Adapting to a changing marketplace

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This article appeared in the Issue 181, 19 September 2005 issue of CRN magazine.

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Sydney-based network solutions provider Efficient Data Communications (EDC) managing director Andrew Lowy says that, five years ago, the company was focused on capturing slow adopters to improve the performance of communications infrastructure by introducing wire speed layer 3 switching.

Most large organisations had already invested in high-performance infrastructure and were consolidating and not spending on any new technology, he says.

This lessened demand. The company was then forced to reposition itself as a professional solution provider.

"We have had to re-certify our engineering and sales staff on technologies that provide cost savings and improved productivity," Lowy says. Repositioning also meant EDC had to be aggressive in its marketing initiatives to capture SMB interest in the advantages of new technologies.

Michael Chippendale, general manager at Melbourne VoIP reseller My Telecom, says the evolution of networking brought tremendous opportunities for early providers of VoIP to SMB and residential development sectors.

Five years ago, My Telecom had just begun building its global Voice Gateway network that now has 26 offshore Points of Presence (PoPs). It was from its office in Melbourne to its first PoP in LA that it conducted its first VoIP trials.

Anthony Sarkis, sales manager at a Sydney networking system integrator, says his company today is basically doing the same thing it was doing five years ago -- just with many more options.

"We now have more choices, which puts us in a better position to supply the customer with the right solution that does what they want. In the past, we could only supply something that could just do what they needed or only some of things they needed," he says.

The director of reseller and boxbuilder ASI Solutions, Maree Lowe, says she witnessed many changes in the past five years, notably in network convergence, storage, wireless adoption and services. The era of the boxmover has passed, she says, though opportunities in networking gear sales existed as long as they were accompanied by appropriate services.

"Most customers want a supplier that works with them and that can advise them on technology changes in product specifi cations or delivery, technology that makes their IT more secure, makes their business more competitive and suits their individual organisation’s IT budget."

New areas of focus, opportunity

All interviewees agree that one of the biggest changes they have witnessed in the past five years is an expansion of understanding on converged networks. "Even two years ago, converged networking was [mainly] understood only by IT industry types. Today, it seems everyone from marketers to CFOs has a good idea of the benefits in improvements to operational efficiencies and sweetening the bottom line," Chippendale says.

However, increased awareness has also brought greater responsibilities. While a channel company may source most of its switching and routing products from one vendor, they now have to do far more than merely sell around the product.

According to Lowe, any serious IP services provider has to be able to provide end-to-end product supply, installation and full support resourcing, bundled with service provision for voice, data and video.

But, she adds, a raft of new opportunities surrounds the technology, such as video on demand. It has become important in the education market, she says, where other technology often cannot deliver the speed and volume of video now present in schools and universities, especially in new schools where the infrastructure must be innovative.

Lowe says ASI has seen great growth in network storage. "Storage connectivity via iSCSI and NAS protocols is probably one of the biggest things to hit the network over the last five years. It is going to drive the push for 10 Gigabit Ethernet technology out to the edge," she says.

She also recommends educating and partnering to fi ll any holes. "Find the gaps in your organisation and use partners as contractors, especially on project-based work. Position yourself as either the prime contractor or partner, depending on capability and risk factor. If you partner then you must be prepared to be the hidden partner and offer the same level of service regardless of the lesser visibility.

"Many sales involve various elements of product and service expertise. Customers just want to know that one company will take ownership and that service level agreements will be met," Lowe says partnering has to benefit both sides or it would never work.

Meanwhile, margins still have room to grow in product sales, Sarkis says. Yes, switches are a commodity product -- until you start talking about advanced technologies like VoIP, security, upgradeability and manageability.

"Most of our customers understand that there are different levels of switches depending on what they want to do. We would not implement a basic low-end switch from an unknown vendor for a  40-user network using VoIP," he says. "We are also implementing more VLANS for our customers and layer 3 switches so we have tried to stay above commodity products," Sarkis says.

Lowe says Gigabit to the desktop is trickling through ASI’s customer base. Many are moving to Gigabit attached servers and redundant Gigabit backbones with the provision for upgrading to Gigabit to the desktop if and when required. Wireless products had also grown considerably in demand, she says.

Private networking solutions, security and vulnerability checking are also strong markets today, she adds.

EDC’s Lowy says his company has shifted its focus to the building of an IP communications platform based on single vendor products that provide a solid infrastructure foundation.

The advantages to customers investing in such a foundation are many, he says, including improving productivity of network users by giving them access to prioritised applications quickly and efficiently.

A solid IP communications platform gives an ability to rapidly deploy new technologies, saving customers from having to invest in infrastructure components one at a time and evaluate the effect on the network every time they want to adopt a new technology, Lowy says.

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