March, 2004 Into the LAN: An Integrated LAN/WAN End User Study © 2004 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

Today’s presentation 01: Introduction and Methodology 02: Expected benefits and objections 03: Criteria for choosing a Service Provider 04: Implementation Issues 05: Conclusions and Recommendations

Market trends indicate a positive future for the Integrated LAN/WAN services market with key target market the large national enterprises Large National Enterprises High Low High Small to Medium Business Consumer Market Very Large Multinationals Supplier Attractiveness Customer Attractiveness However in order to avail of this potential opportunity service providers will need to develop an effective approach to market

Introduction Service providers increasing competencies enable competition in other areas of the market Managing enterprise networks increasingly complex Desire to lock-in customers and increase ARPU Definition of service unclear Level of management varies according to service provider competency Service providers require assistance to develop value proposition Gauge initial reactions of enterprise network managers to Integrated LAN/WAN solution Understand implementation issues from customers perspective Development of ConceptRationale behind ReportAim of Report

Methodology Size of Company Over 150 employees and 5 sites Frost & Sullivan Expertise Undertaken by senior industry analyst. Input from other industry experts Target Respondents Make the purchase decision or at least make recommendation Project Objectives Gauge awareness Understand requirements Perceived benefits Identify concerns Highlight market dynamics Rank implementation issues

Expected Benefits Cost More efficient allocation of staff time Costs related to network management Reduced total cost of ownership Easing Complexity Single Point of Contact Long term assistance and project management

Challenges and Objections Performance and continuity Security Lack of trust Return on investment concerns Legacy instalments Internal issues within the IT department

Service Provider Criteria Ability to meet SLAs Having one single supplier providing all company’s networking solutions and requires very tight SLAs Reputation Early impact evident from providers with high level of sustainability. Particularly important when transporting mission critical data End users need to be educated about service providers ability to provide new services in markets traditionally not their domain Price Despite continual push for quality service and increased support price is still ranked most important criterion

Implementation Issues Pricing Generally a matrix format with layers of service depending on customer demands Preference for flat fee per month SLAs Most important components availability and response time Establish strong post-purchase relationship Investment IT function seen as separate from business in order to allow company to focus on core business functions Maintain FlexibilityAdhere to PromisesBusiness oriented migration

Conclusions Approach market in terms of benefits expected and concerns to be addressed Cost is still a major issue for most enterprises and is expected to be a major benefit of this service Lack of trust in both service provider ability and sustainability Results point to positive attitude towards Integrated LAN/WAN solution Price and reputation of service provider will be most important selection criteria

Recommendations Service providers need to concentrate on educating the market with regard to their capabilities in this space Develop an effective value proposition Prove financial sustainability Concentrate on promoting most important expected benefits Address concerns and where possible overcome them Develop a robust key account management structure Ensure the basic issues are dealt with early

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