June 28, 2007 Sprint Is A Strong Performer For Global WAN Services The Forrester Wave Service Provider Summary, Q2 2007
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1 Sprint Is A Strong Performer For Global WAN Services The Forrester Wave Service Provider Summary, Q by Brownlee Thomas, Ph.D. with Christine Ferrusi Ross and Allison Thresher EXECUTIVE SUMMARY Sprint deserves strong consideration by companies with global WAN sites located mostly in the United States and the approximately 30 industrialized and emerging foreign markets reached directly by its all- IP international backbone network. Its longstanding reputation for technical excellence is reflected in its top rated global end-to-end MPLS SLAs and flexible service offer, and its pricing model for site-to-site international MPLS VPN services is the best among its peers. SPRINT IS A GOOD CHOICE FOR US-CENTRIC MNCS Since our last global WAN services evaluation two years ago, Sprint has held its ground even as IP VPN technologies and services have matured and its closest home market competitors have merged to become stronger than ever adversaries. Today, Sprint is a middle of the pack Strong Performer, which might be a surprise to some MNC buyers that have taken its merger with Nextel and huge investments in its domestic US wireless business to indicate an eroding interest in international IP services. But Sprint s CEO and executive team insist the company assigns long-term value to its wireline business. Sprint also recently announced that it will spend $600 million this year to upgrade and expand its international IP backbone. It will open several new overseas MPLS points of presence (POPs) in the Americas and Asia, add some redundant facilities, and upgrade its Cisco core router architecture from GSPs to CSR1 routers. It also is actively negotiating new MPLS interoperability agreements with major domestic and regional partners and will qualify select partner networks to be included in its end-to-end global MPLS SLA. Forrester evaluated Sprint s current offering and strategy for global WAN services against 33 high-level criteria (see Figure 1). Sprint should be considered by MNC buyers that: Are looking for a flexible MPLS services offer. Although a high proportion (90%) of its customers MPLS global WAN sites are connected directly to its all-ip international backbone network through its own MPLS points of presence (POPs) located in the same country, Sprint is a strong advocate of standards-based MPLS interoperability. It provides consistent end-to-end managed global MPLS service delivery in more than 130 countries through interoperability NNIs with other major operators including Orange Business Services and NTT Communications, and includes these and other select carrier networks in its end-to-end SLAs. Headquarters Forrester Research, Inc., 400 Technology Square, Cambridge, MA USA Tel: Fax:
2 2 Want a simplified, easy to understand pricing model. Sprint s standard managed MPLS global WAN pricing model is simpler than others, and it s also the easiest to understand. Its MPLS VPN price quotes bundle port and access, and no additional charges are applied for class-of-service (CoS) including real-time voice. Sprint also offers three options for customer edge/equipment (CE) management; one of these, CE monitoring and notification, is provided to transport-centric MPLS customers at no charge. Have US-centric operations and service support requirements. Sprint deserves strong consideration by MNCs that are US-headquartered or have major US connectivity and support requirements, and are looking for a global WAN service provider that is experienced, technically adept, and flexible. It is particularly well positioned to accommodate service buyers interested in defining, themselves, the desired blend of transport-centric and managed multiple CoS MPLS services options. To see how Sprint stacks up against eight other international network operators, see the Forrester Wave evaluation of the global WAN services market. 1
3 3 Figure 1 Sprint s Global WAN Services Evaluation Overview CURRENT OFFERING Breadth of offering Scalability Flexibility Operations and management Service-level agreements Customer satisfaction STRATEGY Service pricing Value proposition 2007 strategic plans Breadth of offering of global wide area network (WAN) services is generally on par with other operators evaluated. Scalability of international MPLS service network is below par. Sprint has a high proportion (90%) of MPLS global WAN customer sites connected to its own MPLS/IP POPs located in the same country. It has standard bidirectional network-to-network interfaces (NNIs) with Rogers Communications (Canada), Orange Business Services (several countries), NTT Communications (Asia-Pacific), and others in Latin America. Its standard end-to-end or CE-to-CE SLA also applies to customer traffic carried by Rogers and Orange; others are planned in It is negotiating additional NNIs that it expects to formalize in Sprint adapts its customers QoS/CoS feature definitions to NNI partners CoS feature definitions, and does not freeze the network configuration to a specific set of classes and profiles. It supports interprovider MPLS based on the IETF RFC A option. Sprint maintains a global network operations center (GNOC) and support team for its global IP network. The team is staffed with operations specialists, analysts, and engineers with expertise managing large-scale IP networks including CCIE certifications. Information was not provided on headcount or MPLS-certified staff numbers. Sprint uses a distributed NOC support model that interconnects geographically diverse NOCs based on assigned technical functions (including two multilingual first contact centers for IP products in the United States). Presales and postsales staff allocated in major international markets support smaller and medium-size accounts as well as larger customers. Customers in Sprint s Strategic, Enterprise, and General Business segments that have global WAN service requirements receive a dedicated account team for ongoing support. Sprint s SLAs are well above average among the operators evaluated. Sprint s customer satisfaction rating, per customer references and client interviews, is above average. Concerns relate to its limited investment in relevant international facilities and local support capabilities. In 2007, its capex budget includes $600 million to be spent on its IP backbone network including new POPs in several countries. It has a new standard NNI with NTT Communications to extend its service support capabilities in several countries in the Asia Pacific region, and another is under negotiation in Latin America. Customer loyalty is on par with others. Sprint s service pricing is above average. Sprint s value proposition is below par. Sprint s 2007 strategic plans are above average. Source: Forrester Research, Inc.
4 4 Figure 1 Sprint s Global WAN Services Evaluation Overview (Cont.) MARKET PRESENCE Sales capabilities Enterprise customer base Financials Sprint s smaller-than-average number of sales and sales support staff for global WAN services is integrated with its US domestic sales and customer service organization. MPLS training is provided to the entire sales and support staff for enterprise sales, and all staff in the major sales branches also receive both baseline training and regular update sessions on IP technology and service enhancements. Sprint supports 170 customer global WANs that have sites in more than 10 countries. Twenty-nine percent of its global WAN customers buy managed global MPLS services. The median size managed global WAN has six MPLS ports, the average 23 MPLS ports. Sprint s largest global WAN has more than 2,500 sites (including the United States). Three-quarters of customers non-us global WAN sites are evenly spread across Europe, Asia Pacific, and Latin America. More than half its global WAN contracts in 2006 were new customers. Typical contract length for Sprint s global WAN services is three years. Sprint s financials are better than average. Source: Forrester Research, Inc. Go online to download additional in-depth data and scores for this vendor and other vendors included in this Forrester Wave evaluation. SUPPLEMENTAL MATERIAL Online Resource The underlying spreadsheet for Figure 1 is available online. The spreadsheet includes more detailed data and scores for this vendor. This detailed data and scores for this vendor are also available online through an Excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings. The Forrester Wave Methodology We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our final list. We choose these vendors based on: 1) product fit; 2) customer success; and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that don t fit the scope of our evaluation.
5 5 After examining past research, user need assessments, and vendor and expert interviews, we develop the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria, we gather details of product qualifications through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies. We set default weightings to reflect our analysis of the needs of large user companies and/or other scenarios as outlined in the Forrester Wave document and then score the vendors based on a clearly defined scale. These default weightings are intended only as a starting point, and readers are encouraged to adapt the weightings to fit their individual needs through the Excel-based tool. The final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve. ENDNOTES 1 Forrester s evaluation of nine major international network operators providing global wide area network (WAN) services to large multinational corporations (MNCs) across 33 criteria found that global firms now have better supply choices for global WAN services relative to our previous global WAN Forrester Wave evaluation in Orange Business Services (formerly Equant) retains its market-leading position, but the gap has narrowed considerably, with AT&T and BT Global Services joining it in the Leader category. Verizon Business has gained the most ground during the past two years, particularly with respect to its current offering. The Strong Performer category, also expanding and stabilizing, now includes five large telcos and Global Crossing, all of which insist they are fully committed to investing in and pursuing new opportunities in this sector including enhancing and expanding their international IP networks and establishing standard intercarrier MPLS interoperability and service-support partnerships with other operators. See the, The Forrester Wave : Global WAN Services, Q report. Forrester Research, Inc. (Nasdaq: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. For more than 23 years, Forrester has been making leaders successful every day through its proprietary research, consulting, events, and peer-to-peer executive programs. For more information, visit , Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. To purchase reprints of this document, please resourcecenter@forrester.com
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