Nemertes Research

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1 Q3 12 Nemertes Research PilotHouse Awards IP Contact Centers The Nemertes Research annual PilotHouse Awards provide insight on the performance of technology vendors, according to feedback from IT decision- makers who use their products or services. Nemertes Research

2 TABLE OF CONTENTS IP Contact Center... 3 Award Definition... 3 Overview... 3 Market Classification... 3 Ratings... 5 Ratings Categories... 5 Technology... 5 Customer Service... 5 Value... 5 Results Summary... 6 Analysis... 7 PilotHouse Market Challenger Winner... 9 Interactive Intelligence... 9 Technology Customer Service Value PilotHouse Market Leader Winner Avaya Technology Customer Service Value Pilothouse Finalists: Market Leaders Cisco PilotHouse Finalists: Market Challengers Siemens Enterprise Communications NEC Genesys ShoreTel Aspect Conclusion Methodology Sample Frame Planned Sample Size Survey Sub- Groups/Stratification Awards Timing Incentives to Participate & Time Commitment Future Plans

3 IP CONTACT CENTER By Robin Gareiss Executive Vice President and Founder, Nemertes Research Award Definition The Nemertes PilotHouse award for IP Contact Center (IPCC) recognizes IP contact- center vendors that offer solutions such as Automatic Call Distribution (ACD), Integrated Voice Response (IVR), Computer Telephony Integration (CTI), and related applications over an IP- based service. IT professionals who use these services rated their providers on technology, value, and customer service. Overview The goal of the PilotHouse awards is to provide analysis of vendor and service- provider performance from the perspective of the IT professionals who actually use the technology. Many research firms offer market rankings, but Nemertes' research and analysis is unique. It is 100% based on the views and experiences of actual users. The research is wholly independent and not sponsored, and neither Nemertes nor the vendors or service providers being rated have any influence over ratings performance. The opinions are those of business users of the technology or service. By combining direct interviews of IT leaders with surveys of screened IT users, Nemertes is able to provide unique insights into why IT professionals rate vendors the way they do. For this award, Nemertes gathered ratings on IP Contact Center providers with a range of offerings. (More detail on the program, and demographics of participating IT professionals is available in the methodology at the end of this report.) Market Classification We segmented providers into two categories: Market Leaders and Market Challengers, and offered awards within each category. To determine the categorizations, Nemertes analysts evaluated IP Contact Center market presence (looking at revenue, device shipments, and number of customers) based on our own research and publicly available data. Analysts also examined natural breakpoints in the data, and segmented the Market Leaders as those who collectively accounted for the vast majority of each market, and Market Challengers who accounted for a smaller percentage of the overall market. 3

4 Market Leaders Avaya, Cisco IP CONTACT CENTER Market Challengers Aspect, Genesys, Interactive Intelligence, NEC, ShoreTel, Siemens Enterprise Communications Table 1: Vendor Classification, IP Contact Center, 2012 For IPCC, we evaluated publicly available market- share data, as well as Nemertes benchmark and survey data to determine which providers had a leading market presence. There are numerous vendors in this space, including IPCC equipment manufacturers, software- only solutions, and hosted/saas offerings. Vendors deliver products focused on different market segments (e.g. small, midsize, large), standalone contact- center offerings, and contact- center applications bundled within larger IP telephony and Unified Communications (UC) platforms. Market Leaders include one company with a long history of focusing on the contact center market, Avaya, and one relatively new vendor in the contact- center space, Cisco. Given Cisco s market size and position in the IP telephony space, it quickly has emerged into a leader. On the Market Challenger side, we see Interactive Intelligence, which like Cisco, is a relative newcomer to the contact- center market; Genesys, recently spun out of Alcatel- Lucent to once again become an independent company; and Aspect, a long- time player in the contact- center space. Other Challengers include NEC and Siemens, firms with strong market presence outside the U.S., and also ShoreTel, which bundles contact- center features such as call distribution and IVR into its telephony systems. As enterprise adoption of IPCC grows, TDM solutions are going away. IPCC vendors may maintain the PBX portion of their offerings, but they convert everything else to an IP- based solution to maintain their customer base. The wide variation in approaches to IPCC, no all- inclusive methodology, and combinations of ACD, IVR, CTI and other technologies make for a fragmented marketplace, especially as IPCC vendors increasingly look to play in Web and mobile interaction areas. IPCC remains a strong growth market as companies look for low- cost, high- quality solutions to providing customer service. 4

5 Ratings We asked IT professionals to rate IPCC providers using a 5- point scale, where 5 is excellent, 4 is good, 3 is fair, 2 is poor, and 1 is unacceptable. Nemertes then used these raw scores to compute average scores for each category. The maximum possible score is a 5.0 (and although some vendors did receive perfect scores from individual IT participants, none received a perfect score when all ratings were averaged). Ratings Categories The participants rated their technology providers in three areas: Technology Customer Service Value From these three ratings, Nemertes calculated an overall score (weighting each of the three categories equally). Technology Technology ratings gauge how customers view the sophistication, features, and implementation of the IPCC service they re rating. Additionally, this score reflects how much of a leader a vendor is in the IPCC industry, from the perspective of the customer. Customer Service Customer- service ratings cover how providers perform in areas such as technical support, responsiveness to deployment problems and concerns, sales support, and general customer care. Additionally, technology users considered the willingness and ability of the vendors to answer questions effectively and promptly. Value Value ratings aren t based solely on cost; rather, we ask participants to rate what they get in technology and support compared to what they pay for it. In other words, are they getting their bang for the buck? 5

6 Results Summary Figure 1: Overall Scores, IP Contact Center, 2012 Among Market Challengers, Interactive Intelligence wins the PilotHouse Award. Interactive Intelligence s overall score is Among Market Leaders, Avaya wins the PilotHouse Award. Avaya s overall score is A total of eight providers received enough responses to be included in this year s analysis. Two providers are Market Leaders; six are Market Challengers. Market Leaders overall average score is Market Challengers overall average score is

7 ANALYSIS Table 2: Vendor Scores, IP Contact Center, 2012 This year s IPCC PilotHouse ratings show a fairly sizable difference in the scores of Market Leaders and Market Challengers, with one exception: Interactive Intelligence, the only Market Challenger to outscore all Market Leaders in overall score. For example, the average overall score for Leaders is 4.13, compared to only 3.85 for Challengers, and customer services for Leaders is 4.15, compared to 3.80 for Challengers. Aspect s low overall scores bring the Challengers down, though. Interactive Intelligence posts the highest scores in all areas except customer service. Overall, IT staffs are relatively pleased with technology. Value is the area they score the lowest, which means one of two things: Either the solutions are too expensive, or the providers are not appropriately conveying the value proposition of their soluions. This year, we see shifts in market presence. Aspect and Genesys were Market Leaders last year, but they have shifted to the Market Challenger category this year, leaving only Avaya and Cisco as Leaders for IPCC. The IPCC market this year has shifted to Concentrated, meaning one vendor in this case, Cisco controls more than 50% of the market. Keep in mind this is IP Contact Center, so it does not include aging digital systems that still make up a significant part of the market. Cisco won a measureable amount of share this year, at the peril of Avaya and Genesys, primarily. 7

8 Overall, Market Leaders post a score of 4.13, and Challengers earn a Reason: Overall, Leaders beat Challengers in all categories, a shift from last year when the opposite was true (though the companies that comprised Leaders and Challengers were different). The most significant gap this year is in customer service (4.15 vs. 3.80). Leaders are able to better to deliver a higher level of service, while Aspect drags down Challenger scores. In technology, Market Leaders garner a score of 4.14, and Challengers get a Reason: Market Leaders are at the top for technology, but we must note that Market Challenger winner Interactive Intelligence receives the overall top score. Leaders are focusing on integration with their overall UC portfolio, while Challengers such as Interactive Intelligence, Aspect, and Genesys singularly focus on the contact center. Siemens and Genesys here outscore Market Leader Avaya. In customer service, Market Leaders win with a score of 4.15, and Challengers trail with a Reason: Contact centers generally require significant hand holding because of their complexity and application integration requirements. The Leaders, Cisco and Avaya, both offer professional- services business units to assist in these areas. In other technology areas, Challengers generally excel in customer service as a differentiator from the Leaders, but this is not the case in IPCC, though Interactive Intelligence and NEC do outscore Cisco. Here again, Aspect s 3.00 score brings down the average score for Market Challengers. In value, Market Leaders earn a score of 4.10, and Challengers again trail with a Reason: Keep in mind value is not synonymous with price. Though Challengers tend to be less expensive, Leaders are doing a better job conveying a value proposition, again with Interactive Intelligence and Siemens as exceptions, both edging out Market Leader Cisco. Each of the winners had an edge in different categories. Interactive Intelligence s high technology score (4.24) is key to its victory, but it also scored the highest among all in value (4.18). In Avaya s case, customer service (4.19) is the primary reason for its victory. Avaya was second in value, with a 4.14, which also helped it win. 8

9 PILOTHOUSE MARKET CHALLENGER WINNER Figure 2: PilotHouse Market Challenger Winner: Interactive Intelligence, IP Contact Center, 2012 Interactive Intelligence Summary: Interactive Intelligence wins not only the Market Challenger award, but posts the highest overall score (4.18) of any IPCC vendor. All three scores technology, customer service, and value are above averages for both Leaders and Challengers. Technology is Interactive Intelligence s strongest showing. The vendor offers a variety of delivery methods cloud, managed, or on- premises for its contact- center solution. Its Customer Interaction Center supports multi- channel IPCC, allowing companies to leverage different media types such as video or instant messaging in the contact center. I would recommend Interactive Intelligence, says the IT manager for a small manufacturing company. Then and Now: Last year, Interactive Intelligence landed in the middle of the pack. This year Interactive Intelligence improved its scores across the board from the

10 ratings. Its overall score jumps from 3.63 to 4.18, while technology skyrockets from 3.42 (its lowest score in 2011) to 4.24 (its highest score in 2012). It also saw increases in customer service (3.71 to 4.12) and value (3.77 to 4.18). Overall, though, they are a good company, says the IT director for a large manufacturing company. Future Direction: Though Interactive Intelligence has a decent margin in its overall score compared to other Challengers, both Leaders are not far behind. Where it must focus moving forward is in customer service. Its score is respectable (ties with NEC and only slightly ahead of Cisco), but Avaya s 4.19 score is significantly higher. Technology Interactive Intelligence s solution gets the top score for technology. The contact- center applications are well integrated, and they also integrate with business applications. Interactive Intelligence also benefits from its tightly integrated UC offering, it s flexible model for delivering integrated on- premises and cloud- based offerings, and its business process management engine. The ding I would give them is we considered them for unified messaging and heard not- so- good feedback. The contact- center product is good, though, says the director of telecom for a university. Customer Service Customer service is Interactive Intelligence s lowest score, at Though still a respectable score, Avaya s 4.19 score wins this category, NEC ties with Interactive Intelligence, and Cisco is not far behind with a There were a few things we haven't been happy with customer service. They overpromised. And it hasn't worked as well as they said, says the IT director for a manufacturer. So far, we have no issues, says the director of telecom for a university, who gives Interactive Intelligence a perfect 5.0 for customer service. Value Interactive Intelligence s 4.18 value score is the top among all IPCC vendors. This basically says IT professionals feel they are getting a lot of bang for the buck. Interactive Intellgence s software- only or cloud/hosted service delivery models allows its customers to minimize hardware investment costs. 10

11 PILOTHOUSE MARKET LEADER WINNER Figure 3: PilotHouse Market Leader Winner: Avaya, IP Contact Center, 2012 Avaya Summary: For the second year in a row, Avaya wins the Market Leader award for IPCC. Solid scores in all three categories result in a 4.14 overall score, which is higher than last year s score. Our contact center works every single day at a global level and doesn't require a lot of care and feeding. When it does, the changes required are straightforward, says the senior architect for a large manufacturer. Then and Now: Avaya s ratings increase in all categories this year, except technology. Value increases most significantly this year, from 4.02 to 4.14, followed by customer service, which increases from 4.10 to Given the decrease in technology (4.22 to 4.10), the value and customer- service scores are key to Avaya s victory this year. Avaya is a good vendor, says the senior architect for a large financial- services company, who rates Avaya a perfect 5.0 across the board. 11

12 Future Direction: Avaya s margin of victory over Market Leader Cisco is not substantial (4.14 vs. 4.11), so Avaya cannot rest on its laurels with two years of IPCC wins under its belt. It must focus on continued integration and migration with legacy Nortel platforms, a bolstered cloud- based offering and integration with both its, and competitor s unified communications. And, although Avaya has a solid reputation among large enterprises, it must improve its messaging and its value proposition for the small and midsize businesses as well. Technology Technology, historically, has been a strength for Avaya, particularly in the contact- center space. This year, though, its score drops from last year s, primarily because customers are seeing it less as an innovator in contact center platforms as it focuses its efforts on UC mobility, virtual reality, and video. In addition to tighter integration and cloud- based services, Avaya should improve offerings for business analytics, particularly as companies use multi- channel contact centers. Large organizations, in particular, want to analyze unstructured data (say, from video communications between contact- center agents and customers) and re- examine Key Performance Indicators (KPIs) to optimize contact center functionality. They are in a state of flux as they integrate the Nortel and Avaya portfolios. There are challenges there. It wasn't built to work together, and they're trying to shoe- horn it in, says a manager at a large hospitality company. The latest software release fixed a lot of bugs. It s a good platform, says the director of telecom for a university. We need to complete our migration to Avaya to gain new features. We re excited about the new features. Customer Service Despite Avaya s slow technology innovation this year, it manages to significantly improve customer service. Some of this is because of better partner training and some is because of its ability to offer managed services and take over the day- to- day operations for organizations. Avaya s 4.19 customer- service score is the highest among all IPCC vendors. The next closest score is 4.12 (for Interactive Intelligence and NEC). Though most PilotHouse participants say Avaya s customer service is solid, a few point out that Avaya s downsizing is affecting complex troubleshooting. We have a lot of issues, and they can t resolve why they're happening. We're pushing for tier 3-4 escalation, and their downsizing has caused slow 12

13 escalation response, says the director of telecom for a large healthcare company We re very happy with them, says the VP for a hospitality company regarding customer service. Value Avaya s 4.14 value score is the second highest in this year s program. IT professionals from some larger organizations say actual prices are high compared to others, but the fact that Avaya scores relatively well in value means it is doing a good job conveying the value proposition to customers. The cost structure can be high, says the VP of a very large hospitality company, who nonetheless rates Avaya a 4.0 for value. 13

14 PILOTHOUSE FINALISTS: MARKET LEADERS Figure 4: PilotHouse Market Leaders: IP Contact Center,

15 Figure 5: Market Leader: Cisco, IP Contact Center, 2012 Cisco Cisco s overall 4.11 score is impressive and right on the heels of Market Leader Avaya, but its customer- service and value scores are not high enough to claim victory. Its 4.18 technology score is second highest of all vendors and wins the Market Leader category. Cisco s IPCC market share, though, is increasing substantially. Several participants point to the Cisco brand as excellent and a key reason they are using the IPCC product. Again, Cisco is optimum. Never disappointing, says the CIO of a transportation company. The average overall score of all Market Leaders is 4.13; Cisco s is The average technology score of all Market Leaders is 4.14; Cisco s is Their integration with the network is an advantage. We re able to scale and leverage disparate assets better, says the VP of a healthcare company. The average customer- service score of all Market Leaders is 4.15; Cisco s is Their VAR has provided a better configuration management tool than Cisco provided. Operational support is still kludge, says the VP of IT for a healthcare company. The average value score of all Market Leaders is 4.10; Cisco s is It's so complicated and expensive to support. Avaya was so much easier, and we didn't realize until we made the decision, says the telecom director for a large manufacturer. 15

16 PILOTHOUSE FINALISTS: MARKET CHALLENGERS IP Contact Center: Market Challengers Interactive Intelligence Siemens Enterprise Communications NEC Genesys ShoreTel Aspect Overall Technology Customer Service Value Figure 6: PilotHouse Market Challengers: IP Contact Center,

17 Figure 7: Market Challenger: Siemens Enterprise Communications, IP Contact Center, 2012 Siemens Enterprise Communications Siemens finishes second among Market Challengers with a 4.08, as it drops from its 4.20 rating in 2012 that propelled it to be the Challenger winner. Technology and value are its high- scoring areas. Among the comments from PilotHouse participants, the most common cite Siemens for its good value and easy- to- use solutions. We are very satisfied overall, says the IT director for a healthcare company. The key issue: IT professionals do not sense Siemens is their partner, and willing to understand the business issues they are trying to address with their IPCC solution. Siemens scores are all higher than the average for Market Challengers. The average overall score of all Market Challengers is 3.85; Siemens is The average technology score of all Market Challengers is 3.92; Siemens is The average customer service score of Challengers is 3.80; Siemens is We're doing more with less, and now vendors aren't really being partners. They want you to spend, spend, spend, but they're not supporting anything, says the director of telecom for a healthcare company about Siemens service. The average value score of all Market Challengers is 3.86; Siemens is They offer fairly good service for their value, says an IT engineer from an educational institution. 17

18 Figure 8: Market Challenger: NEC, IP Contact Center, 2012 NEC NEC scores a respectable 4.04 overall score this year. Though it doesn t win, it improves all scores but value from last year. Overall went from 3.94 to 4.04, while customer service increases from 3.79 to 4.12 and technology from 3.96 to NEC s drop in value is from 4.07 to Though it has improved this year, its competitors have improved more substantially. Still, participants applaud NEC for its easy- to- use solution. NEC also is above average in all scores for Challengers. The average overall score of all Market Challengers is 3.85; NEC s is The average technology score of all Market Challengers is 3.92; NEC s is The average customer service score of all Market Challengers is 3.80; NEC s is NEC does a great job. We have no outages, says an IT executive from a professional- services firm. The average value score of all Market Challengers is 3.86; NEC s is NEC s product is not bad, and it s a fair value, says the CTO of a midsize manufacturer. 18

19 Figure 9: Market Challenger: Genesys, IP Contact Center, 2012 Genesys Following Alcatel- Lucent s divestiture of Genesys, the IPCC vendor struggles a bit this year compared to others, particularly in customer service. Overall, though, its score increases from a 3.47 to a 3.83, thanks to a solid 4.12 technology score (up significantly from 3.35 last year). Though customer service and value did increase from last year (3.42 to 3.65 for customer service and 3.65 to 3.81 for value), it must continue improvement in both areas to come out on top. Participants say the technology, in terms of capabilities and product features, is good. But it s too complex and expensive, and support is lacking. The average overall score of all Market Challengers is 3.85; Genesys is It works, but we've struggled to promote it to the business, says the director of telecom for a pharmaceutical. The average technology score of all Market Challengers is 3.92; Genesys is The average customer- service score of all Challengers is 3.80; Genesys is It's insanely complex. Not getting good support from company, says an IT manager for a midsize high- tech company. The average value score of all Market Challengers is 3.86; Genesys is It s very expensive if you aren t able to invest in internal skills to leverage it, says the director of telecom for a global pharmaceutical. 19

20 Figure 10: Market Challenger: ShoreTel, IP Contact Center, 2012 ShoreTel ShoreTel is a newcomer to the IPCC awards this year, garnering enough ratings in the contact- center space to be counted individually. Its 3.83 overall score is not enough to propel ShoreTel to the top of the pack. Technology and value (both 3.80) are the low scores; customer service (3.90) is the highest. None of the categories is high enough to enter winner territory. IT participants say ShoreTel and its partners are helpful and provide good service. ShoreTel, whose strength is in IP telephony, must do a better job conveying the value proposition of its contact- center solution, particularly for small and midsize businesses, which comprise most of this year s ratings for ShoreTel in IPCC. The average overall score of all Market Challengers is 3.85; ShoreTel s is The average technology score of all Market Challengers is 3.92; ShoreTel s is The average customer- service score of all Market Challengers is 3.80; ShoreTel s is It s very easy to use, says the CIO of a small manufacturing company. The average value score of all Market Challengers is 3.86; ShoreTel s is

21 Figure 11: Market Challenger: Aspect, IP Contact Center, 2012 Aspect For the second year in a row, Aspect is in last place. On the bright side, its ratings improve in all areas except customer service. The overall score increases from 3.06 to 3.17, driven most significantly by increases in technology (3.09 to 3.20) and value (2.91 to 3.31). All of Aspect s scores are below averages for Challengers. The average overall score of all Market Challengers is 3.85; Aspect s is Aspect has been a mostly solid partner for several years. We have had a couple of upgrade projects that weren t handled with the level of care we felt we deserved, and in one instance it led to several hours of downtime. I believe we have put that behind us and have a mostly positive outlook on them. Would like to see them dive deeper into providing their services in the cloud, says the CIO of a professional- services firm. The average technology score of all Market Challengers is 3.92; Aspect s is The average customer- service score of all Challengers is 3.80; Aspect s is It would benefit us if we could competitively bid the Aspect call center maintenance/work. For now, not much opportunity for that due to Aspect s limited vendor distribution system for maintaining the product, says the director of telecom for a midsize energy company. 21

22 The average value score of all Market Challengers is 3.86; Aspect s is They are increasing pricing, and there is no strategy around acquisitions, says the director of telecom for a transportation company. 22

23 CONCLUSION IP Contact Center services continue to grow and ultimately will replace analog solutions. The reliance upon IPCCs for internal communications and customer service will continue to grow in complexity as companies add the ability to communicate via video, instant messaging, Web conferencing, and social media. They also will become more complex with mobile and UC integration, along with the need for complex analytics of the multi- channel communications. Re- evaluate the capabilities at least annually, but IPCCs generally are a long- term solution because of the integration and complexity involved with establishing a functional contact center. Vendor Selection: Based on the outcome of the PilotHouse program, here is Nemertes guidance (with vendors listed in priority order): Evaluate a minimum of three of providers. Interactive Intelligence, Avaya, Cisco, and Siemens are solid options. Add a vendor manufacturer, based on which vendor you currently use primarily. If technology is your key concern, consider Interactive Intelligence, Cisco, Siemens, and Genesys. If customer- service is your key decision criteria, consider Avaya, Interactive Intelligence, NEC, and Cisco. If value is your key goal, consider Interactive Intelligence, Avaya, Siemens, and Cisco. Differentiation of Leaders and Challengers: Overall, Market Leaders score better than Market Challengers, with the exception of Interactive Intelligence. In terms of decision- making, organizations should also factor their existing UC provider to determine whether there are integration features that make that vendor more appropriate. Advantages of Adding During Technology Refresh: Organizations that are evaluating unified communications, network, or business intelligences refreshes should evaluate IP contact centers as part of that evaluation. Improvement Outlook: Moving forward, we expect organization to focus increasingly on multi- channel and mobile- enabled contact centers and to move more functions into the cloud. In addition, they will need more business analytics functions for unstructured data. 23

24 METHODOLOGY The population includes individuals primarily from U.S. companies (based in the United States, but many of which are global multinationals) who are responsible for selecting or influencing the selection of suppliers of data- center and communications products and services. Sample Frame In selecting the sampling frame, Nemertes has asked individuals in the following populations to rate their providers: Nemertes Research IT executive database, limited to individuals who meet the criteria for the representative population. Individuals from this list represent primarily U.S. companies, but also include companies based elsewhere that have presence in North America. The database includes individuals who have participated in, or who have expressed interest in participating in our research, or with whom Nemertes analysts have established a business relationship. U.S. business subscriber lists, including individuals who have opted to participate in surveys and who have been pre- screened to determine responsibility for selecting or influencing relevant products and services. Individuals participated in this project using two methods: Benchmark interviews. This is a smaller percentage of the respondents, but they provide more detail on the reasons for their ratings. In addition to providing quantitative ratings, Nemertes analysts asked numerous detailed qualitative questions to gauge why they rated their service providers the way they did, as well as gathering other information about their usage of communications services. Electronic survey. This is the largest percentage of the respondents. Those who meet the sample frame randomly received invitations to participate in the survey. Benchmark participants spent one to three hours on the phone or in person with a Nemertes analyst discussing, among other areas, issues relating to their use of products and services. The electronic survey participants answered a subset of the benchmark questions that focus on rating the providers, stack- ranking important criteria, providing financial data, open- ended comments, and demographics. Planned Sample Size According to U.S. Census Bureau figures, there are 2,208,596 companies with five or more employees. Our goal was to receive responses from a minimum of 1,000 individuals, which would give us a 95% confidence level and 3% margin of error if 24

25 every individual rated every vendor in every technology area rated. We received substantial ratings for each technology category (several hundred per category), but each vendor in each area did not receive a rating from every research participant. About 4,100 individuals accessed the survey or participated in a benchmark interview. Of those, about 1,500 meet Nemertes stringent standards to be considered valid. Our survey tool automatically exited individuals employed by IT vendors and providers. Analysts reviewed all other ratings (survey and benchmark) line by line, and categorized as invalid those who demonstrated inconsistencies or inaccuracies in their responses as part of Nemertes complex qualification methodology. We achieved validity across the survey and interviews by ensuring the questions we asked were the same, and that the interview group and survey group represent discrete samples of the same population. Nemertes achieves survey and interview consistency through the use of pre- scripted interview forms and peer review of interview protocols. Analysts also relied upon their own knowledge of the technology areas, natural breakpoints in the data, and interview notes from the survey participants to further validate ratings. Survey Sub- Groups/Stratification Nemertes analysts researched which providers offer products and services in each category and created lists from which participants identified their primary service providers. Participants also were able to select other, and identify a service provider they use that may not be included on the explicit list provided. The challenge is that some providers (Market Leaders) have thousands or tens of thousands of business customers and significant market share, while others (Market Challengers) have a few hundred or few thousand customers and smaller market share. We realized some providers would garner a relatively large number of ratings, based on the number of customers they have, while others would have a relatively small number of ratings. Therefore, we created the two distinct categories for the awards, Market Leaders and Market Challengers, and compared providers within each category. Nemertes placed providers within each category based on its own research and publicly available data. Analysts also examined natural breakpoints in the data. Market Leaders typically have >10% of market share, based on these analyses. Market Challengers typically have smaller market shares. In some categories, there were not enough ratings to issue an award in the Market Challenger category, or the 25

26 market is so new that all vendors are considered Challengers. In these cases, Nemertes issues an award only in the appropriate category. Nemertes reserves the right to address acquisitions occurring during the benchmark and survey period on a case- by- case basis. Unless otherwise noted, an acquisition merging two companies in the same award category must be complete before the start of the survey and benchmark interview period to be counted as one company in the ratings. Awards Nemertes is issuing awards in the following categories: Nemertes PilotHouse Awards, 2012 Award Category Advanced Communications Services Market Leaders Market Challengers MPLS Services Carrier Ethernet Services Internet Access Services Wireless and Mobility Wireless LANs Mobile Device Management No award Application Delivery Application Delivery Optimization Voice Communications IP Telephony Managed IP Telephony Data-Center Technologies Servers for Virtualization Unified Communications Unified Communications IP Contact Centers Video Conferencing Security Data-Center Firewalls Timing The Web- based survey was conducted between March and May The benchmark research was conducted between January and April

27 Incentives to Participate & Time Commitment Participants of the electronic survey received a small incentive for participating in the survey. Participants from Nemertes database receive the findings and are invited to participate in a results- overview Webcast, in exchange for their time. The Web- based survey takes about 15 minutes to complete; the benchmark requires one to three hours of participants time. Future Plans Nemertes plans to conduct its PilotHouse Awards program annually, though it retains the right to cancel or revise the program at any time. About Nemertes Research: Nemertes Research is a research- advisory and strategic- consulting firm that specializes in analyzing and quantifying the business value of emerging technologies. You can learn more about Nemertes Research at our Website: 27