NTT Survey Read-out, NFV-enabled Services April 29, 2015

Survey Overview  3 Regions: North America, Europe, Asia Pacific  8 Countries: USA, Canada, UK, France, Germany Hong Kong, Singapore, Australia  201 Respondents  20 Questions (including screeners)  Target: IT mid-senior personnel, LOB managers © IDC Visit us at IDC.com and follow us on 2

Distribution of Respondents © IDC Visit us at IDC.com and follow us on 3 N = 201

Distribution of Respondents by Job Title © IDC Visit us at IDC.com and follow us on 4 N = 201

Summary of Key Findings  Top WAN Concerns Security, Reliability and Redundancy  Top Pain Points In-house resources, Security, Global consistency of services  WAN Services Purchasing Criteria Secure Internet, SSL VPN, CPE Support  Service Provider Capabilities Quality of Service, IT capabilities, Innovative capabilities  WAN access to Cloud Hosts Infrastructure management, security © IDC Visit us at IDC.com and follow us on 5

Summary of Key Findings Continued  Enterprise views on SDN/NFV 90% Familiar with SDN/NFV concept  CSP current/future SDN/NFV capabilities 91% will require these capabilities  Deployment Plans for Managed NFV enabled services 71% of enterprises will deploy in 1-2 years  What the most desired SDN/NFV Services Over 55% prefer SSL/Cloud-based VPN  Enterprise views on benefits of SDN/NFV 60% choose Better Cost efficiency & Flexible Pricing  Enterprise views on top challenges of SDN/NFV Security is key issue and #1 for 38%  Top 3 Challenges for Network Function Deployment Migration & High Network CPE Costs both 39-40% © IDC Visit us at IDC.com and follow us on 6

Top Concerns with WAN Q: Which of the following are the top 3 concerns that your company faces in maintaining the corporate WAN? N=201 Base=All Respondents © IDC Visit us at IDC.com and follow us on 7 Q14

Top WAN Challenges: 1) Security, 2) User Experience, 3) In-house Management of the WAN are leading challenges Q: Which of the following best reflects your view of the following WAN challenges as they relate to your company? © IDC Visit us at IDC.com and follow us on 8 N = 201 Q4 Business IT

WAN Service Purchase Criteria Q: In priority order, which of the following CSP network WAN services needs to be addressed before your company would be ready to make a purchase commitment? N=201 Base=All Respondents © IDC Visit us at IDC.com and follow us on 9 #2 in Europe #1 for Manufacturing 45% Distribution Vertical Q15

Top Issues Impacting Networking Purchasing Decision: (Regional & Functional Perspective) Q: When purchasing telecommunication, wide area network and Internet services for your company, what are the most important aspects to consider? © IDC Visit us at IDC.com and follow us on 10 “Top 3” AspectAmericasEuropeAsia Quality of Service/Support  Ability to provide IT and application services as well as network services  Technology innovation  Performance and service level agreements  “Top 3” AspectITBusiness Quality of Service/Support  Ability to provide IT and application services as well as network services  Technology innovation  Contract Pricing/Flexibility  Full List of choices: (ordered by frequency of selection by respondents) 1.Quality of service and support 2.Ability to provide IT and application services as well as network services 3.Technology innovation 4.Performance and service level agreements 5.Pricing 6.Contract/pricing flexibility 7.Cloud services strategy 8.Geographical coverage 9.Ability to provide wireline and mobile/wireless services 10.Service management features via self-service portal 11.Ease of doing business with the provider 12.Vertical/industry expertise N = 201 Q1

Key Drivers for WAN access to cloud hosts Q: What type of enterprise WAN functionality will likely require delivery of WAN access to cloud hosts? © IDC Visit us at IDC.com and follow us on 11 N = 201 Desktop mgmt rises to #2 in North America WAN Monitoring is a strong #1 for very large enter & #2 Europe WAN optimization is #1 for Healthcare LAN monitoring is top pick for Retail/distribution Q9

CSP SDN & NFV Capabilities Q: How important are the SDN and NFV capabilities of a Communications Service Provider (CSP) to your company's current or future plans to implement NFV-enabled services? © IDC Visit us at IDC.com and follow us on 12 91% of ALL respondents believe SDN and NFV capabilities of CSP are important or very important for future NFV services N = 201 Q6

Plans for Managed NFV-enabled services Q: When do you expect managed NFV-enabled services and solutions to be deployed by your company? © IDC Visit us at IDC.com and follow us on 13 With a late start, Europeans appear poised to make a strong push into NFV in 2015 N = 201 Q7

Enterprise Ranking of NFV-based Services Q: For which of the following NFV-enabled solutions is your company likely to consider using a CSP? © IDC Visit us at IDC.com and follow us on 14 DCI and Virtual CPE are ranked a couple of steps higher by respondents from Asia Cloud SSL is the overwhelming favorite across regions and verticals N = 201 Q8

Top benefits of NFV enabled Services Q: What do you see as the three most important benefits of carrier SDN and NFV-enabled solutions? © IDC Visit us at IDC.com and follow us on 15 Cost rises to the top on the list of business-centric attributes Percentages are computed from respondent’s top-3 choices Services sector strongly favors flexible pricing as their #1 (82%) Healthcare respondents rank in- house replacement as their strong #1 N = 201 Cost, Pricing and rapid deployment seen as top 3 benefits of NFV enabled Services Q11

© IDC Visit us at IDC.com and follow us on 16 N = 201 Migration costs the #1 concern for smaller enterprises (<$500M) and Americas region CSP expertise rises to #2 in Europe Security is #1 or #2 concern across all regions, sectors and sizes of company Q12 Top concerns for adopting NFV-enabled network services Q: What are the top 2 concerns for your company to adopt NFV-enabled network services?

Top 3 Challenges for Network Function Deployment Q: Which of the following are the top 3 challenges that your company encounters when deploying new network functions (ex. QoS, Application acceleration, etc.) or new locations to your corporate WAN? N=201 Base=All Respondents © IDC Visit us at IDC.com and follow us on 17 Top issue in APAC #1 for Healthcare #1 $1-5B Business Q13

Survey Highlights & Insights Survey question Insight / highlight Q1Interesting to see CSP’s Application & IT services expertise as #2 priority for enterprise buyers (all regions) Q3Pay-per-use is #1 option for APAC & WE, whereas US wants to move to outside hosting of services Q4Which of the following best reflects your view of the following WAN challenges as they relate to your company?, No surprise that Security is # 1, and that enterprises are recognizing that consistent user experience will be a big challenge as #2 Q6Surprised that 91% of ALL respondents believe SDN and NFV capabilities of CSP are important or very important for future NFV services given that many enterprises have not yet even been exposed to NFV and that NFV services are nascent. Also 90% had familiarity with SDN & NFV Q7Europeans appear poised to make a strong push into NFV in 2015 Q8DCI high in U.S. and APAC reflecting the high amount of content and web 2.0 companies based in those 2 regions, vCPE high in APAC which is interesting Q9Diverse responses: WANop & Infra Mgmt # 1 as important WAN Access to Cloud for U.S., LAN/WAN monitoring in EMEA, Security & IT Infrastructure in APAC Q10Security policy mgmt and full managed solutions top attributes for a NFV service in all segments Self-deployment, self-management capabilities fail to make the top three Q11Cost efficiency & flex pricing top 2 business attributes- no surprise Q12Concerns with NFV: Security & migration for U.S., Security & NFV CSP expertise in EMEA, Security & SLA for NFV for APAC Q13Migration between providers & High CPE cost key inhibitors for WAN functionality enhancements © IDC Visit us at IDC.com and follow us on 18