Finding Niches

I want to brag about a client of our for something they did on their own (kinda).

We have had a relationship with Open-Xchange since our days advising SuSE Linux on their North American marketing strategy. Open-Xchange is groupware with highly usable features uncommon in other groupware offerings and with all components well integrated to make collaboration dirt easy. I routinely recommend the product to everyone I meet.

Like many companies they started by selling on-site server software and had a tough time of it. Going toe-toe-toe with the likes of Microsoft Exchange, Novell Groupwise and Lotus Notes is no easy feat. Despite a better over-all design and vastly better usability, Open-Xchange did not find the huge adoption it deserved.

This was in part because the high end of the market was saturated. Online collaboration was recognized by top enterprises as a necessary tool. Thus the installed base was dominated by the market’s gorillas by the time Open-Xchange was whelped, much less by when it was refined and differentiated. While SuSE as a reseller, we devised what wedges we could into the established enterprise markets, but recognized and advised Open-Xchange that the down market was their mid-term objective.

The problem is that the SMB market is running away from self-managed IT faster than Rodney King from an LA Police officer. Whenever possible SMB customers are opting for managed services. I can’t blame them — here at Silicon Strategies Marketing we outsource everything IT. In fact we regretted not being able to use Open-Xchange ourselves due to the inability of our hosting service to provide a Java servers.

So Open-Xchange made the decision a while back to make a SaaS version of the product, offering it to Internet service providers (ISPs) and hosting companies as a value-add to their customers. In other words, they found a relatively unexploited niche for addressing the needs of SMBs through partnership.

Their strategy is working.

This month you can acquire Open-Xchange via the largest of hosting services fronting in North America, that being 1and1. Unfortunately it has been re-branded as MailExchange, though Open-Xchange did receive some on-page branding rights. frankly, “MailExchange” short-sells the capabilities of the product.

Many things make Open-Xchange’s revised strategy work:

  • It provides outsourced services to SMBs, the sector of the market where current strong demand and lack of an installed base exists.
  • It provides the solution in the form that target buyers (SMBs) want to acquire – as an outsourced service.
  • It gets 1and1 and other hosting companies to do the heavy sales work.
  • It gets the product and brand to the public in the most direct way possible.

The marketing lesson herein is that knowing and serving the available/addressable market — the market not saturated by gorillas — is critical to making traction. Open-Xchange identified and created products for that market, and deserves kudos and success for doing so.


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