Specializing In 'Microverticals' Will Be Key
I would argue that the need to specialize and integrate is more important than ever. In the future, you will need to stitch together technologies and, more importantly, have development expertise to offer custom applications for your customers. While products are part of the solution, it won't be where the bulk of your margins come from. If you stay close to your customers and their obstacles, you will survive. This is where I believe microverticals come in and the ability to build practices around very specific markets and pain points.
I am not talking about having a specialty in health care, for instance, but rather a specialty around a certain function within health care and targeting a certain constituency within the health care field. For example, you become an expert on EMR for clinics and physician's offices. You become an expert in the hospitality market around integration services or transportation and logistics. And while some of the customers' pain points may be around hardware integration services, most will be around the applications you provide to the customer.
And let's talk about the customer. Your customer may not be the CIO or IT guy in the future. There is an internal battle with IT and line of business to control and own the technology. Line of business is winning because it is responsible for P&L, not IT, and technology can help it get there. What's more, technology is cheap and accessible. If IT isn't an enabler, line of business will and can go around them with the plethora of cloud services that are available to them with a swipe of the credit card.
Speaking of cloud, where do you play in the future and how can you address the needs of your customers and the line-of-business managers? Depending on the customer you serve, cloud could be a big opportunity or a threat that you need to understand. Many of the enterprise customers are looking to build out private clouds because they believe this is the next stage of virtualization. This trend could sync up with your current business model very nicely. Or perhaps you lead with business process outsourcing and pull in the hardware and software integration.
If you are serving smaller customers, perhaps you resell a service or you bundle a service together and build custom apps on top of it -- again the opportunity around microverticals.
But this market is still a landgrab, and how it all shakes out is still very unclear. What if the carriers and service providers use their last-mile advantage and simply add these services onto their current offering? Perhaps they scoop up MSPs like the recent $1.4 billion acquisition of Terremark by Verizon, or go to you to resell their cloud offerings. The next five years will require a new way of thinking and investment in skills. How you fit in will be determined by the path you take today.