquitous availability of data, applications and communications. Although adoption of cloud-based services remains relatively immature, the fact that all the key players see it as the future (and its attractions are compelling for service providers and customers alike) means that it is set to change the market fundamentally.

The cloud model is enabling new ways of conducting communications, as well as acting as a driver for the unification and convergence of communications, backed by improved customer visibility, control and management, and made feasible by ever stronger security solutions.

This technology shift also reflects changes in the way people work and where they work, with the emphasis increasingly on flexibility and interconnectedness, rather than a strict eight to six in the office. More often than not, meetings today are virtual, rather than being conducted in person.

These changes mean that the relationship between customers and IB2B service providers is also becoming more strategic and less transactional. Enterprises need business solutions and enablers, not pieces of technology that they have to piece together themselves. This makes for potentially longer-term and more exclusive commercial relationships, which is why the largest IB2B players continue to dominate the top echelons of the market as they have the people, finances, services, global reach, relationships and experience that result in significant barriers to entry into their club.

Challengers do have certain advantages, however, that they can exploit. By their nature they are likely to be more flexible and customer-responsive, they are able to focus on a particular customer segment or geographic niche, or a key part of the value chain. They can also, sometimes to their long-term detriment, also compete on price. In the meantime, the converence of ICT markets means that the boundaries between IT and communications continue to blur, threatening supply-side disruption and consolidation somewhere down the line.

This is all taking place against a mixed economic backdrop. The two largest markets (the USA and the EU) are in political gridlock, undermining the potential for renewed economic growth. However, other economies are tending to grow, attracting both service providers and their customers. This has been reflected in the past year by a change of focus for geographic expansion which, when combined with the enabling capabilities of new technology, is continued good news for IB2B customers.

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SAMPLE PAGE Name: T-Systems

Customer Focus: MNCs, Wholesale

Positioning: Combined telecoms and systems integration provision

Presence

North America Latin America Europe MEA Asia Pacific Key cities 3 cities Key cities Some Key cities

Portfolio

Fixed Networking Mobile/Mobility IT/Cloud Services

Yes Yes Yes

Verdict: T-Systems always seems to be almost there in terms of market progress. With a strong base of systems integration and IT services, the move towards cloud-based and virtualized services should play to T-Systems’ competencies, but then at the same time it lacks in terms of global reach apart from a few ‘super-accounts’ that get special treatment. It is also unfortunate that T-Systems’ strongest market is Europe, which is not showing any encouraging economic signs currently. None of these issues is a major threat to T-Systems, but it may have to look to expand the global reach of its services to drive growth. Another opportunity would seem to be a more effective leveraging of parent Deutsche Telekom’s international mobile assets. It looks like another year of ‘almost there’ lies ahead again at a time when a number of competitors are making tangible progress and eroding T-Systems’ IT/SI advantage.

Name: Verizon Enterprise Solutions

Customer Focus: MNCs, Wholesale

Positioning: Global leader in communications and IT solutions

Presence

North America Latin America Europe MEA Asia Pacific Strong Some Strong Some Key cities

Portfolio

Fixed Networking Mobile/Mobility IT/Cloud Services

Yes Yes Yes

Verdict: Verizon Enterprise Solutions has evolved its positioning from a focus on networks and reach towards one of offering solutions designed to add value to customers in their operations, activities and markets. The move up the value chain means that the customer proposition has developed from how applications are carried towards the applications themselves and, increasingly, how those applications are being used by end employees. The proposition is growing to embrace the cloud and mobility to enable customers’ employees to perform their tasks efficiently, effectively and securely wherever they are, over whichever device they happen to prefer at that instance. All the major players have this same goal, but Verizon is certainly one of the leaders in terms of having both a global perspective matched by a customer-centricity.

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BT Global Services

Verdict: BT Global Services continues to see its revenues shrink and is matching this shrinkage with headcount and cost reductions. Facing pressures from the economic stagnation in its home European market, BT is another player looking for growth from the Asia Pacific, Latin America and the Middle East and Africa markets. On the positive side, BT Global Services retains a good reputation amongst its target customers and has the clearest articulation of its portfolio among its peers, although its mobility portfolio continues to suffer from its lack of assets in this area.

Summary

BT Global Services provides IT and networking services to meet the needs of multi-site organisations globally and in the UK.

“In 2012, BT Global Services consolidated its position as a global leader in managed networked IT services. We have focused on improving our performance and serving our customers better. We continued to sign contracts with large corporate and public sector customers, and to make investments to extend our global capabilities and have further reduced our cost base.”

“BT Global Services is a global leader in managed networked IT services, serving the needs of customers in more than 170 countries worldwide. We provide service to around 7,000 large corporate and public sector customers.

Our corporate customers operate in a wide range of sectors, including banking and financial services, manufacturing, logistics, pharmaceuticals and consumer packaged goods. We serve customers in the public sector in the UK, including central government and local councils, as well as public sector organizations outside the UK. Globally, we provide transit and other wholesale services to global carriers.

We have operations around the world so that we can serve the domestic and international needs of our customers. We operate domestic businesses in key markets in Continental Europe such as Italy, Germany, Benelux, France and Spain, and have local network infrastructure including high-speed fibre networks in 24 major European cities. We operate in 45 countries across the Middle East and Africa. In Latin America, we operate in 22 countries. In the USA and Canada, we serve customers from offices in 35 key cities.

We serve 18 countries in the Asia Pacific region, including India, China, Malaysia, Singapore, South Korea, Japan and Australia. We are investing in high-growth regions such as Asia Pacific, Latin America and the Middle East and Africa, recruiting more people and improving our portfolio and our network infrastructure.”

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SAMPLE PAGE

Geographic Reach:

Orange Business Services has what it claims to be the world’s largest data network in terms of geographic coverage, with a local presence in 166 countries and territories, 967 cities and towns, with 1,468 PoPs worldwide.

Orange Business Services’ core routers are connected using OC-48 wavelengths or packet over SONET. The resiliency of the core network is built using MPLS Traffic Engineering Fast Reroute giving sub-50ms restoration of traffic in a failure event. In November 2011, Orange Business Services announced it was to accelerate its growth strategy in the Asia Pacific region with a focus on network enhancements, cloud computing, strategic partnerships and network-related IT services, having invested €750 million in the region during 2011.

During 2012, Orange Business Services completed the implementation of a 100Gbps ring network between Japan, Hong Kong and Singapore.

In August 2011, Orange Business Services announced it was going to increase the capacity of its Latin American network by ten times, driven by growing customer demand.

In April 2012, Orange Business Services established Orange Business Arabia with the opening of an office in Riyadh, Saudi Arabia, as part of its strategy to grow its presence and revenue base in the Middle East and Africa.

France Telecom as a group has over 30 data centres globally. North America:

Orange Business Services has sales and support teams in more than 30 metro areas across North America, including Atlanta, Washington DC, New York, Chicago, Montreal and San Francisco. It also has over 500 in-country customer service and operations staff out of a total of 1,450 people in the region.

Latin America:

Orange Business Services has over 400 customers with more than 17,000 customer connections in the Latin American region, supported by more than 600 staff, most of whom are in customer-facing roles in sales offices in Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. In Brazil, Orange has 500 staff in its Major Service Center in Rio de Janeiro (one of four worldwide). Orange has 122 PoPs across 31 countries in Latin America. In Argentina, Orange Business Services has over 200 customers with 1,900 connections and 50 employees.

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Geographic Reach:

Cogent’s network links over 180 markets throughout 34 countries in North America, Europe and Asia, with over 56,600 route miles of long-haul fibre and more than 26,300 miles of metropolitan fibre serving over 400 metropolitan rings.

The end-to-end optical transport network consists of IP-over-WDM fibre running up to 680Gbps inter-city capacity and 320Gbps on metropolitan rings. On the IP layer, Cogent’s Tier 1, IPv6- and MPLS-enabled network has direct IP connectivity to more than 4,100 AS (Autonomous System) networks around the world, with over 23,800Gbps internetworking capacity.

Over 95% of Cogent’s traffic goes across private peering connections. Cogent also participates in several public peering exchanges, including PAIX (Los Angeles and New York) and NOTA (Miami), AMS-IX (Amsterdam), DE-CIX (Frankfurt), LINX (London) and others across Europe.

The chart below illustrates the Cogent network:

As well as linking to carrier-neutral data centres and corporate office buildings, Cogent has a total of 43 data centres with over 420,000 square feet of space in North America and Europe, located in:

 France: o Antibes; o Bordeaux; o Dijon; o Grenoble; o La Garenne Colombes; o Lille; o Lyon; o Montpelier; o Nantes; o Nice; o Poitiers; o Rennes; o Rouen;

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SAMPLE PAGE

Portfolio:

Solutions:

Networks:  MPLUS:

o MPLUS is an MPLS-based IP VPN service that enables customers to link global sites for voice, data and multimedia traffic;

o Traffic can be prioritised using 5 CoS (Classes of Service);

o The Easynet MPLS network dynamically routes traffic across diverse paths to provide resilient traffic flows;

o Customers get access to on-line monitoring and reporting tools; o 24x7 technical customer support;

o SLAs covering:

 Availability;

 Time to fix;

 Packet loss;

 Round trip delay;

 Jitter;  Hybrid MPLS:

o Enables secure access to MPLS-connected sites around the world using 3G or fixed-line Internet connections;

o Security provided using IPSec tunnels over the public Internet; o Traffic is encrypted using AES algorithms;

o Easynet provides a managed router and a secure connection back to the corporate network;

o Customers can use 3G or fixed-line DSL Internet service as a back-up to primary connections to increase resilience:

 Hybrid MPLS-3G – users can connect using their 3G SIM card across a range of mobile service providers;

 Hybrid MPLS-DSL – customers use their own DSL lines (with static IP address) to access the network using IPSec;

o Available in more than 120 countries, including:

 Americas:  Argentina;  Bermuda;  Bolivia;  Brazil;  Canada;  Chile;  Colombia;  Costa Rica;  Dominican Republic;  Ecuador;  Guatemala;

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SAMPLE PAGE

Mobility Services:

 Machine-to-Machine (M2M):

o Network connectivity using GSM for wireless delivery and roaming to over 190 countries;

o M2M Application Platform (based on Axeda technology):

 Positioned as speeding the delivery time and lowering the cost of M2M application development and maintenance using a cloud-based data integration and application development environment;

 M2M development framework includes:

 Adaptable set of reference applications to meet specific needs, including applications for remote access, remote service and software/content distribution;

 Rich programming interface that includes Groovy, ‘an easy-to-customize Java-based scripting language;’  Robust set of built-in Web services for enhanced

authentication, authorization and data transport security;  Data management tools, including a flexible rules

engine and an extensive data model;

 Connected device framework:

 Standard data translation protocols for two-way communication with a variety of endpoints;

 Server and client agents to translate and transmit data over a secure network with the platform;

 Pre-built connectors and APIs for integration and communication with enterprise systems such as CRM, ERP, billing and data warehouses;

 AT&T offers a range of support services throughout the M2M application development, deployment and management lifecycle;

 Training and technical support is available for developers and application managers with AT&T M2M Application Platform;

 Components include:

 M2M Application Services: o Scripting API; o Web Services API; o Integration Framework;  M2M Data Management:

o M2m Rules Engine; o M2M Data Model;

o M2M Server and Data Services;  M2M Connectivity:

o Wireless Agent Toolkits; o Device Protocol Adapter; o Firewall-Friendly Agents;

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SAMPLE PAGE

Management

Revenue:

Level 3 generated revenues of $4.333 billion in 2011 (2010: $3.591 billion). Adjusted EBITDA in 2011 was $958 million (2010: $849 million).

Core Network Services (CNS) revenues by customer group have been as follows in recent years:

$ millions 2011 2010 2009

Wholesale 1,433 1,375 1,409

Large Enterprise & Federal 605 566 507

Mid-Market 640 595 632

European 324 291 292

Level 3 CNS 3,002 2,827 2,840

Global Crossing Invest & Grow 590 - -

Total 3,592 2,827 2,840

Non-CNS revenues consist of wholesale voice services (2011: $672 million) and other communications services (e.g. managed modem services, 2011: $69 million).

Level 3 estimates that about 30% of Core Network Services (CNS) revenues are generated outside the USA, with 64% of revenues coming from the enterprise customer segment (Q3 2012). Revenues by product type are as follows:

 Co-location and data centre: 10%;  Transport and fibre: 35%;

 IP and data: 36%;

 Voice services: 19%.

As a “logical consolidator” Level 3 lists the following as the criteria consolidation opportunities must meet:

 Traffic can efficiently be shifted over to Level 3’s network;  Expenses of the target can be significantly reduced;

 Target cash on cash payback of three years. Management:

Level 3’s CEO is James Crowe. The company’s CMO is Anthony Christie. Level 3 employed about 10,900 people globally as at 31st December 2011, an increase of about 5,000 from 31st December 2010.

Level 3 operates through three geographically organized business units in EMEA, Latin America and North America.

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Management

Revenue:

The table below illustrates BT Global Services revenues and EBITDA for the last three financial years (ending 31st March):

£m 2012 2011 2010

Revenues 7,809 8,059 8,522

EBITDA 627 593 457

BT notes that, excluding revenue from transit services, revenues fell by 1% year on year. The chart below illustrates revenues by sector at BT Global Services for its most recent financial year:

BT Global Services accounted for 40% the BT Group’s external revenues and EBITDA in its financial year ended 31st March 2012.

Revenues by product/service over recent years have been as follows:

£ millions 2011 2010 2009

ICT and managed networks 5,310 5,281 5,273

Calls and lines 822 956 1,055

Transit 623 782 869

Broadband and convergence 318 334 321

Other global carrier 206 229 237

Other products & services 768 931 873

benchmark-it performance

benchmark-it

performance

benchmark-it

performance

International

Business-to-Business Services

February 2013

TABLE OF CONTENTS

Executive Summary

BT Global Services