How To Achieve Vertical Victories

Joe Bellini understands the ups and downs of being a solution provider.

As president and CEO of C-bridge VB308, he has seen the company reach new heights. Revenue for the Cambridge, Mass.-based e-services company took an Olympic leap from $22.7 million in 1999 to $83 million in 2000, quickly emerging as one of the rising stars among e-business solution providers.

Unfortunately, Bellini has also seen new challenges. C-bridge, like many other solution providers, has suffered due to IT spending cutbacks. The company had lower-than-expected first-quarter results this year and dropped its 2001 revenue forecast from $105 million to $86 million. And C-bridge recently agreed to a $73 million merger with technology firm eXcelon to focus on XML-based e-commerce solutions for key verticals.

C-bridge's answer to the slumping economy was simple,go vertical. After reporting disappointing results in Q1 and laying off more than 100 staff members this spring, Bellini transformed his company into a "vertical solution provider." C-bridge began

building its iSolutions line around its most prolific vertical markets, such as financial services, manufacturing and retail. The company also divided its operations into three customer segments,asset-intensive, material-intensive and service-intensive. Everything outside the key verticals was dumped.

While cutting back on business and operations may seem like an odd strategy to make more money, Bellini says it was an obvious choice. The company had spent five years and millions of dollars learning the ins and outs of a select few verticals.

"We're too small to be a market leader, so we need to ride the wave of certain markets and fill in the gaps," Bellini says. "Now we're finding areas in specific verticals where we can solve specific problems."

Many solution providers are employing similar strategies by cutting back on operations outside their core competencies and focusing on solutions aimed directly at vertical markets. The mission is simple,find a vertical market and stick to it like glue.

The execution, however, is not so easy. Besides tireless dedication and deep knowledge of a vertical, Web integrators and Internet services companies have to bring the right technology to the table. And, of course, solution providers need to pick the right verticals to rally behind.

In addition to C-bridge, Primix and Stonebridge VB175 have also found success in aligning themselves with vertical markets. Here's a look at how the three companies have earned their vertical victories.

Part 2: C-bridge: Right At Home
Part 3: Primix: Ensuring Efficiency
Part 4: Stonebridge; Cure For The Pain

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