IDC Survey Uncovers Biggest Challenges IT Suppliers Face in Executing Industry-Specific Strategies

FRAMINGHAM, MA – MAY 16, 2007 – Lack of industry expertise in sales and marketing, along with a shortage of internal funding top the list of problems IT suppliers face in implementing industry-specific or "vertical" strategies, according to a new survey conducted by IDC. The survey presents findings from interviews with 100 executives responsible for the industry practices at various IT supply firms. Of the executives interviewed, sixty-seven percent (67%) feel their organization doesn't do enough to train the sales force on industry issues, and sixty-one percent (61%) state that their marketing personnel don't have enough industry experience.

"Implementing vertical strategies comes with a host of challenges that touch on multiple parts of the organization," says Meredith Whalen, group vice president and general manager, IDC Vertical Business Units. "To make headway on these challenges, it is critical to understand which challenges are within your sphere of influence. IDC believes the lower-hanging fruit is around maximizing marketing and sales investments."

The study shows that marketing dollars are being spent ineffectively. One-third of the respondents (33%) indicate that the creation of industry marketing materials mainly consists of putting an industry front end on existing marketing collateral to tailor it for industry, while only nineteen percent (19%) indicate they develop actual thought leadership pieces to demonstrate their industry expertise. IDC believes the latter to be the most valuable types of marketing collateral.

According to the survey, IT suppliers rate industry-specific case studies and cost savings/ROI tools as the most effective tools in their sales activities. Although better and more focused sales force training is an obvious first step to rectifying the situation, arming the sales force with the most effective sales tools will also help to address the problem.

Other top challenges outlined in the study include the following:

— Sixty-five percent (65%) of respondents note that their company doesn't have the appropriate organizational structure in place to support a vertical strategy.

— Of the executives interviewed, sixty-one percent (61%) agree there is no formalized feedback loop to capture industry-specific product needs.

— Fifty-eight percent (58%) acknowledge that requests for horizontal technology products take precedence over industry-specific requests. The same percentage also states that their organization doesn't have the appropriate partners to make inroads into vertical accounts.

— Fifty-six percent (56%) agree that their company's marketing message centers too much around product and not enough around industry business issues.

These survey findings and more are covered in IDC's Vertical Strategy Leadership Study (IDC #206246), which presents data collected from interviews with 100 industry-based executives at IT firms within the United States. The study focuses on the drivers behind the most prominent business challenges associated with implementing industry-based business strategies and offers actionable advice on how to improve upon these areas.

NOTE TO EDITORS: Any data reported from this survey must be sourced as originating from "IDC."

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com .

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