Magic Quadrant for Enterprise LAN (Global)

Transcription

1 Research Publication Date: 30 April 2009 ID Number: G Magic Quadrant for Enterprise LAN (Global) Mark Fabbi, Tim Zimmerman Cisco remains the leader in the enterprise LAN Magic Quadrant, but a stratification of the alternative players is resulting in new opportunities for enterprises. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 WHAT YOU NEED TO KNOW This is an updated version of research published on 26 March The vendors in the 2009 Magic Quadrant for Enterprise LAN (Global) provide viable, well-supported LAN infrastructures for mainstream enterprise requirements, but are able to provide differentiation through global strategies and functionality, such as wireless LAN (WLAN), industrial Ethernet and advanced security features that may be applicable to vertical market strategies. It is imperative that enterprises balance requirements for largely ized feature sets with new capabilities and the total cost of ownership for the anticipated five- to seven-year life span of new switches. Major LAN purchases and upgrades should not take place without a full competitive review, which, in most cases, will result in savings of at least 30%. MAGIC QUADRANT Figure 1. Magic Quadrant for Enterprise LAN (Global) Source: Gartner (April 2009) Market Overview The LAN switching market is mature; however, its importance is increasing as enterprises move toward a secure, collaborative workplace, and as Ethernet switching functionality is integrated into more data center functions. For campus networking, most enterprises should be looking at a well-ized feature set that all the vendors can easily provide. Beyond this feature set, a Publication Date: 30 April 2009/ID Number: G Page 2 of 14

3 number of largely product-related attributes have emerged that tend to drive many LAN upgrades. These feature sets center on: Support for an open, s-based platform for convergence applications Ability to embed security in the LAN infrastructure Increasing requirements to procure an integrated wired and WLAN access layer with common service applications such as security and network management Support for increasingly large, scalable data centers Beyond the technology evolution, the biggest overarching issue in LAN switching is focused on cost containment. There is a huge difference in price among the various vendors' solutions and among alternatives within a single vendors' product offering. In addition, there are major differences in support programs and in the ability to support products for an extended period of time to take advantage of the increasing life span of today s products. During the past 12 months, the vendor landscape has noticeably shifted. Cisco is still the dominant vendor, with strong revenue market share (77%) and port market share (54%). The remaining 46% of port share is divided among a variety of vendors that are beginning to more aggressively challenge Cisco. HP ProCurve continued to outpace the market by a wide factor and gain in overall share, but it still trails Cisco. HP ProCurve s increasingly close ties with the rest of HP make it a strong player in this market. Brocade acquired Foundry Networks to create a larger company with a strong, end-to-end data center and Ethernet networking portfolio. Enterasys ended up in a joint venture with Siemens Enterprise Communications, which is jointly owned by The Gores Group (the private equity parent of Enterasys) and Siemens. 3Com is finally leveraging the strong assets available in its H3C Technologies subsidiary, and is finally beginning to behave as a single company. At the other end of the spectrum, Nortel is suffering from ongoing financial issues, with its January 2009 bankruptcy protection filings. The result is that rather than a large number of small vendors all vying for attention, we are seeing the market stratify, with HP ProCurve breaking away; Brocade and 3Com representing interesting and potentially disruptive approaches, while Alcatel-Lucent (despite strong growth during the past two years), Enterasys/Siemens and Extreme Networks all struggle for relevance. Despite maintaining a reasonable revenue stream, Nortel joins a lower tier, pending the results of its restructuring. We are seeing varying approaches in enterprise designs and rather than think of LAN switching as one homogeneous solution, enterprises are increasingly breaking the market into three strata: One for the workgroup or access layer (in some cases, thinking of integrating their wired and wireless purchases) A second for the enterprise core A third for emerging data center requirements Market Definition/Description The LAN switching market is a longstanding, mature market. LAN infrastructure is one of the largest network equipment expenditures for enterprises with global revenue (for business-class products) of $16.1 billion in 2007, contracting by 4%, to $15.4 billion in Only two vendors increased revenue during 2008 HP ProCurve increased revenue by 24%, while Alcatel-Lucent grew by 11%. The market has evolved to one where products are expected to have a useful deployment life of at least five to seven years (see "Toolkit Tactical Guideline: New Enterprise Network Useful Life Recommendations"). Although mature, this market is not commodity-based. Significant innovation exists in the market at a technology and economic level; however, as Publication Date: 30 April 2009/ID Number: G Page 3 of 14

4 described above, enterprises should look at many of the requirements being s-driven, and a significant percentage of the market should be looking for more-cost-effective, easier-tomanage solutions to their infrastructures. Many new and emerging decision criteria must be considered when looking at the market. Internet Protocol telephony (IPT) requirements (technologies such as Link Layer Discover Protocol-Media Endpoint Discovery [LLDP-MED], Power Over Ethernet [PoE], quality of service [QoS] and resiliency) have largely become ized, with the primary difference between vendors being their ability and willingness to support diverse vendor requirements across the unified communications market space. Vendors with their own telephony solutions tend to be much less willing to provide the required level of integration support to meet their customers' requirements. On the security front, network access control is another area of interest in the market. We expect network access control to be a feature of switches in the future; however, a lack of s means that integrated approaches are largely proprietary. Although network access control will become an important capability, embedded security will expand to provide morecomplete protection, and will include technologies such as post admission control, threat containment and content security. New vendors are emerging with embedded network security as their core competency, and they are adding comprehensive switching features to compete at the edge of the network. In the core of the network, we're also observing an evolution of requirements. Large data centers are becoming increasingly dependent on the network layer. Requirements for emerging data centers can involve thousands of Gigabit Ethernet server connections, with a requirement for a 10 gigabit (Gb) interconnection between the switches. Another approach is to deploy a dedicated server rack switch with a 10Gb uplink into the core. To meet either of these high-end architectures, an individual core switch must support many hundreds of gigabit connections and have dense, wire-speed, low latency 10Gb capabilities. Switches need to have enough combined port density to allow switch interconnection without seriously reducing the number of devices connected to the switch. We are finding the high-end market stratified, with vendors such as Brocade, Cisco and Juniper Networks emerging as the leading players in high-capacity, scalable architectures. These new data center requirements are causing a new category of switches to emerge. It is no longer valid to think of one, core switching market, where there is a near-total overlap between the connectivity required to support user connections and that required for connecting servers and storage in the data center. This split between aggregation and data center connectivity will become more prevalent. We are also seeing growing interest in converging the access layer. In our survey of vendor references, more than 60% purchased their WLAN solution from the same vendor as their wired LAN. Roughly half of these decisions were made as part of a single decision process. Although our client inquiries don't reflect quite this level of convergence, we have clearly seen a trend in this direction, and we have considered a vendor s activities in this area as a part of their product capabilities and vision. The final key evaluation criterion is focused on delivering a cost-effective infrastructure solution. A significant portion of the market hasn't used the sophisticated features available in many vendors' products, and now faces upgrades as their installed bases age. In the overall market, vendors achieve a 60% to 65% gross margin in LAN switching, indicating that more-cost-effective approaches are certainly possible. Organizations should focus on the life cycle costs of their infrastructures, including capital costs, warranty terms and conditions, and available services. Organizations that are upgrading infrastructures that are more than seven years old should focus on procuring a, rich feature set, but should target cost reductions for capital and maintenance costs of at least 50%. The market has options for lower-cost switches (from a range Publication Date: 30 April 2009/ID Number: G Page 4 of 14

5 of providers), comprehensive lifetime warranties and free software upgrades to allow for a morecost-effective economic model, without giving up the required level of functionality. For the broader market, cost should be an elemental consideration when looking at LAN infrastructures. Many enterprises overprovision their LANs, especially at the edge. Enterprises can procure 10/100 edge switches with PoE for the majority of their user populations, or can look to vendors with significant value propositions for 10/100/1000 options. Only functions with exceptional network requirements (such as video production engineering, medical imaging, geographic information systems, high-end computer-aided design and scientific research) would justify the use of gigabit to the desktop. The adjustment to purchase 10/100 or WLAN as the connection would save more than 15% of overall LAN procurement and maintenance costs for the enterprise. Further fine-tuning of requirements, combined with competitive bidding, would reduce these costs by an additional 15% to 50%. Vendor viability comes up in many of our discussions, given the large discrepancy between Cisco's LAN revenue and the rest of the market. However, beyond the uncertainty surrounding Nortel's bankruptcy protection proceedings (we expect to see some clarity in this situation later in 2009), we do not see any significant risk with the current market players. Inclusion and Exclusion Criteria Vendors in this Magic Quadrant need to demonstrate an ability to deliver enterprise-class solutions for LAN infrastructure to the global market. Market share should demonstrate at least 1% revenue or port share of the broad, enterprise-focused Ethernet market, or at least 5% in a significant market segment. Vendors included in this research have the ability to provide a full campus LAN infrastructure, or have innovated in select areas to provide key and differentiated functionality. Added No vendors were added. However, we have analyzed 3Com based on total performance of its traditional 3Com branded business (largely in the developed world), and H3C, the China-based subsidiary focused on China and other developing markets. Juniper Networks announced its entry into the Ethernet switch market in January 2008 (see "Juniper Entry Needs More to Compete in Ethernet Switch Market"), and started shipping products in April Juniper has achieved noticeable success in its first year of business, with quickly growing revenue, an increasingly strong product offering and significant end-user interest. However, its revenue ($28 million in fourth-quarter 2008 and $56 million for calendar year 2008) does not yet meet our criteria for inclusion. We expect Juniper to meet the requirements for future inclusion, and we continue to watch and analyze the company s growing relevance in this market. Dropped Force10 was dropped from the Magic Quadrant because it no longer meets our revenue requirements for inclusion. Evaluation Criteria Ability to Execute The following provides some insight into the criteria Gartner uses when evaluating a vendor's ability to execute. At a high level, our analysis of ability to execute attempts to capture how well a vendor is performing across primary functional units of the business product, sales/channels, marketing, service/support and financial. Publication Date: 30 April 2009/ID Number: G Page 5 of 14

6 Product: Evaluates vendors by looking at their overall portfolio, with a particular focus on the four attributes identified: convergence, embedded security, data center scalability and life cycle attributes. More emphasis was placed on capabilities that would apply in an open, multivendor application scenario, because many of these areas cross boundaries of the IT architecture, making proprietary protocols a problem. Overall Viability: Looks at a vendor's investments in a specific market, its financial investments and capabilities, and its long-term viability. Sales Execution/Pricing: Was weighted higher than others on the execution axis, because it combines an evaluation of the presales and go-to-market activities, as well as an analysis of the resulting pricing and solution to the enterprise. On presales activity, the evaluation focuses on the vendor and its channel's ability to deliver comprehensive LAN infrastructure solutions especially those focused on the three technical areas of innovation: convergence, security and data center. The second aspect of this criterion includes our evaluation of the cost-effectiveness of the solutions for capital purchase and long-term maintenance. Market Execution: Focuses on how the vendor is perceived in the market, and how well its marketing programs are recognized. For LAN infrastructure, the evaluation focused on how well the vendor was able to influence the market around key messages and attributes related to the four key areas in the market. An additional indicator for this criterion is how often Gartner clients consider a vendor as a possible supplier in a shortlist evaluation. The change in momentum in this indicator is particularly important. Customer Experience: Looks at all aspects of the customer interaction, with a heavier weighting on postsales service and support activities (see Table 1). Table 1. Ability to Execute Evaluation Criteria Evaluation Criteria Product/Service Overall Viability (Business Unit, Financial, Strategy, Organization) Sales Execution/Pricing Market Responsiveness and Track Record Marketing Execution Customer Experience Operations Source: Gartner (April 2009) Weighting high no rating Completeness of Vision Evaluations for completeness of vision attempt to determine how well the vendor understands and is preparing for future market conditions, as well as for shaping the future market. Market Understanding: Looks at the vendor's ability to look into the future and drive new ideas into product road maps and offerings. In this market, leadership in driving the four key areas into the product offering is a good example, and demonstrates key abilities in this area. Marketing Strategy: Evaluates the ability of the vendor to influence the market through its messaging and marketing campaigns. Vendors that have incorporated the key LAN criteria discussion points in the industry have demonstrated an ability to use their marketing strategies to Publication Date: 30 April 2009/ID Number: G Page 6 of 14

7 their advantage. Examples are Cisco's "self-defending network" marketing campaign or Nortel's Energy Efficiency Calculator. Offering Strategy: Evaluates how the vendor invests in R&D to continue to innovate in key areas and ensure that future products continue to evolve. Business Model: Provides a view into the vendor's overall commitment to the market, and its willingness to continue to make the right investments across all aspects of the LAN business unit. Innovation: Measures the vendor's ability to drive into new, related areas of LAN switching, and to help move not only its own business, but also the market. Geographic Strategy: Measures how a vendor is approaching global opportunities and takes advantage of a global marketplace. Sales Strategy and Vertical/Industry Strategy: Were not ranked, given the maturity and horizontal nature of the market (see Table 2). Table 2. Completeness of Vision Evaluation Criteria Evaluation Criteria Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Business Model Vertical/Industry Strategy Innovation Geographic Strategy Source: Gartner (April 2009) Weighting no rating no rating low Leaders A leader has demonstrated a sustained ability to meet the changing needs for mainstream LAN switching architectures. A leader also has an ability to shape the market and maintain strong relationships with its channels and customers. Challengers A challenger has demonstrated sustained execution in the marketplace, and has clear, long-term viability in the market, but has not shown the ability to shape and transform the market. Visionaries A visionary has demonstrated an ability to increase features in its offering, to provide a unique and differentiated approach to the market. A visionary has innovated in one or more of the key areas of campus LAN technologies (such as convergence, security, data center and operational efficiency). Publication Date: 30 April 2009/ID Number: G Page 7 of 14

8 Niche Players A niche player has a complete or near-complete product offering, but does not have strong go-tomarket capabilities or innovation in its product offering. A niche player still has a viable product offering, and, in some cases, will be an appropriate choice for large infrastructure deals. Vendor and Cautions 3Com 3Com has a completely rejuvenated product offering from workgroup switching and WLAN through to high-capacity core switches. It also has a very large, low-cost R&D workforce based in China. 3Com has growing market share in China and other emerging markets. H3C has strong large enterprise reference accounts, including three of the largest global banks. This has led to a much stronger corporate position, with increasing profits and stronger margins. A China out strategy focusing on using cost-effective solutions emerging from H3C s China stronghold is more likely to be effective during a down economy. Cautions Until recently, 3Com and H3C were clearly run as two separate companies, despite 3Com s ownership position. Recent organizational changes are integrating the strategy, which should ultimately benefit the company. The 3Com brand in the developed world is still a major detriment. 3Com has had little enterprise market penetration in North America and Europe, the Middle East and Africa (EMEA), although recent investments and customer wins in EMEA may indicate the start of a turnaround. Taking products primarily developed for the Chinese market to a global customer base remains difficult. Building stronger support processes, improving documentation and focusing on solutions for a broader market all need work for the China-out strategy to be effective. Alcatel-Lucent A solid product strategy and focus on geographic strength in EMEA has allowed Alcatel- Lucent to grow revenue and market share during the past two years. During the past two years, Alcatel-Lucent has had the highest port shipment growth rate and second highest (after HP ProCurve) revenue growth. New industrial (OmniSwitch 6855) and small or midsize business (SMB) market solutions (OmniSwitch 6400) expand the market footprint for increased sales and marketing resources. OmniSwitch 9000 modules extend the chassis to 10GbE for data centers. Publication Date: 30 April 2009/ID Number: G Page 8 of 14

9 Cautions Alcatel-Lucent has made progress in market share, but continues to be a small player in the enterprise data market. The company needs greater investment in R&D to keep pace with innovations in data center and wireless, as well as greater investments in sales and marketing to accelerate growth to become more broadly relevant. Better known for its European presence, Alcatel-Lucent continues to have limited exposure in North America. The company s OEM WLAN strategy through Aruba Networks and its limited integration with the OmniVista platform for discovery and network management remains an overlay solution. Brocade Overall, we are pleased with the progress of integration plans for Brocade and Foundry Networks, and how the two organizations are leveraging their respective assets. Foundry lost momentum during 2008, due to its U.S.-centric and data-center-centric sales focus, where both areas were constrained due to economic conditions and market transitions, and in the latter part of 2008, during the acquisition process by Brocade. We must see market evidence that the integration is successful and that Brocade is regaining market momentum before restoring Foundry's previous position on the Magic Quadrant. The additions to the workgroup switch line, as well as a stackable switch offering, have given Foundry a solid core-to-edge offering. Converging server and storage solutions into a unified network continues to add unique differentiation, and enhances the Brocade (Foundry) advanced data center vision. Customer support remains a longstanding strength, and should be enhanced with Brocade's greater geographic reach. Brocade brings much stronger distribution partnerships and marketing to the Foundry product line. Cautions Cisco During late 2008, Foundry Networks was acquired by Brocade, and the transition appears to have affected Foundry; we saw a loss of momentum and market share during the protracted acquisition process. IronView Network Manager shows an integrated view of wired and wireless offerings, but lacks functionality that adds to the capabilities of its OEM partners. Cisco maintains the broadest portfolio of LAN switching and WLAN solutions in the market. Publication Date: 30 April 2009/ID Number: G Page 9 of 14

10 In an attempt to reduce the premium price of many of its solutions, Cisco has introduced a third software option (LAN-based) for some low-end products in its switching portfolio, and new bundled pricing for the Catalyst 4500 family. For these to be effective, enterprises should insist that Cisco include the new bundled solutions and associated pricing in applicable solutions. Cisco is a fast follower in attacking networking-related green IT issues; however, with the recently announced EnergyWise solutions, Cisco is broadening the role of networking in green initiatives. Cisco s introduction of the Nexus product offering has introduced an awareness of the unique requirements for emerging data center connectivity. Cautions Cisco is still the high-priced vendor, especially for workgroup switching requirements. In most cases where we see competitive pricing, Cisco pricing will range from one and a half times to twice the price of an alternative offering at the workgroup. Enterprises should ask for these new bundled solutions and pricing when dealing with Cisco. We are hearing increasing concerns about Cisco s presales organization taking customers for granted, and not providing expected levels of service, especially for customers that have not endorsed an end-to-end Cisco solution. Cisco is facing significant churn in top end channels as it continues to encroach into competitive areas against former channels (and integration partners) such as HP (with EDS) and IBM. Cisco s new data center Nexus portfolio still needs much development before it can be considered a mainstream solution. Enterasys/Siemens This vendor offers a full complement of products from the data center to the access layer, including chassis and stackable components. The integration with Siemens Enterprise Communications wireless components provide Enterasys with a strong, integrated wired and wireless solution. A tightly integrated security message and solution makes this vendor a good candidate in its target markets where security is a priority buying point. Customer feedback continues to highlight customer support and service as a differentiator. Cautions Enterasys continues to have a small market footprint and limited geographical coverage. Being combined with Siemens has the potential for longer-term leverage; however, in 2009, we do not expect much of an impact as the company works through integration issues. Publication Date: 30 April 2009/ID Number: G Page 10 of 14

11 Despite product coverage, this vendor currently has a limited distribution channel, and marketing has been weak due to an unwillingness to promote a brand that was likely to change (as is expected with the new combined company). Extreme Networks Extreme Networks continued to broaden its XOS-based switch line during 2008 by introducing low- and high-end products to fill in portfolio for smaller sites and data center requirements. Extreme s policy-based configuration and open architecture pioneered many of the "green" networking capabilities that are increasingly important in the enterprise. Cautions Extreme is struggling to maintain revenue and market share position in the market. As one of the smallest vendors in the market, it is increasingly difficult to compete against other alternatives. Ongoing support issues have impacted Extreme s ability to take advantage of some of its installed base. The recent addition of an executive position to focus on software development and quality is a good move to improve this issue. HP ProCurve HP ProCurve has been the fastest growing LAN switching player during the past two years. In client discussions where companies are looking at a shortlist of vendors, HP ProCurve is the most-asked-about vendor (after Cisco). The integration of ProCurve into HP s Technology Solutions Group (TSG) division gives ProCurve direct access to HP s enterprise sales force and, for the first time, integration into larger HP solution alternatives. Lifetime hardware warranties, software upgrades and business day telephone support ensures that HP s longer-term maintenance costs are the lowest in the industry. Integration of the Colubris Networks WLAN products has been progressing well on software and hardware fronts. Cautions HP currently lacks high-end core switching capabilities (especially with Layer 3 routing protocols), and must develop a more comprehensive feature set to take advantage of increasing enterprise opportunities. HP still needs to expand its channel capabilities to deal with larger opportunities. The past two years have seen organic improvement using HP Services and now EDS; however, we feel that ProCurve must develop other global-class alternatives for its customers. The acquisition of Colubris, while a good business decision by HP, represents a disruption for current ProCurve WLAN customers. Publication Date: 30 April 2009/ID Number: G Page 11 of 14

12 Nortel Nortel has an Improved stackable switching line with the ESR 5600 family. A large installed base of voice and data solutions has allowed Nortel to maintain a reasonably strong revenue stream until fourth-quarter 2008, and remain the No. 4 player in the market, based on revenue, behind Cisco, HP and 3Com. Improved marketing communication in early 2008, such as with the creation of an Energy Efficiency Calculator, generated increased interest in Nortel products. Cautions Nortel s current financial position makes it extremely difficult to compete for new business in a market where there are so many other viable alternatives. Significant market share loss and declining revenue is to be expected while Nortel remains in bankruptcy protection, and it is difficult to assess at this time how Nortel will emerge from these proceedings. The lack of a new core switching platform to deliver higher-capacity requirements for enterprise core and data center markets further impacts Nortel s ability to sell broader solutions. There is confusion over Nortel s WLAN portfolio and lack of integration with its wired LAN offerings. RECOMMENDED READING "Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market" "Toolkit Tactical Guideline: New Enterprise Network Useful Life Recommendations" Vendors Added or Dropped We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor. Evaluation Criteria Definitions Ability to Execute Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills and others, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria. Publication Date: 30 April 2009/ID Number: G Page 12 of 14

13 Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products. Sales Execution/Pricing: The vendor s capabilities in all pre-sales activities and the structure that supports them. This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities. Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and others. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision. Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the Web site, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements. Business Model: The soundness and logic of the vendor's underlying business proposition. Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals. Publication Date: 30 April 2009/ID Number: G Page 13 of 14

14 Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market. REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 30 April 2009/ID Number: G Page 14 of 14