CLIENT'OVERVIEW''B-Com System* designs, manufactures and brings to market a range of enterprise routing platforms used by communication service providers to deliver managed communication services to SMBs and Enterprises. The IT company works with customers, including several well-know service providers, in dozens of markets around Europe and Asia. It currently employees 500 people across its multiple commercial and R&D centres.

B-COM’S'BUSINESS'CHALLENGE'With a mandate to generate added business growth, B-Com’s CMO saw the opportunity to further develop the business of a secondary, Ethernet1 access product line, which was highly praised by existing customers. The enterprise networking devices (Figure 1) are sold to communication service providers (CSPs), who by installing them in the premises of their clients, deliver Ethernet services to those businesses. To seek corporate buy-in he had to present a product development strategy at the upcoming corporate management business review meeting. With limited market strategy development expertise among available team members, and with his own time at a premium, he was faced with a shortage of the resources needed to research, analyse and distil broad types of market, competitor and product-level information into a clear and logical, commercial development framework.

* Names have been changed to protect client confidentiality

1 Ethernet: A family of computer networking technologies used in local area networks, enabling the quick, secure and affordable transmission of voice, video and other data.

Furthermore, to be effective the proposed Ethernet product strategy had to meet two key requirements: ! Deliver a market-driven strategic

assessment of the opportunity – Many of B-Com’s client-facing personnel have sufficient field experience to recommend new commercial opportunities for the Ethernet product line, while providing a judgment of the cost-benefit of pursuing them. However, to be persuasive, a proposed commercial strategy needed to consider more than just the viewpoints of insiders. It would have to include a range of external and objective (i.e. market-driven) opinions of stakeholders including the revenue decision-makers themselves, customers.

! Offer a complete view of a technology-

centric opportunity to a non-technical, senior audience – A proposed strategy would need to integrate a range of specific information on the Ethernet services market and its structure, the current market trends as well the existing and potential competitive advantages

Case Summary: Business IT supplier uses interim marketing expertise to create product line strategy, driving product development and marketing efforts forward

Target Audience: Small company - Business Owner, President, Head of Sales and Marketing Med & large firms - CMO / Marketing Director, Director of Product Strategy

Key Point: External marketing expertise is useful in reviewing and challenging existing product line propositions and for creating targeted, growth-driven commercial programs

B-COM'CHARTS'NEW'PRODUCT'PROPOSITIONS'&'DESIGNS'COMMERCIAL'STRATEGY'USING'INTERIM'MARKETING'EXPERTS'

CLIENT CASE STUDY

Figure 1 –Ethernet access router for businesses

B-Com 2550

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of the firm’s offerings across each of its target markets. To allow non-technical investors to easily grasp this technological context and the associated opportunities and risks, the proposal would need to be written in non-technical language, while retaining the essence of the business opportunity.

THE'SOLUTION:'DESIGN'A'PRODUCT'DEVELOPMENT'STRATEGY'USING'INTERIM'MARKETING'EXPERTISE'To assist B-Com’s CMO in delivering an Ethernet product development strategy in time for the upcoming management review, Merkado provided interim marketing expertise to create a clear, comprehensive and practical strategy for further developing the product portfolio. Developing a viable strategy meant answering two key questions: ‘Where should we play?’ and ‘How can we win?’ To do so, the strategy proposal considered several key elements: A comprehensive view of the Ethernet services

market, including descriptions of existing buyer and supplier markets and the forces at play.

An unbiased, candid assessment of the firm’s existing competitive position, from the corporate down to the product line level. This is based on information from industry analysts as well as first-hand, customer insights generated using structured, 1-on-1 interviews with existing clients.

An impartial analysis of the internal and external opportunities for further developing the product line, along with the associated risks.

An explicit description of the customer product propositions needed for B-Com to compete in selected market segments, along with the resources and programs needed to connect with its target clients in order to win their revenue.

Working in close cooperation with B-Com’s product marketing, sales and sales engineering teams, we researched, analysed and summarized these key elements, formulating our recommendations in a management report (Figure 2). We also provided a first estimate of the financial implications – the upside, the costs and the risks – of pursuing the

identified business opportunities for the different possibilities.

BUSINESS'RESULT:'PROPOSAL'DRIVES'PRODUCT'DEVELOPMENT'FORWARD'AND'ENHANCES'CUSTOMER'MARKETING'Delivered to meet the CMO’s tight schedule, the product strategy proposal contained various product development recommendations around: Further developing the Ethernet product line’s

ability to handle a growing range of higher bandwidth data services that businesses expect.

Accelerating the shift to a common platform across product lines in order to control manufacturing costs and help maintain a competitive pricing structure.

The proposal also offered suggestions for various commercial programs aimed at raising client awareness and interest in the firm’s offers, such as: Promoting the overall cost control benefits

offered by the firm’s Ethernet products. By addressing this important topic B-Com can appeal to CSP Business Planning and Purchasing teams, their clients’ decision-makers and buyers.

Raising awareness of the B-Com’ custom production capabilities. Highlighting the ability to offer tailored products is of great interest to

Figure 2 – Strategy proposal for product development

!!!!!!!!!

Ethernet'Access'Device'Business'How!to!create!€40M!in!EAD!revenue!by!2015!!

December!2011!!!!!!!!!!!!!!!!!!

FOUR?YEAR!STRATEGIC!PLAN!

B-Com Systems

!

EAD!4?Year!Strategic!Plan,!Dec!2011! 17!

Fibre)EAD)Competitive)Landscape)Similarly,!by!looking!at!the!Fibre!segment!we!have!identified!the!following!distinct!factors!used!in!different!way!by!the!various!players,!and!against!which!OneAccess!will!need!to!compete!for!its!Fibre!offer.!!

1. Brand'Leadership!?!Reputation,!early!to!market,!installed!base!2. Network' aggregation! ?! Aggregation! device! to! connect! to! transport! networks,!

offers!end?to?end!monitoring,!can!perform!service!aggregation!3. Technology' Leadership! ?! Innovation,! Patents,! Standards! Forums! (BB! Forum,!

MEF,!IEEE...),!User!Groups!(ITSA),!Interest!Groups!(Transport)!4. Markets' Addressed! ?! Operator! Applications! (Business,! Wholesale,! Mobile!

Backhaul,! Utilities,! Government),! Network! Migration! Scenarios! (TDM! ?>! Packet?based!NGN:!Ethernet/TDM,!TDM/Ethernet,!Ethernet)!

5. Channel' Partners! ?! OEM! agreement! w.! equipment! vendors,! Local! presence,!logistics!support,!L1!&!L2!support!

6. Product'Quality!?!Ability!to!deliver!on!features,!MTBF!7. Optimized' CPEs! ?! Right! combination! of! HW! &! SW! for! service! offered! (Service!

speeds!?!100M,!1G,!10G;!SLAs)!8. TCO' Reduction! ?! Low! CPE! purchase! price;! Easy,! scalable! end?customer!

deployment!(Factory!pre?configuration,!zero?touch!provisioning,!provisioning!std!support!(ex.!TR69);!performance!measurements!

!Plotting! each! of! the! Fibre! player’s! offerings! shows! the! relative! strengths! and!weaknesses!of!each.!

!ADVA’s!market!leadership!has!helped!it!establish!a!leading!Fibre!brand!thanks!to!its! history! of! success! and! large! installed! base,! including! contracts! with! leading!service! providers! (ex.! BT).! It! also! offers! a! large! range! of! operator! and! vertical!market!solutions!(ex.!business,!mobile!backhaul,!data!centre!connectivity),!which!are! successfully! commercialized! through! its! own!worldwide!presents! and!via! its!65! global! resellers! and! technology! partners! and! OEM! agreements! with! leading!network!equipment!vendors!(ex.!Juniper,!Fujitsu).!!!

!

EAD!4?Year!Strategic!Plan,!Dec!2011! 10!

Service)Provider)Market)To!assess!the!opportunities!at!hand!for!further!investing!in!the!EAD!business!it!is!essential!to!gauge!the!expected!investment!level!of!the!primary!buyers!themselves,!Service!Providers.!!Service)Provider)EAD)Spending)In! Ovum’s! analysis! of! global! Service! Provider! spending! (from! ‘Carrier! Ethernet!Equipment:! What’s!new’)! they!demonstrate! showing!that! after! 8! straight!quarters! of! CAPEX!reductions,! Service!Provides! have!increase! spending!significantly! in! 2011.!While! a! low! 2010!baseline! and! the! US$!depreciation! are!factors,! more!importantly! this!trends! reflects! an!increased! confidence!in!the!economic!recovery!and!need!for!new!network!infrastructure.!!To!examine!Service!Providers’!global!spending!on! the!EAD!segment! in!particular!we! can! consider! Infonetics$ Research’s! ‘Carrier! Ethernet! Equipment!Market! Share!and!Market!Forecasts’!(Apr!2011).!!!Analyzing!this!market!forecasts!we!see!that!global'service'provider'spending'on'EADs!is!expected!to!grow'at'+17%'CAGR,!reaching!US$1.5B''(€1.1B1)'by'2015.!!!At! nearly! 2/3'of' total'spending,!Fibre'EAD!will!grow! at! just!over! the!market! rate! to!make! up! the!bulk' of' new'investments;!while! EFM'bonded'copper!products! will!grow!at!21%'CAGR!to!make!up!1/4'of'the'total.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1!Exchange!rate:!1.35!US$/€!

Source: Ovum, Dec 2011

Source: Infonetics, Apr 2011

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CSP Business Device Managers who must match product supply with end-clients’ demands.

Providing end-customer marketing material on today’s important, Ethernet-powered business applications (e.g. Tele-presence, high-definition video, Secure and reliable software-as-a-service access). By helping CSP Product Marketing Managers sell better to their end-clients, B-Com can gain the support of this key client influencer.

The product development strategy was presented at the management review meeting, and shortly thereafter to the investors board. As a result, several key decisions where taken concerning the evolution of the platform and on related market programs. Greater focus has also been placed on better adapting and communicating the Ethernet value proposition to each client.

According to the B-Com, Senior Product Marketing Manager:

”The work done on the product line strategy has allowed me to create a better product positioning, which we are using successfully today.”

Despite a highly competitive market, the product line has continued to generate year-on-year, double-digit growth, while maintaining margins levels 10-15 % higher than the market. Client satisfaction has also remained high, reflecting the company’s on-going commitment to satisfying its customers’ evolving needs.

RECOMMENDATIONS'FOR'TECHNOLOGY'COMPANIES' 1. Today’s winning technology strategies are driven by a strong marketing focus – Previously,

tech-based companies could gain a strategic, competitive advantage by focusing on developing superior upstream capabilities (e.g. sourcing, manufacturing, R&D and distribution). Today, as a result of standardization, contract manufacturing, open collaborative networks and low-cost physical and digital distribution, such capabilities are accessible to all types of firms. To create a competitive advantage, today’s tech companies must instead focus on improving their downstream activities, namely finding better ways to serve clients. This requires gaining deeper insights into customers’ needs (e.g. through joint marketing programs and by analyzing client data); focusing on reducing customer costs and risks (e.g. designing platform-based offers that easily adapt to each client’s specific needs), and developing stronger client relationships to build trust and to jointly anticipate new solutions to their emerging needs.

2. Indirect sell ing requires targeted, well-designed channel marketing programs – To

successfully commercialize products using an indirect sales model, B2B tech companies must first develop an in-depth understanding of their direct clients’ needs, as well as the needs of their clients’ own end-customers. Mapping and characterizing clients’ decision-making units (i.e. influencers, decision-makers and buyers) will help B2B companies focus their communication and sales efforts on properly persuading, motivating, training and supporting key client stakeholders with their distinct needs, throughout their investment decision cycle.

3. To thrive, tech companies of al l s izes need to constantly (re-)examine and review their

product strategies – Both start-ups and established, growing firms must constantly be on the lookout for new and unique ways to satisfy their customers’ evolving needs, while generating new growth. This requires constantly challenging ideas about existing product offerings and related go-to-market strategies in light of new technology, emerging business models, changing customer demands and new competitive offerings.

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About Merkado Merkado helps technology companies create customer value and business growth through our practical and integrated go-to-market solutions. From market opportunity evaluation to strategic sales support, we deliver a full range of go-to-market advice, assistance and methods, combining proven, international experience with a first-hand understanding of the latest consumer and business technology trends.

Contact Us To see how Merkado can assist your organization please contact: Juan Carlos Sanchez Managing Director jcsanchez@merkadoservice.com For more information visit: www.merkadoservices.com Merkado SAS 10 rue de Vouillé 75015, Paris France

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