Firms cater to customers through wares tailored for specific audiences.
Some vendors of high-tech wares are starting to focus more closely on specific customer segments in vertical markets. While most IT vendors do not tailor-make servers, switches, security and storage gear for specific businesses, .
While most IT vendors do not tailor-make servers, switches, security and storage gear for specific businesses, some purveyors of high-tech wares are starting to focus more closely on specific vertical customer segments.
For years, businesses in the manufacturing, healthcare, retail and financial markets have worked with vendors to mold products for wide, horizontally focused markets and customize them for tasks unique to specific industries. In response to this, large vendors such as IBM and Cisco have created vertical-focused marketing, support and services groups to act as liaisons among users with specialized requirements and the engineers and product managers designing the gear.
One example of this is IBM’s recent revamping of how it offers Linux-based products and services to its customers. Instead of just selling to all comers Linux distributions, such as Red Hat and Novell’s SuSE, on top of its iSeries, xSeries, pSeries and zSeries hardware, IBM created separate vertical-focused offerings for such industries as automotive, retail, banking and supply-chain management, which can be applied to multiple verticals.
The four vertical-focused Linux areas are called Infrastructure for Automotive Common Environment, Total Store Solutions, Production and Supply Chain Transformation, and Front Office Optimization for Banking.
Getting vertical While IT and networking companies try to reach as broad an audience as possible for selling products, vendors also approach specific vertical segments with trageted offerings. | ||||||||||||||||||
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Through these programs, IT executives in each vertical can purchase Linux-based servers, applications and specialized front-end desktop products, such as point-of-sale terminals for retail, advanced CAD workstations for automotive design or customized bank teller applications, says Scott Handy, vice president of worldwide Linux. “Solutions are being defined by the customer, not by the vendor,” he says.
Most of the IBM solutions involve standard Linux builds and servers, with customized applications and other tweaks aimed at the specific vertical. Other vendors, such as Cisco, have taken the vertical focus to the next step, by making hardware products aimed at certain niche markets.
Cisco’s vertical efforts led to the development of a specialized product for manufacturing environments: the Catalyst 2955, a LAN switch modified to operate on the factory floor. Unlike most Cisco switches, the Catalyst 2955 includes heat sinks instead of fans, so dust and debris are not sucked into the device. The box also is engineered to run under higher temperatures than regular switches.
More recently, the vendor launched its Medical Grade Network effort, which involves partnerships with vendors who make healthcare-specific IT products that allows applications and devices to operate more smoothly over a Cisco-based LAN or WAN.
One offering is nurse-call integration via Cisco IP phones using software such as Rauland-Borg and middleware from Emergin Technologies. This product package allows Cisco IP phones and wireless LAN (WLAN) IP phones to act as nurse paging and contacting systems, which can deliver text data and voice to the nurse being paged. Another offering in this area is Location-Based Services, which allows a hospital to track the physical location of key doctors or important pieces of equipment through a Cisco WLAN infrastructure and third-party RFID equipment from PanGo.
Boston Medical Center is piloting some of the IP communication technologies Cisco offers for healthcare customers. “We were in search of a killer app or a function for VoIP other than the cool factor that would speak to a business need or problem,” says Darren Dwarkin, CTO at Boston Medical Center.
The healthcare facility uses Cisco’s Clinical Connection Suite, which includes 7920 IP phones that support XML text messaging and APIs for writing code that can interface with other systems, such as network-enabled medical devices.
“Now, on the hips of nurses, there is an integrated voice path. And we’re beginning to build automated messaging directly to phones,” Dwarkin says. The capability would allow clinical devices such as ventilators and pumps to send text alerts to nurses.
Such product designs and integration projects come directly from Cisco customers, says Rod Scott, director of solutions marketing for Cisco.
“We run a technical advisory board which includes the top network engineers from our top 40 accounts,” he says. “They tell us what they’d like to see from us. During the meetings, the members break themselves up into vertical groups, to discuss the things they care about with Cisco engineers.”
This type of Cisco engineer/customer interaction spurred creation of the industrial-strength Ethernet switch and Cisco’s medical-focused efforts.
“When we build products or add new features, we often have a vertical application in mind, because the ideas come from customers,” Scott says. “In the end, the ideas are applied horizontally and changed into something all customers can use.”
Another example of this is Cisco’s recently announced modules for its WAN routers that integrate XML-based Application Oriented Networking technology with third-party RIFD infrastructure products from partners ConnecTerra, Intermec Technologies, PanGo Networks and ThingMagic. The result is a box that can identify RFID packets sent from reading devices to the network, then accelerate, encrypt and filter the traffic to deliver it more smoothly to retailer’s back-end database systems.
While IBM’s vertical Linux push and Cisco’s market-focused efforts may appeal to IT professionals in specific sectors, other users say there always will be room for niche technology products as long as there are specialized requirements unique to a certain industry.
One example is in the area of Material Safety Data Sheet (MSDS) information management. The Environmental Protection Agency requires all chemical manufacturers to make MSDS information available to partners and customers. Customers who make products based on chemicals also must track what they put into their products through MSDS.
Easton Sports, a maker of sporting gear, must track hundreds of thousands of MSDS listings for all the chemicals and other materials used to manufacture its gear. The firm uses a software tool from a small application vendor called Actio, which makes MSDS Vault, a software tool that Web-enables access and storage of MSDS data for manufacturing customers.
While Easton uses products from Cisco and IBM, its niche products, such as Actio’s software, are often key components in a vertical businesses IT infrastructure, says Michael Mendoza, environmental health and safety coordinator at Easton Sports.
Mendoza says this type of application is too specialized for big software vendors with a broader focus.
