Gartner's Magic Quadrant for managed and professional network service (MPNS) vendors worldwide is a guide for midsize and large companies to identify and evaluate vendors that deliver IT services in support of connectivity and communications infrastructure (for example, WAN edge devices and Internet Protocol [IP] telephony hardware and software). These vendors provide network IT services but do not necessarily own the infrastructure itself. Though all the vendors in this Magic Quadrant provide network IT services, their competencies and offerings vary. Base your selection on a detailed evaluation of your requirements and sourcing goals compared with a vendor's capability to execute against those expectations globally and in the specific countries or regions in which you require services.

The market for communications IT services is relatively mature. However, the market for adopting a broader managed services — or outsourcing — approach to network operations is far less mature. The maturity of services for multinational corporations (MNCs) is even less mature and fraught with complexity and lapses in the network-centric IT services supply chain. Traditionally, network managers have looked to regionally focused, project-based engagements with third-party providers. Even more typically, these regional managers would leverage staff augmentation services in the market to supplement lapses in scale or expertise.

However, companies are now tasked with managing more with less across all of IT. This is especially true in the network environment, which has historically been labeled as less strategic than data center or applications initiatives. In terms of delivering robust operations and management capabilities, many vendors' experience and execution capabilities vary based on the network environments to be managed, whether voice and data connectivity services (wireline and mobile) or voice and data network infrastructure (including wireless). Often, the vendor's business model — be it that of network service provider (NSP), outsourcer, manufacturer or integrator — also greatly influences its focus on providing managed and professional network services offerings.

An important aspect of network IT service delivery in this market space is the use of remote capabilities to proactively identify problems and provision changes in the network. These changes range from fault and thresholded event remediation to software updates, upgrades and patching. Most of the providers in this Magic Quadrant are investing heavily in automated fault detection and remediation and performance management tools, with varying degrees of success and effectiveness. These instrumented service delivery platforms are important, affecting the efficacy and cost-competitiveness of the vendors reviewed in this Magic Quadrant.

Although this Magic Quadrant provides a view of IT service providers and their abilities to deliver to global requirements, Gartner believes that a single provider for all services is not necessarily the right solution for all MNCs. In fact, Gartner increasingly sees companies creating successful, regionally focused approaches to network outsourcing and managed services. The key to success is strong program management. The most important self-examination a company can carry out is to determine whether it has the internal capabilities to perform program management across multiple geographic areas, managing multiple providers. If it does not have these capabilities, then it must consider hiring an aggregation partner for program management or use a single global provider.

There are, however, notable regional differences in purchasing behavior. For example, the buying behavior of U.S. MNCs tends to favor multisourcing, separating the basic connectivity service from the management of the service. In Europe or Asia/Pacific, MNCs currently tend toward bundling more IT services and infrastructure together.

In 2007 and through 1H08, the market has seen very large network outsourcing deals from large MNCs such as General Motors, Shell Oil and P&G. Gartner expects 2H08 and all of 2009 to be significant in terms of the number and size of network outsourcing deals from MNCs and smaller region-specific companies.

MPNSs are project-based or multiyear, annuity-based agreements for network IT services in support of connectivity services and/or communications infrastructure. Simply put, MPNSs are focused on the support, operation and management of a company's business network, inclusive of mobile service and wireless networks.

The network IT services considered in this Magic Quadrant include:

• Network management.
• Network maintenance.
• Network development and integration.
• Network and telecom expense management.
• Network consulting.

MPNS contracts include one or more of the above IT services for enterprise networks. However, the contracts always include IT management services as the core of the relationship. IT management services include operational services, application management and help desk management services. Although these vendors provide network IT services, they do not necessarily own the infrastructure itself.

Asset and resource transfers (of technology or employees) may be included in the agreements but are not a requirement. In fact, the retention of employees and assets by companies while using a third-party manager is a driving force in the market, as companies feel this gives them more control than traditional outsourcing contracts.

Some vendors, namely NSPs, bundle connectivity services with IT services and infrastructure in their offerings. Bundling was not a requirement for vendors to be included in this Magic Quadrant. Many of the vendors in this Magic Quadrant partner regularly in network outsourcing opportunities (for example, as carriers and outsourcers).

For this study, each participating vendor delivered a formal presentation to Gartner and was asked to provide a list of five to 10 worldwide customer references. Gartner then assessed each participant.

The compilation of the results from the presentations and reference checks contributed to the final placement of the vendors in the Magic Quadrant. Gartner also used its research and conversations with users in the market to ascertain capabilities and satisfaction beyond what was provided by the vendors' selected references. The positioning in this Magic Quadrant reflects each vendor's completeness of vision and ability to execute.

Management services transfer all or part of the day-to-day management responsibility for a customer's network environment (including LAN hardware and software, WAN — voice and data — and voice network hardware and software) and, in some cases, the ownership of the technology or personnel assets to an outside vendor. These services may include system operation or support, capacity planning, asset management, availability management, performance management, administration, security, remote monitoring, technical diagnostics/troubleshooting, configuration management, system repair management and generation of management reports. Network remote monitoring and management, and backup and recovery services also fall into this category when some degree of management is included in the service.

Network maintenance services include both hardware maintenance and support services, and network software maintenance and support services.

Hardware maintenance and support services are preventive and remedial services that physically repair or optimize hardware, including contract maintenance and per-incident repair. Hardware support also includes online and telephone technical troubleshooting and assistance for setup, and all fee-based hardware warranty upgrades.

Sales of all parts are also included, exclusive of parts bundled with maintenance contracts. This segment includes only external customer spending on these services.

Software maintenance and support services include long-term and pay-as-you-go (incident-based) support contracts. Software support contracts include remote troubleshooting and support provided via the telephone and online, installation assistance and basic usability assistance. In some cases, software support services may include new product installation services, installation of product updates, migrations for major releases of software and other types of proactive or reactive on-site services. Software products and technologies covered under this category include operating systems and infrastructure software. Software support services do not include the purchase of subscriptions that provide entitlement and rights to use future minor versions (point releases) or future major releases of software.

Network development and integration services support the implementation and rollout of new network infrastructure, including consolidation of established network infrastructure. Activities may include hardware or software procurement, configuration, tuning, staging, installation and interoperability testing.

The practice of telecom expense management (TEM) encompasses the business processes conducted by IT and finance departments to acquire the provision of and support corporate telecommunications assets. Put another way, TEM is the build out of services, or the acquisition of third-party services, to manage the supply chain for telecommunications. Gartner has identified the component services of TEM as: sourcing, ordering and provisioning, inventory management, invoice and contract management, use management, dispute management and business intelligence.

Network consulting services are advisory services that help clients assess different technology and methodology strategies and, in doing so, align their network strategies with their business or process strategies. These services support customers' IT initiatives by providing strategic, architectural, and operational and implementation planning related to their networks. Strategic planning includes advisory services that help clients assess their network requirements and formulate system-implementation plans. Architecture planning includes advisory services that combine strategic plans and knowledge of emerging technologies to create the logical design of the network environment and the supporting infrastructure to meet customer requirements. Operational assessment and benchmarking includes services that assess the operating efficiency and capacity of a client's network environment. Implementation planning includes services aimed at advising customers on the rollout and testing of new network deployments.

This Magic Quadrant relied heavily on the analysts' knowledge and familiarity with the enterprise communications market and on checking vendor customer references. To be considered for this Magic Quadrant, vendors had to fulfill the following delivery criteria, based on how they serve the global market:

• Must directly provide IT management services in support of customer WAN environments.
• Must develop and maintain their own remote management platform for the provisioning of a variety of remote IT services across WAN, LAN and premises-based voice infrastructure.
• Must provide, directly or through partners, IT services in support of LAN, premises-based and hosted voice infrastructure and WAN edge devices.
• Must serve clients globally.

Service providers also had to meet the following financial criteria:

• Must have annual network IT service revenue of $250 million or more.
• At least $50 million of their revenue must come from network management services (this includes on-site and remote management services, as well as staff augmentation used for operational purposes).

Gartner views the ability to create and maintain a centralized remote management platform as a key indicator of an organization's ability to provide superior and quality network management services at reduced costs to end users. As the MPNS market matures, participants may not be required to maintain their own platform, but given the strategic nature of these assets, Gartner made this a requirement for inclusion.

This Magic Quadrant does not consider the resale of network hardware, network connectivity or software; nor does it consider revenue or products related to managed security services. In addition, while all the vendors in this Magic Quadrant provide network IT services, they do not necessarily own the infrastructure itself. For more information on these sectors, see Gartner's relevant Magic Quadrants.

Not all qualifying vendors provide the same breadth and depth of network IT services, and some offer specialized services. However, the vendors represent the range of managed network services available today and are evaluated in this larger context.

This is a new Magic Quadrant.

This is a new Magic Quadrant.

Gartner evaluates vendors on the quality and efficacy of the processes, methods or procedures that enable them to be competitive, efficient and effective, and to have a positive impact on revenue, retention and reputation.

Each criterion is ranked high, standard or low in importance.

Gartner evaluates MPNS providers on their ability to articulate convincingly logical statements about current and future market direction, innovation, customer needs and competitive forces, and on how well they map to the Gartner position. Ultimately, we rate MPNS providers on their understanding of how market forces can be exploited to create an opportunity for companies.

Each criterion is ranked high, standard or low in importance.

Leaders affect competitors by: enabling technology and IT service offerings; their focus on the enterprise and targeted industry segments; and their capability to differentiate on value, price and service levels to be first to market with relevant products. Vendors in the Leaders' quadrant are performing well today, have a clear vision of market direction and are building competencies to sustain their leadership positions in the market. From our analysis, the following vendors are Leaders:

• AT&T.
• BT Global Services.
• CSC.
• EDS.
• IBM Global Technology Services.

Vendor and customer experience weigh heavily in the Leaders' quadrant. All these vendors have demonstrated that they have significant network management and outsourcing experience and understand the dynamics needed to deliver network-centric IT services successfully.

The Challengers are strong on execution, but lack the vision to take market leadership in terms of enabling technology or other important service offerings. These players often follow quickly, but they are less innovative than Leaders. An example would be that they increase capital expenditure to match that of competitors or bring service offerings to market after a competitor has already established a willing marketplace.

Vendors in the Challengers' quadrant execute well today, but have a narrower view of market direction. The vendors that emerged as Challengers are:

• Dimension Data.
• Orange Business Services.
• T-Systems.

These vendors demonstrated that they have a base of satisfied network management and outsourcing clients. Overall, these companies need to address their strategic vision and broaden their service offerings — in terms of both capabilities and delivery — to meet clients' needs.

Visionaries exhibit excellent planning but suboptimal execution. These players are often held back by financial restructuring or weak management and strategy. Visionaries may plan to expand IT services coverage or to roll out a specialized IT service for the enterprise but encounter delays because of a lack of executive sponsorship.

Vendors in this quadrant have a clear vision of market direction and are focused on preparing for future customer requirements, though there is room for improvement in service delivery and execution. We placed three companies in the Visionaries' quadrant:

• Avaya.
• Nortel.
• Verizon Business.

Companies in the Niche Players' quadrant focus on a particular segment of market requirements, as defined by characteristics such as size, industry focus or selective network technology management offerings. We positioned the following vendors in this quadrant:

• Getronics.
• HP.
• Unisys.

Vendors in the Niche Players' quadrant are viable options for organizations seeking MPNSs. In this Magic Quadrant, vendors identified as Niche Players may have limited experience in the general or commercial worldwide markets, or they may provide only specific service offerings focused on certain network platforms (for example, PBXs, mobile and wireless services, narrow industry markets or business segments).

• AT&T maintains superior brand equity and recognition in the market.
• Almost 10 years of investment in the Integrated Global Enterprise Management System makes AT&T the clear market leader in terms of R&D for remote operations services.
• Aggressive, competitive pricing makes AT&T a major player on most companies' "best and final offer" stage in RFPs.
• Customer satisfaction has improved for remote network operations services.
• AT&T is focused on Fortune 1000 businesses with large expenditure on telecommunications. It is strongest in North America and Western Europe.

• Price-competitiveness masks significant lapses in go-to-market approaches in the form of inflexible, inconsistent and uncoordinated sales and marketing efforts. This often frustrates AT&T customers.
• Some customers have pointed to lapses in some support activities in North and Latin America.
• Investment in better partnerships and/or direct service delivery capabilities is needed for Pan-Asia/Pacific, the Middle East, Africa, Central/Eastern Europe and Latin America.

• Avaya continues to show strong growth in its consulting and system integration business.
• A legacy of providing services to its product customers has created a strong portfolio of communications-centric IT services.
• Avaya maintains a modest capability to provide multivendor maintenance and support services across voice and data infrastructures. It is particularly strong in North America and has good capabilities in Western Europe and Asia/Pacific.
• The recent acquisition of Avaya by Silver Lake Partners (see Note 1) and TPG Capital is expected to enable Avaya to focus on shoring up its long-term strategy.

• IT services (support and professional) pricing remains high compared with that of industry competitors.
• Despite significant efforts by Avaya to re-establish service excellence, Gartner believes that Avaya needs to continue focusing on improving customer satisfaction to compete effectively.
• Investment in better partnerships and/or direct service delivery capabilities is needed for Central/Eastern Europe and Africa.

• BT Global Services maintains one of the most talented, network-centric consultancies in the market. The organization has more than 19,000 consultants worldwide.
• BT Global Services is aggressively positioning itself as a multivendor, multicarrier "manager of networks."
• Its customer satisfaction scores were average to good.
• BT Global Services maintains significant partnerships and direct service personnel worldwide.

• BT Global Services must focus on integrating management platforms (operations support systems) to create a global, standardized service offering.
• Its continued reliance on customized projects yields inconsistent customer satisfaction.
• Investment in better partnerships and/or direct service delivery capabilities is needed for Central/Eastern Europe and Africa.

• CSC invests in network outsourcing and managed service capabilities as a core competency.
• It leads the market in integrating TEM into the portfolio of technology and business process management.
• CSC maintains strong carrier and technology vendor partnerships.
• Its customer satisfaction scores were slightly above average.
• CSC is strongest in North America, Western Europe and Latin America.

• CSC must make investments in Asia/Pacific to increase its competitiveness.
• Recent examples of poor service delivery in some key accounts have damaged perception of it in the market.
• Investment in better partnerships and/or direct service delivery capabilities is needed for Central/Eastern Europe.

• Dimension Data has formed strong alliances with Cisco and Microsoft for enterprise communications.
• Dimension Data's portfolio of network IT services is strong.
• The company has proved it can successfully integrate acquisitions to expand capabilities.
• Dimension Data maintains a robust logistics capability that is unmatched for network-centric support. The company is very strong in Western Europe, Asia/Pacific, the Middle East, Africa and Latin America.

• Dimension Data maintains a managed services platform that is average in terms of capabilities. Investments in its managed services platform have slowed.
• It is focused on support services and must increase its leadership in high-level consulting and communications application development capabilities.
• There has been an increasing number of customer complaints related to its managed services business.
• Continued investment is needed in North America for ongoing support.

• EDS maintains superior brand equity and recognition in the market.
• It is characterized by strong industry marketing and delivery of business-specific communications solutions.
• EDS has made market-leading R&D investments in management platforms and networks to provide managed services.
• EDS maintains strong multicarrier network service delivery and management.
• The company's customer satisfaction scores were average.

• Past examples of poor service delivery in large accounts continue to damage perception of it in the market.
• Investment in better partnerships and/or direct service delivery capabilities is needed for Central/Eastern Europe.

• Getronics is strongest in its primary market of the Netherlands, the U.K. and Belgium, and in its secondary markets of North America and Asia/Pacific.
• It has a strong hardware logistics and support business.
• It focuses on the financial services, government and manufacturing markets.
• It is a recommended provider for large MNCs seeking network outsourcing as a component of desktop or data center outsourcing solutions.

• Continued divestments have significantly reduced Getronics' direct global capabilities.
• It has reduced its focus on network and related resources in the past three years.
• It needs to invest in better partnerships and/or direct service delivery capabilities in the Middle East and Africa.

• HP maintains superior brand equity and recognition in the market.
• It offers market-leading innovation in fixed-mobile convergence (FMC) solutions.
• HP has strong carrier and vendor partnerships.
• Its ProCurve business gives HP needed validation as a network expert to end-user organizations.
• HP is strong in North America and Western Europe.

• There is some inconsistence in service delivery because of the complexity and size of HP and its network partnerships.
• The corporate network is not a core focus for HP; deals must be very large to interest HP and, generally, the network is absorbed as part of a larger outsourcing engagement (for example, relating to the data center).
• It needs to invest in better partnerships and/or direct service delivery capabilities in Asia/Pacific and Central/Eastern Europe.

• IBM Global Technology Services (GTS) maintains superior brand equity and recognition in the market.
• IBM GTS provides market-leading innovation in communications and network middleware IT services solutions.
• It has strong carrier and vendor partnerships.
• Rollout of its TEM competency center occurred in 2007 and is growing significantly throughout 2008.
• Gartner observed average customer satisfaction with IBM GTS during reference checks and client inquiries.

• IBM GTS's prices are premium and its offerings are standard, compared with those of its peers. Although its pricing is out of reach for most companies, satisfaction levels are good.
• It does not generally bid on network-only outsourcing deals. These types of deal are not believed to be core to its market strategy; deals must be very large to interest it and, generally, the network is absorbed as part of a larger outsourcing engagement (for example, relating to the data center).
• The company's divestiture of most of the WAN management function to carriers negates the appeal of sourcing management to an independent (noncarrier) vendor, and makes IBM more reliant on third parties in the provision of end-to-end service-level agreements (SLAs).

• Nortel recently invested in managed services platforms.
• The company has good capabilities for multivendor support services, which include the Microsoft Innovative Communications Alliance.
• Nortel has 20 years' experience in providing managed services.
• Its customer satisfaction scores were average to good.
• Nortel is strongest in North and Latin America and Western Europe.

• Nortel lacks a consistent global services brand and strategy.
• Its flat IT services margins could contribute to erosion in service quality.
• Nortel must monitor scalability as it takes more IT services opportunities globally.
• It needs to invest in better partnerships and/or direct service delivery capabilities in the Middle East, Africa and Central/Eastern Europe.

• Orange Business Services has a strong brand equity and recognition in Western Europe.
• Its recent investments in executives, consultants and management systems have created a strong portfolio of communications-centric IT services.
• Comprehensive IT capabilities, including data center and application management, make the company a compelling network provider for end-to-end solutions, including the provision of application-specific SLAs.
• It is a recommended provider for European-based MNCs seeking connectivity-centric managed service solutions.
• The company has very good capabilities in Western/Central/Eastern Europe, Latin America and the Middle East.

• Orange Business Services has limited presence in North America.
• Customer feedback cites a continued need for improved processes and methodologies for remote operations, troubleshooting and logistics dispatch.
• It needs expanded investments in partnerships and/or direct service delivery capabilities in North America and Asia/Pacific.

• T-Systems has a strong IT services vision and presence in Europe, the Middle East and Africa.
• It has made recent investments in FMC IT services and outsourcing.
• The company has broad and diverse partnerships with key vendors in communications.

• T-Systems must invest in resources and partnerships to become a target partner for MNCs based in North America.
• It has a more limited global presence than the strongest players in this Magic Quadrant, with a heavy reliance on partnerships to deliver in-country capabilities in many parts of the world.
• Internal service supply to other parts of Deutsche Telekom has exacerbated T-Systems' weak financial performance.
• It needs to invest in better partnerships and/or direct service delivery capabilities in Asia/Pacific and North America.

• Unisys maintains good brand equity and recognition in the market for outsourcing.
• Its recent divestiture of network management and integration services to BT Global Services will improve price and margin performance.
• Unisys has a strong international logistics infrastructure in all geographic areas.

• The company's service delivery is inconsistent because of the complexity and size of Unisys and its network partnerships.
• The corporate network is not a core focus for Unisys; deals must be very large to interest Unisys and, generally, the network is absorbed as part of a larger outsourcing engagement (for example, relating to the data center).

• Verizon Business' execution and vision in developing managed service products are strong.
• The company has increased investments, faster than competitors, in managed service portals, tools and personnel.
• The company's market-leading investments in communications as a service make it appealing to organizations of all sizes.
• Verizon Business is strongest in North America and Western Europe.

• Verizon Business must forge partnerships with other professional service providers and vendors to augment capabilities for global integration.
• Verizon Business has aggressively grown its managed services in North America and worldwide. This rapid growth has resulted in some customer complaints related to escalations and account management. Gartner has identified significant efforts by Verizon Business to re-establish service excellence.
• It needs to invest in better partnerships and/or direct service delivery capabilities in Asia/Pacific, Latin America and Central/Eastern Europe.