Network Physics Turns All-Channel Strategy on MidmarketBy Pedro Pereira | Posted 2006-01-31 Email Print
The network diagnostics vendor brings its enterprise-level technology to the midmarket and calls on channel partners to reach customers.Network diagnostics vendor Network Physics is making a play for midmarket companies and wants channel partners to lead the way.
The vendor in the last week of January released a version of its network-assessment appliance targeted specifically at midsize companies. The NP-2000 NetSensory Professional appliance costs $9,995 and contains technology previously available only to enterprise environments.
To reach midsize customers, Network Physics is counting on its existing base of channel partners while actively recruiting new ones. The company last fall made a dramatic shift in its go-to-market strategy, reassigning its direct sales force to partner-supporting roles and making a commitment to move 100 percent of its business through the channel.
Because they have small IT staffs, midmarket companies tend to rely on VARs and integrators for some or most of their IT needs. With that in mind, the vendor concluded it would make sense to strengthen its channel commitment as it was readying its midmarket solution.
Frerichs said he recognized that companies with direct-selling strategies at some point hit a limit in terms of how much of the market they can reach.
Frerichs, who joined the company four months ago, said partner feedback played a major role in the company's decisions. He said he determined from the feedback that the midmarket has a need for the kind of diagnostic technology Network Physics offers, but the price points were too high.
Teré Bracco, vice president of channel strategies at San Diego-based market research firm Current Analysis, said midmarket demand is strong and growing.
"The demand is being driven by new, and not always that well understood, data network applications that affect existing applications," Bracco said, citing packet voice and contact center applications that affect existing CRM (customer relationship management) applications.
"As application-oriented voice and contact center solutions become more widely used in the midmarket, comprehensive performance monitoring becomes more critical for that market," she said.
Network Physics' NetSensory technology tackles the pervasive problem of network performance degradation. Through thorough assessments, the tool collects real-time and historical information about performance to help speed application response time and pinpoint network security issues.
The NP-2000 features a point-and-click interface and so-called "Insights," XML-based windows that give users access to best-practices guides for resolving application performance problems.
Steve Marks, president of VAR Starnet Data Design, said he expects midsize companies will be receptive to the NP-2000. These companies need technology that can enhance the user experience but have not had access to network diagnostics tools they can afford, he said.
"For the right customer, it's going to be very well received," he said.
Marks said he hooked up with Network Physics last fall after Starnet decided to get into network optimization services. The VAR has been using the technology in-house and is getting ready to pitch to a couple of customers, he said.
Starnet became a Network Physics partner just as the vendor was making the switch to an all-channel model, so the timing was perfect.
The all-channel strategy, Bracco said, will go a long way toward winning credibility with partners.
"By definition, this removes any conflict with the channel. And because the channel's No. 1 area of interest is high-margin service opportunities, this move will make Network Physics doubly popular," she said.
Network Physics executives said the NP-2000 essentially provides the same service as the enterprise-level solution, but it is packaged to be delivered and serviced by channel partners, who can customize it to meet specific customer needs. The solution is easy to install and scalable, said Scott Safe, the company's vice president of marketing.
"The product can easily be upgraded to the enterprise version. For the VAR, it's just a license key upgrade," he said.