Vertical take-off

To achieve any kind of penetration into vertical sectors, partnerships are essential and VAR recruitment critical

When IBM announced at the end of last year that it planned to refocus and realign its entire software division around vertical markets, it was the subject of a few sideways glances.

Changing the mindset and model of a firm with 20,000 software engineers - not to mention 90,000 business partners - is not something that should be taken lightly.

Having been focused for so long around technology groups, a model that raised IBM to where it is today, why would it want to change?

With hindsight it's now fairly easy to see that the company was in fact leading the market. Just like Lou Gerstner, the former Big Blue chief executive who correctly predicted the services boom, IBM appears to have looked into its crystal ball or paid a visit to Mystic Meg, and its move is already paying dividends.

In March analysts started reporting that IT spending was set to rise, and that this would be most keenly felt in vertical markets.

IDC, for example, said that spending in banking, retail and manufacturing would be up, but only if a true cost of ownership and knowledge of customers' businesses could be demonstrated.

Now other vendors have started to follow suit. Sage, for example, announced last week that it is going to look to increase the number of vertical resellers it has, and intends to snap up any software house with the right vertical software.

And Steve Raymund, chief executive of Tech Data, told CRN this week that this is where he is putting his money.

But while this kind of business model is suitable for the industry's behemoths, it is not always feasible or appropriate for the smaller company.

These giants are adapting because end-users are tired of bland IT solutions that neither fit what they need nor help their businesses, and they are seeking help from firms that actually have an understanding of their requirements.

This is why, when predicting an upturn in vertical spending, one analyst at IDC said that to achieve any kind of penetration into vertical sectors, partnerships are essential and VAR recruitment critical.