Vendors go vertical with sales pitches

If hardware vendors take the advice of one industry analyst, the enterprise can expect the likes of Cisco Systems Inc. and Nortel Networks to pay greater attention to individual market segments.

“The users should be expecting vendors to know a lot more about their business going forward,” said Alan Freedman, research manager, infrastructure hardware at IDC Canada Ltd. in Toronto. “If vendors can’t come in and show that they’re in tune with the issues particular to the customer’s marketplace, that’s an easy way to pare down the number of prospective vendors that you’re dealing with.”

In Freedman’s recent report, called Canadian Infrastructure Hardware 2003-2008 Forecast: Targeting the Hot Vertical Markets, the analyst says vendors have plenty of opportunities to win new business, but the difference between gaining an account and losing to a competitor could come down to how well the seller knows the customer’s business.

The report outlines differences between various market segments. For instance, manufacturing companies would rather download a free version of the Linux operating system, whereas the distribution and services group would prefer to buy the OS through a value-added reseller. Distribution and services firms are all about creating efficiency, whereas the public sector seems most concerned with centralization, and for the infrastructure services crowd, uptime is utmost on their minds.

Freedman said targeting is important as vendors try to make their mark.

“If vendors can be successful in targeting and investigating specific vertical markets, they can really dig deep, and find out if there are common issues among companies — if they differ by size, or have some kind of commonality.”

According to Dan Young, vice-president, global industry solutions marketing at Nortel, his company takes targeting to heart. “Customers are looking for particular business propositions…mapped to their particular problems,” he said.

Young pointed out that this year marked Nortel’s return to the U.S. Health care Information and Management Systems Society (HIMSS) conference, which focuses on IT for health care facilities. Nortel came back to this event to better target health care clients.

He described this market as small but growing. It’s generally looking for connectivity solutions that take into account a roving user population — doctors and nurses are on their feet a lot of the time. And it’s important to mind the strict privacy protocols that guard patient information.

Wi-Fi would prove popular in hospitals, not only for doctors and nurses, but for people in waiting rooms who might want to pass the time researching work-related documents online or accessing corporate apps through a VPN, Young said.

Brantz Myers, national manager of enterprise marketing at Cisco Systems Canada Co., also attended the HIMSS conference. He said it’s important to focus on specific verticals, especially as Cisco aims to climb the corporate ladder and win the ear of business decision makers, as well as the technology decision makers that it traditionally targets.

But “now you’re much closer to the problems they have,” Brantz said. Cisco may well provide communications systems, but they won’t sell if the firm can’t apply them to business needs.

Cisco has put some thought into particular verticals. For instance, Myers said a wireless IP phone system would help hospitals become more efficient. With location-based software that connects hospital diagnostic equipment to the nurse-call system and Wi-Fi handsets, patients would be able to get in touch with the closest nurse in case of emergency.

Freedman said vendors seem to be getting the message that focussing on individual markets could help them achieve their sales goals.

Still, “they should be increasingly looking at a way to segment the market,” he said, pointing out that vendors could improve their targeting tactics.

One IT manager warns, however, that vendors should not come into customer sites with all marketing guns blazing.

“Speaking personally, if I were a vendor I wouldn’t go in saying, ‘I know all about your business; I know what you need,'” said Andrew McAusland, director of instructional and information technology services at Concordia University in Montreal. “Nobody’s going to react well to that. If you want to build the relationship, you have to share information. Sharing information is not telling people you know all about their business.”

Concordia recently installed a bevy of Cisco networking gear. “We have had the right kind of relationship with them,” McAusland said. “But I know that’s not the case across the board,” he added, pointing out that some hardware vendors need to brush up on their relationship-building skills.

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