VAR500 2010: 10 Market Sweet Spots For The Channel4:00 PM EST Wed. May. 26, 2010
Mid-range servers and virtualized infrastructure in manufacturing? Or is it VoIP and unified communications in legal, health care and state-level public sector accounts? Take a look as we examine some of the major market sweet spots -- vertical markets, market sizes and technologies -- of this year's VAR500 solution providers.
As a blanket descriptor, midsized businesses from 500 to 999 employees were the most consistently selected business targets in 23 vertical markets. For example, when asked to choose the customer size they focus on the most (from SOHO all the way up to Fortune 500-level) in each vertical market, 100 percent of VAR500 solution providers answering for defense contractor/military picked midsized businesses. Other strong showings for midsized businesses by vertical market were:
Pharmaceutical (100 percent)
Utilities, including oil and gas (100 percent)
Retail (50 percent)
Just up from the midmarket comes the large business category (1,000 to 9,999 employees), where many VAR500 solution providers target their efforts in other select verticals. Some of the hottest vertical markets in this size category included:
Construction (100 percent)
Recreation/Hospitality (100 percent)
Insurance (67 percent)
Higher Education (57 percent)
Federal Government (50 percent)
State/Local Government (44 percent)
One hundred percent of VAR500 solution providers responding to which market size they focus on for communications/telecommunications picked enterprise-level companies of 10,000 or more employees. As much as we talk about the growth of communications and telco solutions in the SMB, technologies such s VoIP and unified communications are still very much a lucrative, big-enterprise game.
Ah, health care: at the very least, recession-resistant, and at best, a powerhouse opportunity that's growing all the time. When asked to evaluate which verticals they served most with which technologies, VAR500 solution providers listed mid-range servers 82 percent of the time for health care, VoIP 61 percent of the time, hubs, switches and routers 81.8 percent of the time, basic security 72.7 percent of the time, backup and recovery solutions 84.8 percent of the time, enterprise storage solutions 84.8 percent of the time, etc., etc. ... you get the idea.
Translation? With so many categories covered, VAR500 solution providers strongly favor health care across the board.
After health care, education -- both K-12 and higher education -- was another vertical most VAR500 solution providers said they favored for a wide range of different technologies. Mentions in education for desktops, notebooks and entry level servers (81.8 percent K-12; 90 percent higher education), mid-range servers (81.8 percent K-12; 90 percent higher education), displays (63.6 percent K-12; 70 percent higher education) and printers (72.7 percent K-12; 90 percent higher education) were all strong.
If you're a VAR specializing in business-class communications and connectivity services, legal should be your bull's-eye. VAR500 solution providers listed business-class communications and connectivity services up to 50 percent of the time as a focus in several verticals: defense contractor/military, higher education, entertainment media/publishing, non-retail pharmaceutical, recreation/hospitality and retail/point of sale. But legal garnered a noticeable 100 percent. In other words, that lawyer wanting seamless connectivity and security for his or her mobile devices is waiting for you.
Surprise, surprise: virtualization is still hot. VAR500 solution providers listed virtualization as a key technology for 16 of the major verticals, with 11 of those 16 -- accounting/banking/financial services, defense contractor/military, K-12 education, higher education, entertainment/media/publishing, federal government, state/local government, health care, non-retail pharmaceutical, legal and manufacturing --garnering 60 percent or more in respondent affirmations.
Custom-built systems were not an across-the-board choice for VAR500 solution providers targeting vertical markets, but two vertical markets in particular -- construction and entertainment/media/publishing -- yielded 100 percent "affirmative" response rates when VAR500 solution providers were asked whether they focus on custom-built systems in those spaces. Higher education and retail/point of sale also yielded 50 percent rates for custom-built systems, suggesting that the verticals traditionally asking for those systems remain steady.
Linux-based solutions are seeing modest adoption and gradually increasing levels of focus in a few specific verticals. Fifty percent of VAR500 solution providers working with the communications/telecommunications, defense contractor/military, recreation/hospitality, retail/point of sale and wholesale/distribution segments said they are focusing Linux-based solutions at those markets.
VAR500 solution providers listed data management software in some places more than others, but in the verticals where it was a high area of focus, it was very high: 100 percent in recreation/hospitality, 75 percent in communications/telecommunications, 75 percent in defense contractor/military and 72.7 percent in K-12 education.