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Data centers is a business. But we don’t always know how to sell it

Marketing may not be the first thing on a data center operator’s mind, but it could be make or break for the business. Yet surprisingly, the sector is rife with errors and poorly conceived tactics.

Consider one service provider that decided to target the financial sector. All the research stated that banks had a great need for data center services, so the operator set up a team for the sector, hired specialist sales people, and waited for the sales to roll in. In such a demanding sector, it realized that sales cycles would be long, but after six months, there was no business being signed, so the company decided to see if there was a problem.

sandwich board market5ing right thinkstock

Source: Thinkstock

Unqualified for the market

Calling in a third party, the operator got feedback on some of the contracts it had failed to win, and found a shocking truth: the potential customers liked the data center, but they were simply unable to use it because it did not have the certifications required by the financial services industry. Six months of sales work had been completely wasted, as the operator was selling to a market it was not qualified to serve.

That story is not unusual, says Nicola Hayes of Andrasta Consulting. But it’s not the only problem. As well as focusing on the wrong market, she also sees a complete lack of focus. “A huge number of providers, when asked who they are targeting, still say ‘everyone,’” she told the recent DCD As-a-Service conference in Chicago. This results in sales teams firing off responses to requests for proposals (RFPs) they would never have a chance of winning, and having nothing distinctive to offer those they might be eligible to win.

Find your customers

Success boils down to finding a group of customers whose needs match what you can provide, she says, and then communicating well with that prospective customer base.

That may sound obvious, but it needs saying. Companies in the data center space tend to focus on the technology, create what they see is a market-leading facility, and then rely on the “if you build it, they will come” mantra. “The companies I deal with had nothing to direct them when it came to strategic business planning,” she said. “Decisions taken were based on what had worked in the past – but the industry is changing.”

Nicola Hayes, Andrasta Consulting

Nocola Hayes, DCD as-a-service, Chicago

Source: Peter Judge

A big part of that change is a shift in power, from the vendor to the customer, she says. Colocation firms used to have sales teams that were little more than “order takers”, whose main job was to convince customers that colocation offered an improvement over in-house facilities. “That challenge has been dramatically reduced, with outsourcing an accepted option now,” she said.

The challenge now is to stand out among the many providers addressing the increased market, and this is a tough prospect when the web now provides a well-developed channel for information. Vendors used to be in touch with customers who were just finding out about what was on offer. Now customers are well educated before they make any contact with the vendor.

“This increased competition means it is vital that you understand exactly which buttons to press,” she said, “and the approach will depend on what type of customer you are addressing.” Once you know your customer, you need to have an understanding of how many people are actually involved in the decision-making, and how the decisions are made at each stage.”

A huge number of providers, when asked who they are targeting, still say ‘everyone’  

Nicola Hayes, Andrasta Consulting

Perhaps surprisingly, the big outfits such as Google and Amazon can be the most personal: “They have dedicated specialist purchasing departments for IT infrastructure, and vendors have access to these people,” she said. “They aren’t faceless people sitting in the Far East; they understand what it is they’re buying.”

The size of the customer makes a difference. The larger the company, the more people will be involved in the decision chain. In a multinational, the chain ends up at the purchasing department, while a single senior staff member will make the decision at SMBs. Smaller companies are more price conscious, while the larger operations will want to know that you have a solid financial record and are not likely to go bust any time soon.

sandwich board thinkstock markeitng left

sandwich board thinkstock markeitng left

Source: Thinkstock

Understand them

And, finally, an obvious part of marketing is to make sure your offer matches what customers want. Customers aren’t happy to sign long static leases, and some vertical markets want more than just managed networks. “Customers have different needs,” said Hayes. “Many want more visibility into their operations beyond basic monitoring. Media companies want low latency and edge network capacity, while highly regulated industries such as finance and pharma want increased security measures.”

This article appeared in the December 2015 issue of DatacenterDynamics magazine

 

 Large enterprises (international)Mid-size enterprisesSMBs
Purchasing chain Large (5+) Depends on the type of business (2-5) Small (1-3)
Access Difficult Depends on the type of business Easy
Final decision Will eventually end up with dedicated purchasing department, often generalists The final decision is usually taken by the CFO This is taken by a senior member of the company
Culture Only use providers with strong financial background Decision driven by price versus benefits More price sensitive (but depends on the type of business)
Priority Brand is increasingly important Network access a high priority Interested in providers with a managed colocation offering

Decision making mindset

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