U.S. Enterprises Tackle Complexity With Network Services

Outsourcing specialized management functions helps companies ensure network security, connectivity, smooth upgrades, ISG Provider Lens™ report says

A growing number of enterprises in the U.S. are adopting managed network services to support AI and other new technologies across increasingly complex networks, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Enterprise Managed Network Services report for the U.S. finds that enterprise networking has become more challenging in recent years with increasing regulation, security risks and remote and mobile work. A growing number of companies rely on managed network services, which can provide security, network management, cloud connectivity, software-defined networking and other functions with less need for internal expertise.

Providers of managed network services are integrating AI and automation into their solutions to help manage increasingly complex networks, the report notes. AI-based solutions and automation tools are being used to enhance network monitoring, troubleshooting and optimization.

“The rapid evolution of digital technologies, including AI, has made networks more complex and placed IT organizations under increasing stress,” said Dieter Thompson, partner and president of ISG’s Network and Software Advisory business. “The shift toward outsourced networks reflects a growing need to manage today’s infrastructure while giving enterprises more freedom to evolve.”

U.S. enterprises have been at the leading edge of network outsourcing, with a higher adoption rate than in Europe or Asia Pacific, ISG says. Many companies began a few years ago by starting to co-manage networks with service providers, but most have since migrated to a fully managed approach that eliminates even more complexity and effort.

Comprehensive suites of network services form a secure foundation for business transformations while allowing organizations to focus on their core operations and reducing the risks associated with network updates, the report says. This can help enterprises streamline implementations of new technologies such as generative AI.

With managed connectivity services, companies are adding new types of connectivity, including VoIP and direct internet access (DIA), without having to train their own staff, the report says. There is rising demand for DIA, which gives enterprises a direct, exclusive ISP link for applications in which performance and security are critical, such as high-volume data transactions. The need for VoIP is also growing, as more work becomes remote and high-speed broadband and 5G networks become available in more places.

Network as a Service (NaaS) may represent the next step in managed network services for enterprises, especially midsize organizations, ISG says. It lets companies rent networking services that can be easily integrated into current commercial network deployments across multiple regions. Clients use and pay for the services as needed. Most large enterprises in the U.S. are conducting trials of NaaS, but interest is even higher among midsize companies.

“U.S. enterprises need the flexibility to turn on new networking capabilities as their business requirements change,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Outsourcing is an increasingly attractive way to achieve this, especially for midsize companies.”

The report also explores other enterprise network management trends in the U.S., including the growing importance of coordinating among management vendors and integrating multiple clouds.

For more insights into the network management challenges faced by U.S. enterprises, including rising threats to network security and the need for organizational change management, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Enterprise Managed Network Services report for the U.S. evaluates the capabilities of 33 providers across three quadrants: Managed Network Services Evolution, Managed Enterprise Connectivity Solutions (DIA, VoIP & VPN) and Network as a Service (NaaS).

The report names Accenture, AT&T, Comcast Business, GTT, Kyndryl and Orange Business as Leaders in all three quadrants. It names DXC Technology, Verizon Business and Wipro as Leaders in two quadrants each. Apcela, Colt, HCLTech and Microland are named as Leaders in one quadrant each.

In addition, Capgemini, Colt and HCLTech are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

In the area of customer experience, Accenture is named the global ISG CX Star Performer for 2024 among enterprise managed network service providers. Accenture earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

A customized version of the report is available from GTT.

The 2024 ISG Provider Lens™ Enterprise Managed Network Services report for the U.S. is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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