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 Segmenting the Market Traditional Channel vs. Managed Service Provider.

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Presentation on theme: " Segmenting the Market Traditional Channel vs. Managed Service Provider."— Presentation transcript:

1  Segmenting the Market Traditional Channel vs. Managed Service Provider

2  About Me Steve O’Donnell Author of What Every CIO Wants Speaker, Analyst & Commentator Fiduciary & Advisory Board Member Business Adventurer in IT Security, Wireless, Big Data, Managed Services, Storage Social Media Addict Background Global Head of Operations BT CEO MEEZA – Qatar Senior Analyst ESG Copyright © S1NED Limited 2012 All Rights Reserved 2

3 The Mid-Market Defined  Companies with fewer that 1000 staff  Annual Global IT Spend $250B  Served almost exclusively (80%) by you - The Channel  Independent Software Vendors (ISV)  Managed Service Providers (MSP)  Systems Integrators (SI)  Resellers (IBM, HP, Dell, Microsoft, SAP) Copyright © S1NED Limited 2012 All Rights Reserved 3 Source IBM Analytics and Research 2012  The Channel is made up of hundreds of thousands of companies globally (IBM has 120k – 80% of deals over $100k)  No single company has even 1% of the TAM  85% of buying decisions are made via search and social media - key metrics are  Location  Specializations & Skills  Branding and Reputation

4 Mid-Market Forecast Copyright © S1NED Limited 2012 All Rights Reserved 4 Source IBM Analytics and Research 2012 Forester market forecast

5 The good, the bad and the ugly  The mid-market is migrating to service based delivery  Margins are better in the MSP space  How do I get there? Copyright © S1NED Limited 2012 All Rights Reserved 5 Source IBM Analytics and Research 2012

6 Markets, Messages and Segments  Segmentation is the process of identifying markets that have similar enough problems, characteristics and behaviors so that the same messages and solution offerings will resonate  Sometimes we do Product Discovery – green field approach, what products might I create for segments I influence?  Often we do Segment Discovery – who might want my product or service and why? Copyright © S1NED Limited 2012 All Rights Reserved 6

7 Characteristics & Behaviors ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Importance of IT  Organizations buy solutions to their perceived problems  An organization's perception of their problems and the suitability of any solution are formed by their own unique constraints and drivers  Segmentation drops out of understanding this Copyright © S1NED Limited 2012 All Rights Reserved 7 ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures

8 The ARC TM behavior drivers  Improve Agility to deliver innovation and kill the competition  Avoid or reduce Risk to business activities  Reduce Cost – often the least important but key to funding innovation  A smart business will be prepared to trade one off for another 8 AgilityRiskCost The three fundamental drivers of customer behavior that must be harnessed in all messaging Multiple drivers are combined to create a balanced message Copyright © S1NED Limited 2012 All Rights Reserved ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures

9 Message Construction Our cloud-based retail analytics platform will arm you with the data you need to make optimal supply chain decisions and ensure that, just like the majors, you have the right products on display and it can all be delivered in a flexible pay for what you consume model  Can you pick out the three balanced message threads?  What problems are we solving? Copyright © S1NED Limited 2012 All Rights Reserved 9 ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures AgilityRiskCost

10 Business Stage 10 Business Stage TypePriorities Special Forces Startups New business units New Products Agility Cost Risk Army Established business Established product Not #1 in market Agility Risk Cost Police Force Market leader Large Enterprise Government Risk Agility Cost Startup VC Backed Usurper Mid Market Growth Stage Contender Enterprise Public Company Government Enterprise messaging won’t work for a startup Get the behavior driver priority right and messaging becomes easy and effective ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures

11 The Four Types of Leader ParatrooperOld TimerConsultantFamily Knowledge of IT TypeInterests Paratroop (professional change agent) Fixing stuff that is broken – fast – loves agility Willing to take calculated risks Welcomes external help Spends to fix stuff Consultant (management consultant interim hire) Analyze everything in detail Slow to make decisions Driven by numbers & process Risk averse Old Timer (been in position for years) Understands his own business and IT. Slow to change, slow to trust Cost sensitive Family (group of family members who decide in committee) Business focused Probably risk averse Driven by cash Sometimes emotional Knowledge of the Business Senior level change can signal an opportunity to invest in a prospective client ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures Copyright © S1NED Limited 2012 All Rights Reserved 11

12 Is IT Always Important? Invest CRMMRPLogistics Operate Telephony & Communications Storage & Backup Contain Legacy Accounts System Shop Floor Automation EPOS Kill Contain platforms that impact business Invest Applications that are not agile Copyright © S1NED Limited 2012 All Rights Reserved 12 ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures

13 The Four Types of IT System 13 InvestOperate KillContain Application Categories Messaging that does not align with this micro-segmentation will miss the mark and fail e.g. Cost savings messages for mission critical invest category systems rarely work ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures Copyright © S1NED Limited 2012 All Rights Reserved

14 Location & Delivery Constraints Combine the segment characteristics & behaviors to determine the appetite for risk, the importance of agility and sensitivity to cost On Premise HostedManagedCloud Local ✔✔✔✔ Regional ✖✔✔✔ National ✖✖✔✔ Global ✖✖✖✔ Copyright © S1NED Limited 2012 All Rights Reserved 14 ARC TM Metric Business Stage Private Public Government Charity Geographic Location Leadership Style Competitive Pressures AgilityRiskTotal CostCost Flexibility On-premises / Reseller  Hosting  Managed Services  Cloud Service 

15 The Opportunity Value Chain Your customers customer has a problem and your customer recognises an opportunity Customer CEO or BDM discovers business opportunity Customer CEO and BOD decide to deliver solution Customer business case developed, market sized, opportunity assessed Customer CMO starts to define product set and segments - solutioning begins CMO engages research analysts and derives market segment size and detailed requirements for the product CMO engages COO to continue solutioning and business mobilization COO starts to create detailed shopping list of products and services required to deliver on defined service CMO hands over to IT team to develop IT part of solution By now the product is defined and their is little opportunity to influence in a meaningful way IT engages with reseller with fully defined product and a request to just get the hardware At the bottom of the pipe, the reseller team have no freedom of action and are not part of the conversation Marketing activity that engages too late misses the most important customer change and spending initiatives Then it is all about cost not value Marketing programs that focus on business rather that technology change resonate with businesspeople IBM – Smarter Planet Copyright © S1NED Limited 2012 All Rights Reserved 15

16  Thank you Copyright © S1NED Limited 2012 All Rights Reserved 16


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