Who Wins as the Economy Tanks?

Some companies do well during recessions. VARBusiness listed dozens that are gaining during the current downturn. Who are they? Hint: they’re not the dominant player in their markets. They are the lesser known vendors which offer better price/performance than the number one company does. With higher energy and other costs pressuring organizations to find savings, buyers are more receptive to considering alternatives that save their employers’ money or fit tighter budgets.

VARBusiness, in its February 2008 cover article, “Attack of the Alternatives,” quoted Matt Medeiros, president and CEO of SonicWall Inc. which competes against Cisco in network security products. “Medeiros points to a nearly $1 million, multiyear deal with a semiconductor company that pitted SonicWall and one of its partners against a Cisco offering in a Cisco-dominated IT network environment. The SonicWall solution not only came in at a substantially lower price, but also was ‘easier to use and manage across the large-scale network,’ he said. ‘They truly looked at total cost of ownership and we won hands down,’ said Medeiros. ‘Given the current economic trends in North America with budgets being tightened, the CIO felt that he absolutely had to consider an alternative and that is how we got brought to the party. It was an absolute Cisco environment.’”

Does your organization compete against an entrenched dominate player? Consider turning up your price/performance message and sales resources to capture new opportunities. Conversely, if your firm is a dominant player, research how your competitors will seek to take advantage of the soft economy and develop tactics to counter them.