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Lisa Pierce Ryan Hudson Vice President Analyst

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  • 1. June 10, 2005. Call in at 12:55 p.m. Eastern Time Lisa Pierce Ryan Hudson Vice President Analyst Forrester Research, Inc. ForrTel: Results Of Forrester’s Business Technographics ® May 2005 Network And European Telecommunications Benchmark Study
  • 2. Agenda
    • Survey purpose and scope
    • Review of results
      • VPNs
      • Network security
      • VoIP
      • Wireless
    • Findings and recommendations
  • 3. Survey scope and purpose
    • Telephone survey to 652 US, 50 Canadian, and 305 European enterprises (enterprises have 1,000 or more employees)
    • Assess adoption rates of new telecommunications- and network-related technology and services
    • Understand migration rates from legacy to new services and technologies
    • Validate reasons for migration — and obstacles to it
  • 4. Key enterprise data take-aways
    • At a gross level, use of legacy data services will be flat in 2005
    • Adoption of IPSec VPNs, firewalls, and intrusion detection has reached maturation
    • Adoption of newer VPN and security technologies is significantly less pronounced
    • In many instances, customers have no plans to fully embrace new VPN and security technologies
  • 5. Projected 2005 enterprise frame relay and ATM spending levels “ How will your landline (non-IP) data equipment and services spending in 2005 change as compared with last year?” “ If your company uses Frame Relay or ATM, how do you expect the use to change in 2005?” Base: 652 US, 50 Canadian, and 305 European enterprises 18% 48% 27% 2% Significantly higher this year (10% increase or more) Somewhat higher (1%-9%) The same Somewhat lower (1%-9% decrease) Significantly lower (10% decrease or more) Source: Business Technographics® May 2005 And European Network And Telecommunications Benchmark Study Increase No change Decrease Other 0% 10% 20% 30% 40% 50% 9% 21% 49% 12% 5%
  • 6. 2005 enterprise VPN adoption “ At what stage is your company in the adoption of the following technology?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study Fully deployed/in production/upgrade underway Initial rollout underway Piloting Evaluating No plans 0% 20% 40% 60% 80% 100% MPLS VPN SSL VPN Site-to-site IPsec VPN Remote-access IPsec VPN
  • 7. 2005 enterprise network security adoption “ At what stage is your company in the adoption of the following technology?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 0% 20% 40% 60% 80% 100% Network quarantine Content security Intrusion detection Firewalls Fully deployed/in production/upgrade underway Initial rollout underway Piloting Evaluating No plans
  • 8. 2005 enterprise interest in managed VPN services “ What level of interest do you have in procuring this technology as a managed service?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 0% 20% 40% 60% 80% 100% MPLS VPN Remote-access IPsec VPN Site-to-site IPsec VPN SSL VPN Very interested Somewhat interested Not interested
  • 9. 2005 enterprise interest in managed security services “ What level of interest do you have in procuring this technology as a managed service?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 0% 20% 40% 60% 80% 100% Firewalls Intrusion detection Content security Network quarantine Very interested Somewhat interested Not interested
  • 10. Key voice take-aways
    • At a gross level, use of legacy voice services will be down slightly in 2005
    • Current and intended adoption of IP telephony and WAN VoIP is fairly lock-step, but a significant percent have not developed a VoIP/IPT infrastructure management plan
    • Adoption of IP videoconferencing and unified messaging has greater variation — with UM lagging behind IPT, VoIP, and IPV
    • In many instances, customers have no plans to fully embrace these new technologies
  • 11. Projected 2005 enterprise landline voice services spending levels “ How will your landline voice services spending in 2005 change as compared with last year?” “ In 2005, does your company plan any changes in the number of contact centers it directly operates?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 12% 66% 7% 2% Base: 652 US, 50 Canadian, and 305 European enterprises We plan to increase the number No change We plan to decrease the number We plan to outsource/offshore contact center 6% 14% 53% 18% 7% 0% 20% 40% 60% Significantly higher this year (10% increase or more) Somewhat higher (1%-9%) The same Somewhat lower (1%-9% decrease) Significantly lower (10% decrease or more)
  • 12. 2005 enterprise VoIP/IP video/UM adoption “ At what stage is your company in the adoption of the following technology?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 0% 20% 40% 60% 80% 100% Unified messaging (UM) Site-to-site VoIP IP telephony IP videoconferencing Fully deployed/in production/upgrade underway Initial rollout underway Piloting Evaluating No plans
  • 13. Preferred enterprise IP telephony system suppliers and network management plans “ From whom do/will you procure your IP telephony system?” “ How will your company monitor the VoIP systems and services it acquires?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study Base: 652 US, 50 Canadian, and 305 European enterprises (multiple responses accepted 26% 42% 70% 30% 7% 7% Train internal staff on VoIP and provide staff with necessary tools Hire full-time staff with the expertise Hire outside consultants on a temporary basis Buy outsourced or managed services Don’t know No plans for LAN-WAN VoIP training or system improvements 51% 62% 24% 30% Your current primary voice system vendor Your current primary data system provider An alternate voice system vendor An alternate data system vendor
  • 14. 2005 enterprise interest in managed VoIP services “ What level of interest do you have in procuring this technology as a managed service?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 0% 20% 40% 60% 80% 100% IP videoconferencing Site-to-site VoIP IP telephony Unified messaging Very interested Somewhat interested Not interested
  • 15. Key enterprise wireless take-aways
    • Centralized management of mobile services and devices is now the de-facto standard, but that doesn’t necessarily mean that enterprises have embraced corporate-liable contracts
    • Enterprises are beginning to rely solely on mobile (vs. landline) voice
    • Current and intended adoption of IP telephony and WAN VoIP is fairly lock-step
    • Adoption of wireless data technologies, services, and applications has been rapid
    • There is strong interest in seamless WLAN/2G products and services
  • 16. Enterprise management of mobile services and devices: Centralization is no longer the exception “ Does you company centralize planning, procurement, and management for mobile services and devices?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study Base: 652 US, 50 Canadian, and 305 European enterprises 8% 8% 10% 73% Centralize both mobile voice and mobile data services Centralize only mobile voice service Centralize only mobile data service Centralize neither mobile voice nor mobile data services
  • 17. The enterprise mobile workforce in 2005 “ What percentage of your company’s workforce will use mobile applications?” “ In 2005, what percentage of your company’s voice traffic will use mobile voice services instead of landlines?” Percentage using mobile applications: Mean 22% Percentage using mobile voice: Mean 17% “ What percentage of your company’s local- or toll-access landlines has been disconnected?” Percentage using mobile voice: Mean 4% Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study
  • 18. 2005 enterprise network WLAN and 2.5/3G adoption “ At what stage is your company in the adoption of the following technology?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 0% 20% 40% 60% 80% 100% Mobile data Wireless LAN hotspots Fully deployed/in production/upgrade underway Initial rollout underway Piloting Evaluating No plans
  • 19. Enterprise adoption of general business mobile applications “ At what stage is your company in the adoption of the following technology?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study 0% 20% 40% 60% 80% 100% Wireless email or Blackberry SMS alerts Sales force applications Personalized contacts and calendar Mobile VPN Logistics applications Intranet Instant messaging Field service applications Customer-facing applications Content/information for employees Fully deployed/ in production/ upgrade underway Initial rollout underway Piloting Evaluating No plans
  • 20. Enterprise adoption of WLAN/2G phones in 2005 “ At what stage is your company in the adoption of phones that use both cellular and WLAN connectivity?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study Base: 652 US, 50 Canadian, and 305 European enterprises 0% 20% 40% 60% 80% 100% 37% 11% 6% 5% 41% Evaluating Piloting Initial rollout underway Fully deployed/in production Upgrade underway No plans
  • 21. Key enterprise migration factors to new technology
    • New network technology evaluation criteria and obstacles: Reliability, manageability, and security often cited as chief concerns
    • Managed telecommunications services rationale and obstacles: Culture and competency are strong predictors of adoption
    • Effect of M&As on new technology adoption: Enterprises say one thing, but are planning another
  • 22. Enterprise network evaluation criteria and obstacles “ What is the most important factor you consider while acquiring the following technologies? What is the largest obstacle to implementing the following technologies?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study VPNs Purchase criteria rank Implementation obstacle Security Purchase criteria rank Implementation obstacle Voice- and video-over IP Purchase criteria rank Implementation obstacle Wireless technology Purchase criteria rank Implementation obstacle Reliability Manageability Cost Availability Scalability Compatibility Security 30% 6% 12% 5% 5% 3% 38% 14% 18% 22% 5% 6% 9% 18% Reliability Manageability Cost Availability Scalability Compatibility Security 36% 10% 10% 4% 4% 2% 34% 18% 19% 31% 3% 3% 8% 12% Reliability Manageability Cost Availability Scalability Compatibility Security 42% 7% 24% 4% 6% 4% 7% 28% 11% 31% 3% 7% 5% 6% Reliability Manageability Cost Availability Scalability Compatibility Security 28% 4% 13% 6% 4% 3% 39% 16% 9% 19% 6% 4% 4% 35%
  • 23. The most important factors and obstacles in using managed telecommunications services “ The reason why we would choose to use managed telecommunications services is . . . ? Why we would never purchase managed telecommunications services is . . . ?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study Our company prefers to outsource It simplifies our operations Better quality and reliability Cost savings We lack in-house expertise, or can’t spare the resources It mitigates the risk of technology change We would never use managed telecom services Purchase criteria rank Our firm’s culture is against outsourcing Too expensive Loss of control Already have the hardware and expertise in-house We do not trust the service providers Implementation obstacle Base: 652 US, 50 Canadian, and 305 European enterprises 19% 55% 41% 55% 46% 37% 23% 24% 33% 46% 76% 21%
  • 24. The effect of provider mergers and acquisitions on the use of new network technology “ How do mergers and acquisitions affect planned time frames to implement new technology?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study Base: 652 US, 50 Canadian, and 305 European enterprises 6% 9% 84% No change Speeds up our migration time frame Postpones our migration
  • 25. Enterprise migration plans for site-to-site VPNs and WAN VoIP “ In what year do you anticipate fully moving to IP VPNs for site-to-site connectivity?” “ In what year do you anticipate fully moving to VoIP for all your outgoing calls?” Source: Business Technographics ® May 2005 And European Network And Telecommunications Benchmark Study No plans to fully move 42% Don't know 7% 1998 0% 2000 0% 2002 1% 2003 1% 2004 8% 2005 10% 2006 9% 2007 9% 2008 7% 2009 1% 2010 4% 2012 0% 2015 0% 2020 1% No plans to fully move 45% Don't know 8% 2004 1% 2005 3% 2006 9% 2007 12% 2008 12% 2009 2% 2010 6% 2012 1% 2013 0% 2015 1% 2020 1%
  • 26. Findings and recommendations
    • Enterprises should develop plans concerning:
      • Effects of M&As around the timing of technology migration, and contractual terms/conditions
      • Management of new technology, such as VoIP and wireless
    • Suppliers should improve offers based on reasons customer cite for and against using new technology and managed services
    • This survey is one slice of a multifaceted process
      • North American vs. European technology adoption
      • Customer service/support
      • Customer satisfaction criteria
  • 27. Thank you Lisa Pierce [email_address] Ryan Hudson [email_address] www.forrester.com Entire contents © 2005 Forrester Research, Inc. All rights reserved.
  • 28. Look for upcoming Forrester reports on this subject
    • 2Q and 3Q publications
    • Business Technographics ® report
    • Subject-specific reports written by telecom analysts
    • Unlimited access to the complete data set is available to Forrester TD&S clients — email Ryan at [email_address] for more information

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