IDC MarketScape: Western Europe Network Virtualization Solutions 2013 Vendor AssessmentEnter the sponsors here

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1 Capabilities IDC Excerpt IDC MarketScape: Western Europe Network Virtualization Solutions 2013 Vendor AssessmentEnter the sponsors here Chris Barnard April 2014 Lionel Lamy IN THIS EXCERPT The content for this IDC Excerpt was taken directly from IDC MarketScape: Western Europe Network Virtualization Solutions 2013 Vendor Assessment (IDC #PM06V). All or parts of the following sections are included in this excerpt: IDC Opinion, IDC MarketScape Vendor Inclusion Criteria, Essential Guidance, Vendor Summary Profile, Appendix, and Learn More. FIGURE 1 IDC MarketScape Western Europe Network Virtualization Solutions 2013 Vendor Assessment IDC MarketScape Western Europe Network Virtualization Solutions Leaders HP Accenture IBM Major Players Cisco Logicalis Dimension Data Juniper VMware Contenders Huawei Participants Strategies Please see the Appendix for detailed methodology, market definition, and scoring criteria. Source: IDC, 2014 April 2014, Excerpt of IDC #PM06V

2 IDC OPINION This IDC MarketScape Western Europe Network Virtualization Solutions 2013 Vendor Analysis resulted from a very simple question: in a world seemingly awash with new developments around network virtualization and/or software-defined networking (SDN) technologies, which vendors can enterprises in Europe (EMEA) turn to for strategic advice, consulting, and integration services? This study does not aim to make any statements about the state of network virtualization and/or software-defined networking technologies, nor about vendor positioning and strategies on a narrow technology level. Instead, the focus is squarely on the professional services around these technologies. Although it is clearly a nascent market, we see huge growth opportunities, and we believe it has the potential to disrupt the vendor landscape in the next couple of years. There is a broad range of market dynamics: Network virtualization and SDN enable a new way of looking at networking. The potential impact of the technology necessitates additional and in-depth professional services because SDN enables communications infrastructure to become software programmable and brings the principles of cloud computing to the network. ICT infrastructure in the enterprise is evolving toward heavily virtualized environments and cloud usage. Thus, network architecture has to change accordingly to become highly flexible, virtualized, and cloud adaptable, as well as enable high flexibility and ease of network management. The accepted network-related professional services model which evolved since the mid-1980s into a widely accepted template of a layer of consulting and integration, managed and maintenance services will no longer be adequate to support enterprise IT organizations faced with one of their toughest challenges in many years. Related to the above, SDN enables cost reduction and faster services introduction. SDN offers the potential to cut costs as it increases the ability to create new applications and services, enable virtualization, and share networks. Thus, current operational costs and future capacity requirements can be reduced. In addition, enterprise IT can roll out services more quickly as it transforms from a cost center into an enterprise service provider. Clearly, these technologydriven potential advantages have a lot of upsides, but they also take the enterprise into new, uncharted territory. We believe there will be a significant need for a third party to act as a trusted advisor for these strategic and operational issues. There are migration complexity and security concerns. The migration from a traditional architecture to an SDN-oriented structure is complex, takes time, and should not be underestimated. There is also an industry fear that introducing software-defined control planes opens up networks to greater risk. This too requires additional consulting and integration efforts. Network virtualization and SDN are not mature yet. SDN is new, so vendors are still working on standards and interoperability. Any immediate rush to SDN would involve a degree of risk, although leading-edge enterprises are keen to explore it. Ultimately, it is about vision and here external parties can play a key role as well. This study will examine the vendors in the network virtualization solutions market, how well they are able to respond to market changes, and how these changes will impact vendors' ability to provide solutions to end users. With these points in mind, it is not surprising that the qualities that will define the market share winners of the next few years are not necessarily the ones that brought success to today's leaders. This study identifies several key areas of market opportunity that lead to criteria by which vendors can be judged now and in the next three to five years: 2014 IDC Excerpt of IDC #PM06V 2

3 Whether network virtualization or SDN solutions are core to their portfolios, forming a key part (foundation) of a next-generation services approach, or seen as simply an add-on to current network-related services. The amount of resources being channeled to this side of the business. This requires a new way of thinking about the network and its role in the enterprise, thus significant investment on new technologies, methodologies, and certifications. Finally, whether the vendor is wedded to a specific technology or able to advise, consult, and integrate across multiple (competing) views. IDC MARKETSCAPE VENDOR INCLUSION CRITERIA Geographic scope. To take part in this study, the vendor must be present in a minimum of three countries within Western Europe where it has capabilities around network virtualization solutions. Overall services focus and capabilities. To take part, services must form a core part of the vendor's overall company offering. Network services focus. Networking solutions which include services and technology must be a significant element of the vendor's services portfolio (>25%). Datacenter services focus. In addition to a network solutions focus, datacenter services must be a key element of the vendor's services portfolio (>10%). Virtualization accreditation. Finally, if the vendor is not a virtualization technology provider, it must have the right partnership in place today with the relevant network virtualization technology supplier(s). ESSENTIAL BUYER GUIDANCE This IDC MarketScape recommends that buyers look very closely at the following: Does the vendor have a very close focus on network virtualization/sdn (i.e., are they specialists in this area)? This could include aspects such as the number of resources, certifications, etc., and whether this is a small cog in a large organization, or front and center. To what extent is the vendor firmly in one of the SDN "ideological camps"? In 2013, we've seen industry heavyweights lining up with different approaches based on aspects such as installed base or need to disrupt and size of investments/acquisitions. Is your enterprise happy to be aligned with one of the camps? If so, then it could be beneficial to engage with a services company associated with such an approach. However, if your enterprise is looking for a wider view, then it makes sense to look for a provider that is comfortable playing across several streams. Can the vendor advise/consult not only on technology issues, but also on the related business elements affected by the move to SDN? Unlike traditional enterprise networking, SDN can be truly transformational, also in terms of enabling the enterprise IT organization to roll out new services. Will the vendor be a trusted advisor to the enterprise as it moves down the road toward SDN? Related to point #3, SDN is not about a short and discrete project, but part of a wider, enterprise (IT) transformation. To what extent can a vendor step up and be a trusted advisor in the long run? 2014 IDC Excerpt of IDC #PM06V 3

4 VENDOR SUMMARY PROFILES This section briefly explains IDC's key observations resulting in a vendor's position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of one vendor's strengths and opportunities. Logicalis Logicalis is a global systems integrator with a strong focus on networking solutions. Although smaller in size compared with the other vendors in this study, Logicalis impressed us with its dynamism, early commitment, and vision within the network virtualization market. IDC positioned Logicalis as a contender in this IDC MarketScape. Logicalis' current offering is broadly in line with other top vendors. Its sales and distribution capabilities were also on par with others. However, what let Logicalis down in the evaluation and therefore within the IDC MarketScape chart is its brand awareness given its smaller size. It can innovate in terms of services, but Logicalis depends on technology innovation from key networking partners such as Cisco. Strengths and Opportunities Logicalis will offer a credible alternative not only to technology-focused players such as VMware, Juniper, and Cisco, but will also differ from companies such as HP, IBM, and Accenture. As such, it has its own niche within the competitive landscape. Its size and focus puts Logicalis in a good position to be a trusted technology and business advisor for network virtualization, especially to companies that feel technology vendors do not understand their business processes and that the larger systems integrators are too big to care. We felt Logicalis could do more in current R&D investment, although this is not a notable weakness but more a reflection of the company's size. There is little Logicalis can do about it until the market reaches ignition point and warrants large R&D investments from all vendors. Particularly impressive was Logicalis' integration of network virtualization within its future portfolio. It is a specialist in services, and it sees virtualization as a key plank necessary within its entire portfolio. APPENDIX Reading an IDC MarketScape Graph For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies. Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market. Positioning on the x-axis, or strategies axis, indicates how well the vendor's future strategy aligns with what customers will require in three to five years. The strategies category focuses on high-level decisions and underlying assumptions about offerings, customer segments, and business and go-tomarket plans for the next three to five years IDC Excerpt of IDC #PM06V 4

5 The size of the individual vendor bubble markers in the IDC MarketScape represents the market share of each individual vendor within the specific market segment being assessed. IDC MarketScape Methodology IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, and the input of a review board of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information, and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior, and capability. Market Definition Participants in this IDC MarketScape were judged on the extensive criteria listed in the two tables in the Strategies and Capabilities Criteria section. The criteria included IDC's subjective analysis of the vendors' future strategies as well as their current portfolio or capabilities. IDC assembled the most important criteria for success for maximizing current market opportunities while leveraging the vendors' strengths for the future. LEARN MORE Related Research SDNs: Friend or Foe to the Service Provider? (IDC #PM54V, July 2013) European Enterprise Survey 2013: Buyers' Attitude Toward Network Services (IDC #PM04V, May 2013) Western Europe Network Life-Cycle Services 2012 Market and Forecast (IDC #PM03V, April 2013) EMEA Network Life-Cycle Services: Market Analysis Perspective (IDC #PM59U, January 2013) IDC Predictions: EMEA Network Life-Cycle Services in 2013 (IDC #PM51V, January 2013) Synopsis This IDC MarketScape provides an assessment of a number of vendors participating in the Western European network virtualization solutions market. It does not aim to make any statements about the state of network virtualization technologies it focuses squarely on the professional services aspects. Although IDC sees the network virtualization solutions market as a nascent one, we anticipate huge growth opportunities and believe that it has the potential to disrupt the vendor landscape in the next couple of years. "Network virtualization and SDN enable a new way of looking at networking. The potential impact of the technology necessitates additional and in-depth professional services because SDN enables communications infrastructure to become software-programmable and brings the principles of cloud 2014 IDC Excerpt of IDC #PM06V 5

6 computing to the network," said Lionel Lamy, associate vice president, EMEA Enterprise Systems and Network Life-Cycle Services, IDC. "Network virtualization and SDN are not mature yet. SDN is new, so vendors are still working on standards and interoperability. Any immediate rush to SDN would involve a degree of risk, although leading-edge enterprises are keen to explore it. Ultimately, it is about vision, and here external parties such as the nine vendors profiled in this study can play a key role," said Chris Barnard, associate vice president, EMEA Telco and Networking, IDC IDC Excerpt of IDC #PM06V 6

7 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 48 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. IDC U.K. Chiswick Tower 389 Chiswick High Road London W4 4AE, United Kingdom idc-insights-community.com Copyright Notice This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2014 IDC. Reproduction is forbidden unless authorized. All rights reserved.