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Welcome to ZyXEL Press Room In this area you can browse the latest announcements, events and more from ZyXEL and our worldwide subsidiaries.

Vertical thinking

January 31, 2012

James Harris of ZyXEL explains why it may make sense for resellers to focus on vertical markets such as hospitality and healthcare with technologies such as 802.11n WiFi and Gigabit Ethernet

Every customer is trying to save money right now and that’s not likely to change any time soon. Some networking vendors are trying to overcome customers’ reluctance to invest in new infrastructure spending by putting forward a more converged approach, bringing servers, networking and storage together with virtualisation and the cloud and a suite of all-encompassing management software that is supposed to bring it all together.

The benefit for the end-user customer (and they are really targeting ‘enterprise’ customers here) is cost reduction. But for many customers that won’t be enough; they will still be forced into what is for the most part, a massive ‘rip and replace’ project.'

In my opinion, this proposition is too radical for many cash-strapped budget-holders at the moment – it’s also too much of a broad-brush approach to the market. It simply won’t convince decision makers and unsurprisingly, they are not responding.

 

But we’re finding is that customers in specific vertical sectors of the market will respond to technology messages geared to addressing current issues or point problems that they have in their business. For example, in hotels and clubs, providing wireless access has become vitally important there is a real need to implement really good, effective WiFi to provide improved coverage and consistent, reliable performance.

 

Upgrading to 802.11n will give them those benefits. With so many customers now using tablets and smartphones and wanting to receive richer content on their devices, it makes sense for them to invest the extra 10 – 20 percent that this will cost over 802.11g technology, so they can deliver better customer service and to get an edge on the competition.

 

From a reseller perspective that premium makes a lot of difference. It also enables them to deliver a better solution for the customer and build further loyalty and prestige.

 

Similarly in healthcare and in schools, there is a very strong argument for adopting Gigabit Ethernet on the backbone. The extra bandwidth will support multimedia-rich traffic and to enable adoption of cost-saving technologies such as VoIP and more robust remote backup and DR solutions.

 

The appeal of latter applications should not be underestimated. Many public sector organisations in particular, are now much more aware of the dangers posed by potential data loss and are very interested in mitigating risk and the potential for calamitous data loss.

 

Putting forward very specific technology solutions that address very specific issues in a specific industry is not a new idea. Really, it is just common sense – it is more effective because it is more appealing to the customer. They can see exactly how the investment with benefit them right away. The broader ‘converged infrastructure’ approach is quite simply, a way for the vendor to try and articulate a value proposition that will appeal to the whole market and encourage a new wave of spending. The trouble is every business is different – and at the present time, saving money, reducing risk and protecting existing investments are the priorities. Yes, they will invest in new networking technologies and solutions – but only if they deliver benefits and savings almost immediately.

 

The problem with taking a more focused approach on solving customer problems in specific vertical markets is that it takes more time and effort. You need to think about it. But this is exactly where the reseller can add value. I don’t know many resellers who think much of the endless stream of verbiage and inflated diction that vendor marketing departments tend to generate for their benefit anyway. What really counts is what the reseller can actually do for the customer.

 

It might take a little more effort, but by applying a little intelligence, giving a little more thought to the problems that customers in specific industries face today, and building a proposition that meets those needs, resellers will get further than they would by simply regurgitating vendor marketing messages designed to have the broadest possible appeal.

 

By focusing on specific opportunities – rather than trying to press enterprise customers to sanction a general upgrade of their networks, resellers can appeal more directly to their own customers in the markets in which they already have a presence. They can differentiate themselves from competitors, open up good new opportunities and deliver great ROI for their customers and thus build a healthy and loyal client base. For all these reasons, it makes sense to think vertically.