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This comprehensive 874-page report profiles, compares and assesses 37 key providers of international business networking and related services.

The report includes the following:

 Detailed profiles of 37 leading IB2B service providers:  Verdict on strategy and performance  Geographical coverage and reach  Product/service portfolio details and availability  Target customer types (segments/verticals) and market positioning  Revenue, organizational and management information

Who should buy the report?

 Providers of IB2B services, their customer and suppliers  Strategy/business development and marketing teams, and product managers of IB2B service providers

Key benefits:

 Source of key information on 37 service providers  Independent, insightful and informed market analysis and comparisons  Enables customers to focus on implications and formulate action plans

Key conclusions:

 The creative destruction of the ICT market is now seeing the likes of IBM, Amazon and Orange competing with each other in IB2B;  The IB2B market being created by ICT convergence is vast, but highly competitive and unlikely to add up to the sum of its component parts;  Those analysts and service providers that think it is still a two- dimensional market for premium solutions are living in the last century – there are thousands of enterprises and organizations active globally;  Service providers need to develop and articulate a customer and marketing strategy within the context of the evolving market to be credible – it is no good if it only exists in a collective corporate psyche;  There is no ‘correct’ generic strategy, but any player with a generic portfolio mindset and without a laser focus on customers will struggle;  Challenges are as much about organization and culture as technology.

Pricing is £1,995 for a corporate licence (intranet licence). benchmark-it performance benchmark-it.co.uk Summary & Sample  benchmark-it.co.uk. All rights reserved. For reproduction rights contact [email protected]. Opinions reflect judgement at the time and are subject to change. benchmark-it.co.uk

benchmark-it performance

International Business-to- Business Services

March 2015

Author: Rob Pritchard benchmark-it performance benchmark-it.co.uk Summary & Sample  benchmark-it.co.uk. All rights reserved. For reproduction rights contact [email protected]. Opinions reflect judgement at the time and are subject to change. benchmark-it.co.uk

TABLE OF CONTENTS

Executive Summary Page 3 Market Analysis Page 4 Benchmarked Suppliers Page 11

Supplier Profiles:

AT&T Page 29 BT Global Services Page 70 CenturyLink Page 131 Cogent Communications Page 149 Colt Page 160 Dimension Data Page 197 Easynet Global Services Page 214 Global Cloud Xchange (formerly Reliance Globalcom) Page 229 Global Switch Page 254 GTS Central Europe Page 261 GTT Page 282 Hibernia Networks Page 291 IBM Global Services Page 303 Interoute Page 325 iPass Page 346 KDDI Page 354 KPN International Page 369 Level 3 Page 386 Masergy Page 411 NTT Com Page 427 Orange Business Services Page 454 Pacnet Page 499 PCCW Global Page 520 SingTel Page 541 Sprint Page 566 Tata Communications Page 581 Telecity Page 613 Telecom Italia Sparkle Page 626 Telefónica Global Solutions Page 648 TeliaSonera International Carrier Page 680 Telstra Global Page 695 T-Systems Page 734 Verizon Enterprise Solutions Page 776 Viatel Page 807 Virtela Page 820 Vodafone Global Enterprise Page 834 Zayo Page 864

benchmark-it performance benchmark-it.co.uk Summary & Sample  benchmark-it.co.uk. All rights reserved. For reproduction rights contact [email protected]. Opinions reflect judgement at the time and are subject to change. benchmark-it.co.uk

Executive Summary

Despite geopolitical challenges and continued economic uncertainty, the world of commerce continues to globalize. This has helped to foster the development of IB2B ICT service providers at a time when the evolution of technology is witnessing the convergence of previously distinct sectors – today, the likes of IBM, Amazon and Orange are competing for the same customers.

The combined market that is being created by the convergence of ICT is vast, but it is highly competitive and unlikely to equate to the sum of its component parts. For service providers to succeed, they need to identify what they intend to offer and to which customers. This sounds simple, but not many actually have such an articulated customer strategy – even while having detailed CSR, HR and IR strategies.

Not only is the world changing from the supply side. Demand is evolving too. Some service providers and analysts still live in the last century, identifying just two or three thousand target MNCs, all of whom want the full spectrum of available services to every location on the planet and willing to pay a premium price for the privilege. Today, there are tens of thousands of multinational companies, with more and more based in ‘new’ locations, targeting niche global markets or challenging the established ways of doing business as the global economy opens up.

The complexity of the market can be baffling, which is why an articulate customer and marketing strategy is vital – the opportunity is huge but a wide and still growing group of service providers is looking for a piece of the action. This means that highly complex organizations with multifarious networks, systems and processes need to be agile enough to adapt to changing customer needs whilst still providing reliable service. This is no trivial challenge and provides an advantage to smaller competitors that can generally make decisions and react to customers more quickly. On the other hand, in such confusing times there is a natural tendency to entrust the vital lifeblood that is an organization’s ICT to a known, established and dependable service provider.

The embodiment of this challenge is the shift to cloud-based services and, increasingly, to hybrid cloud ecosystems that mix and match best-of-breed (in terms of price, service, functionality, location, etc.) providers for each set of data, applications and services an enterprise needs. At the same time that there is a demand for access to corporate resources ‘any time, any place, anywhere,’ there is also the need to manage these resources in a secure environment, as well as to flex them up and down, turn them on and off, or share them with third parties as required.

In this confusing world, there is no generic right or wrong answer as to how to address the market. The issue may be, however, that for some companies with a mindset of generic services, a lack of laser customer focus will lead to a lack of market success.

The ICT market has always been characterized by disruption and creative destruction – this latest set of changes will not happen over night, but they will be seismic over time. benchmark-it performance benchmark-it.co.uk Summary & Sample  benchmark-it.co.uk. All rights reserved. For reproduction rights contact [email protected]. Opinions reflect judgement at the time and are subject to change. benchmark-it.co.uk

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Market Analysis

The market for IB2B services continues to become more competitive across all regions of the world as service providers strive both to reach all the geographies required by their customers and to serve the full spectrum of their needs in terms of products and services. The fundamental driver for the IB2B market and its evolution is the fact that trade (and life in general) is globalizing, and markets around the world continue to open up to the free trade of products and, increasingly, of services.

Market Sizing:

There is no definitive size to the IB2B market as virtually all players articulate their target markets differently and customers range from the largest MNCs (defined as operating in more than one country outside its own domestic market) to small businesses operating on an international scale. The market also encompasses (fixed and mobile) network and IT services, as well as a growing range of software applications, systems integration activities and professional/consultative services.

Nevertheless, a few key facts and statistics can be established to give an indication of how the market is developing and thus driving demand:

 In the mid 1980s, the average US-based MNC generated 15% of their annual revenues from operations outside the USA;  Today, the average US-based MNC generates about 45% of revenues from outside the USA;  It is widely estimated that there are over 85,000 MNCs worldwide, with over 20,000 of them headquartered in the USA;  Other national markets that tend to have a disproportionate number of MNCs tend to be characterized by their openness (e.g. UK, Netherlands), expertise in exploiting advanced technology (e.g. Germany, Japan) or national sector champions (e.g. France, Switzerland);  The most dynamic markets (e.g. ICT, media) see the fastest rise of new MNCs, notably through new players that establish dominance in their target market – obvious examples include Google, Amazon, Facebook, Weibo and Alibaba, although Apple proves that there can yet be new life breathed into once faded leaders;  The MNC ‘middle market’ is the fastest growing segment expanding internationally;  Putative international trade agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) look set further to liberalize markets and drive on-going growth in international business;  The largest combined economic area (the European Union) looks set to extend open markets for goods also to a growing set of services;

SAMPLE PAGE Benchmarked Suppliers

Name: BT Global Services Customer Focus: MNCs, Carriers Positioning: Global networking and IT services provider Presence North America Latin America Europe MEA Asia Pacific Key cities Growing Strong Growing Growing Portfolio Fixed Networking Mobile/Mobility IT/Cloud Services Yes Yes (access) Yes

Verdict: BT Global Services offers perhaps the best balance of the major players in terms of global reach, with a strong and growing presence across Europe, Asia Pacific and Latin America, although it lacks the substantial on-the-ground presence of rivals in the key US market. In addition to its good global reach and in-country depth across Western Europe, BT also has the best articulated portfolio of major players, let down only by its mobile/mobility credibility (but no player has a credible global mobile presence). Having less deep pockets at a corporate level than the other ‘Big Four’ players has not proven an issue to date and on-going global network extension and recruitment, especially in pro services, are signs that BT aims to maintain its leading position as a global service provider.

Name: CenturyLink Customer Focus: Corporates, Wholesale Positioning: Managed hosting and co-location specialist Presence North America Latin America Europe MEA Asia Pacific Key cities Little Some N/A Some Portfolio Fixed Networking Mobile/Mobility IT/Cloud Services Yes No Yes

Verdict: CenturyLink has now assimilated Savvis and is continuing to make ‘bolt-on’ acquisitions to expand its portfolio in the cloud/hosting market, whilst also investing in organic expansion of its data centre estate. Still largely focused on the US market, CenturyLink has a strong niche position in the IB2B market, but cannot compete at the same level of the leading US service providers outside of its niche.

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IBM Global Services

Verdict: IBM is focused on the cloud as its future, but the journey there is proving harder and longer than at first thought. IBM has invested substantial amounts both organically and in acquisitions, only to fall short of its cloud revenue target. On the face of it, the strategy is sound and IBM has signed up an impressive list of partners to complement its M&A strategy, but ‘Big Blue’ looks like ‘Too Big Blue’ and is finding the transition difficult – perhaps this is a temporary blip, with the sophistication and complexity of IBM’s solutions resulting in a longer sales process when compared with smaller, more transactional competitors. Recent traction will have to be proved to be the start of a sustainable trend if IBM is not to end up having the right market model, but the wrong market delivery approach.

Summary

IBM describes its Global Services operations as follows: “Global Services is a critical component of the company’s strategy of providing IT infrastructure and business insight and solutions to clients. While solutions often include industry-leading IBM software and systems, other suppliers’ products are also used if a client solution requires it. Approximately 60 per cent of external Global Services revenue is annuity- based, coming primarily from outsourcing, maintenance and application management services arrangements. Within Global Services there are two reportable segments: Global Technology Services and Global Business Services.

Global Technology Services primarily provides IT infrastructure services and business process services, delivering business value through the company’s global scale, standardization and automation.

Global Business Services primarily provides professional services and application management services, delivering business value and innovation to clients through solutions which leverage industry and business process expertise while integrating the industry-leading portfolio of IBM and strategic partners, to define the upper end of client-valued services.”

“Businesses today are undertaking digital transformations, rethinking what customers value most and creating operating models that take advantage of what’s newly possible for competitive differentiation. The challenge for business is how fast and how far to go. Business leaders have long used information technology to improve productivity and efficiency, reach new markets and optimize supply chains. What’s new is that customer expectations have also changed.

How IBM can help – our business consulting practice brings together a powerful combination of functional and industry expertise required to take full advantage of the opportunity presented by digital transformation. Whether it is reshaping your business strategy, operating model or optimizing your entire supply chain, our experienced Strategy & Transformation consultants can help. In addition, our recently announced Smarter Commerce consulting practice provides access to a benchmark-it performance benchmark-it.co.uk Summary & Sample  benchmark-it.co.uk. All rights reserved. For reproduction rights contact [email protected]. Opinions reflect judgement at the time and are subject to change. benchmark-it.co.uk

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NTT Com

Verdict: NTT Com has evolved its global vision for the delivery of services with its Global Universal One and Global Management One offerings, looking to bundle networking and computing/applications as propositions and increasingly withdrawing networking services as distinct offerings. This strategy has been supported by an on- going willingness to invest in both organic and inorganic growth, with the notable acquisition of Virtela helping to position NTT as a leader in emerging SDN-based services. Challenges remain, however, most notably in resolving operational, organizational and portfolio overlaps, together with overlapping brands/channels to market. Nevertheless, NTT Com looks better placed today to challenge the established global players than it has to date.

Summary

Headquartered in Tokyo, NTT Communications (NTT Com) was founded in 1999 and is the wholly-owned long-distance and international communications and ICT solutions provider of Japan’s NTT (Nippon Telegraph and Telephone Corporation), one of the world’s largest telecoms companies.

“NTT provides consultancy, architecture, security and cloud services to optimize the information and communications technology (ICT) environments of enterprises. These offerings are backed by our worldwide infrastructure, including a leading Tier 1 IP network, the Arcstar Universal One VPN network reaching 196 countries/regions, and over 130 secure data centres worldwide. NTT Com’s solutions leverage the global resources of NTT Group companies including Dimension Data, NTT DOCOMO and NTT DATA. NTT Com has subsidiaries and offices in 123 cities in 43 countries/regions around the world, with 20,400 employees worldwide.”

“NTT Communications is becoming a global leader of ICT services under its Vision 2015 growth strategy, helping companies worldwide quickly to expand their global operations. At the same time, we work to strengthen our core competitive advantages in Asia and beyond. We also partner with residential customers, empowering them with advanced tools and applications for a new way of communication to leverage secure and convenient ICT services.

 Innovative: our innovative ICT services, including cloud computing, enable customers to succeed in this increasingly complex world. We anticipate both market trends and needs to develop innovative services ahead of the curve, giving our customers an important advantage;  Reliable - as a reliable global ICT partner, we provide high-quality services that earn the customer’s trust. Reliability is emphasized in everything we offer, including applications, services, operations and maintenance, backed by our robust global infrastructure of networks, data centres and much more;  Seamless - ICT services are provided on a seamless basis in markets worldwide, supported by the comprehensive standardization of our global operations as well as services. Customers promptly receive the consistent, benchmark-it performance benchmark-it.co.uk Summary & Sample  benchmark-it.co.uk. All rights reserved. For reproduction rights contact [email protected]. Opinions reflect judgement at the time and are subject to change. benchmark-it.co.uk

SAMPLE PAGE Geographic Reach:

Colt operates in 28 countries across Europe, Asia and the US with direct connections into 205 cities globally and metropolitan area networks in 47 cities. Colt has 83,000 kilometres of fibre route network (46km in Europe, 37km non-Europe network).

Colt owns and operates 22 carrier-neutral data centres in Europe and manages a further 7 in the Asia Pacific region. It also has agreements with other providers to offer ‘total European coverage.’

Colt offers direct-line connectivity to over 22,000 buildings in 47 major cities.

The image below illustrates Colt’s network:

Colt’s city fibre networks (and data centres) are in the following locations (with other Colt-connected cities in italics):

 Australia: o Sydney;  Austria: o Graz; o Innsbruck; o Klagenfurt; o Linz; o Salzburg; o St Polten; o Vienna;  Belgium: o Antwerp; o Brussels (1 data centre); benchmark-it performance benchmark-it.co.uk Summary & Sample  benchmark-it.co.uk. All rights reserved. For reproduction rights contact [email protected]. Opinions reflect judgement at the time and are subject to change. benchmark-it.co.uk

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Portfolio:

Enterprise Unified ICT:

 Computing: o Cloud Services: . Virtual Data Centre:  Scalable, fully automated IaaS (Infrastructure-as-a- Service) solution;  VDC offers on-demand computing, storage and applications;  Customers provision their service using an on-line Web portal;  Customers can connect using Interoute’s MPLS network, via the public Internet or using a combination of both;  Customers can choose where to keep their data in one of Interoute’s VDC zones: o Amsterdam; o Berlin; o Chicago (planned); o Frankfurt; o Geneva; o Hong Kong; o London (x3); o Los Angeles; o Madrid; o Milan; o New York; o Paris; o Singapore (planned);  No charge for moving data between VDC zones;  Within the VDC Virtual Machine environment, customers can create VLAN-segregated, DMZ-enabled, multi-tiered networks;  Interoute supports multiple hypervisors, enabling customers to migrate their existing cloud service and to avoid lock-in;  Each Virtual Machine can be customized in terms of: o CPU; o RAM; o Storage; o Back-up; o Disaster recovery;

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The chart below provides a comparison of Level 3’s Ethernet services:

 Managed Dedicated Fiber: o By owning or leasing the fibre, the customer keeps control of their optronics, with Level 3 deploying and providing on-going network monitoring and management, based on the customer’s specific requirements; o In cases where Level 3 does not have dark fibre available, it is ‘often willing’ to build it;  Managed IT and Hosting: o Management, maintenance and operation of both hardware and software; o Secure and reliable hosting solutions; o High-availability configurations; o Integrated IT and network solutions; o On-demand access to high-level technical personnel; o Provisioning of software associated with the service; o ITIL-compliant service management; o Deployment and management of all the necessary service tools; o Data back-up service; o Proactive monitoring of infrastructure hardware and software 24x7; o Managed Operating System and Managed Database (selected regions); o Managed Exchange and Managed SAP (selected regions); o Fully managed security services;  MPLS/IP VPN: o Can be accessed over Ethernet or TDM connections;

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Management

Revenue:

Tata Communications generated operating revenues of Rs196.2 billion ($3.24 billion) in its 2014 financial year, up 14% from FY2013’s Rs172.1 billion. FY2013 EBITDA was Rs30.4 billion (FY2012: Rs20.6bn).

The table below illustrates gross revenue contribution by segment for the past two years (financial year ended 31st March):

2013 2014 Global Voice Solutions 49.8% 48.7% Global Data Solutions 39.2% 40.3% South Africa Operations 11.0% 11.0% Others 0.1% 0.0% Total 100.0% 100.0%

In the financial year ended 31st March 2014, 67% of revenues came from Network Services (IPL, NPL, IRUs, and VPN services), with 33% coming from Managed Services (data centres, mobility, UC&C, enterprise vice and media services). The FY2013 ratio was 71%:29%. Revenues were split 50:50 between India and the rest of the world.

Management Team:

Tata Communications’ Managing Director and CEO is Vinod Kumar.

The company says it has employees in 80 cities across more than 40 countries. It had 7,885 employees worldwide in total as at 31st December 2014, of whom 83% were based in India.

Tata Communications is 48.9% owned by the Tata Group, with the Indian Government holding a 26.1% stake.

Reputation:

Tata Communications’ customer base includes more than 1,600 global carriers and service providers, 700 mobile operators, over 50,000 business customers (260 MNCs, 3,000 large corporates and 47,000 SMEs). The company claims that over 24% of the world’s Internet routes are on its network.

Tata’s stated target market for enterprise services outside of India is the top 2,500 multinational companies (those with more than $2 billion in annual revenue). In addition, Tata works with systems integrators and IT partners to serve some of its target large enterprises, as well as to serve mid-tier businesses.

SAMPLE PAGE Management

Revenue:

In its financial year ended 31st December 2013, Telecity generated revenues of £325.6 million (2012: £283.0 million), up 15.1% year on year. Adjusted EBITDA was £153.2 million (2012: £129.5 million). Over 90% of Telecity’s revenue is recurring. 2013 revenue per sold kW was £5,012 (2012: £4,997).

Telecity has given revenue guidance of between £355 million and £362 million for the current financial year.

2013 revenues from the UK amounted to £143.9 million (2012: £137.5 million), with adjusted EBITDA of £69.1 million (2012: £62.4 million). Revenues from the Rest of Europe were £181.6 million (2012: £145.5 million), with adjusted EBITDA of £84.1 million (20121: £67.1 million).

The table below illustrates KPIs at Telecity for 2013 (year ended 31st December):

UK Rest of Total Europe Available customer power (MW) 37.3 61.5 98.8 Sold power % 67.1 75.0 72.0 EBITA per sold kW 2,161 1,358 1,655

The table below illustrates KPIs at Telecity for 2012 (year ended 31st December):

UK Rest of Total Europe Available customer power (MW) 33.7 52.7 86.4 Sold power % 69.4 70.6 70.1 EBITA per sold kW 2,049 1,312 1,608

The chart below illustrates Telecity’s revenues by product line (% of spend of top 300 customers) for its 2013 financial year: