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06 March 2012

Meraki - Cloud Managed Networking

Every now and then we stumble upon new products, whether they are software or hardware products, social networks or networking gears. And the beauty of writing about those products is that they help you understand marketing strategies by example.

Niche Marketing & Market Segmentation

Before going into more details about Meraki and their Cloud-Managed network products, let me first introduce you to "Market Segmentation" as it was described by Laura Lake here.

Market segmentation is one of the steps that goes into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes. A key factor to success in today's market place is finding subtle differences to give a business the marketing edge. Businesses that target speciality markets will promote its products and services more effectively than a business aiming at the "average" customer.

Trying to sell product to everyone might look a good thing, but in fact it isn't. Selling your product to everyone means adding features to cover the needs of everyone, and you will definitely fail in designing a product to meet everyone's needs, or at least you will excel more if you focus on the needs of a homogeneous segment of the market. Also identifying and targeting a niche market will make it easier for you to tailor a Marketing Message specifically for such niche. Beyond Niche Marketing summarized the strategy for niche marketing in the following three steps.

1- Identifying the niche
2- Identifying the problems experienced by this audience
3- Communicating the solution your product/services offers for the problems being experienced by the niche audience.

Meraki's Cloud Managed Networking

Now let's go back to Meraki. Meraki is cloud networking company based in San Francisco, California. Initially they were making Wireless Access Points and recently they added Switches and Security Appliances (They don’t call them Firewalls/UTMs). Their selling point is that their devices are Managed from the Cloud. I.e. You get a Switch or Access Point from them, install it, and then log in to a portal in *their* Data Centre to manage your own Switch or Access point.

Their Marketing Message is that this approach simplifies the management process. And to understand their message more, let's see who are their possible market segment, which is somehow clear also in the case studies mentioned in their marketing materials and videos. It's clear that they are selling mainly to SMB’s or enterprises with big number of scattered offices. Take a coffee chain like Starbucks for example, they have coffee shops in different places, and they are normally not connected to each other, so having them all managed from the cloud makes life easier for their small IT staff. This is different from a Bank for example, where they have bigger IT team and they normally have a LAN connecting all their branches. In the Bank example, they probably will prefer to have on-premises management and they have no problem having some IT engineers in each branch, and now with the consolidation trend they might have all their servers in their headquarters. For the Coffee Shop Chain example, they probably on the other hand don't want to have an IT engineer in each of their Coffee Shops, they want to minimize their IT budget as much as possible, so they have no problem sacrificing having their networks management and provisioning software on-premises and have them installed and maintained by the vendor in the cloud instead.

You can see Meraki sales model clearly in their product-line. For example when it comes to the switches, they only have edge 24- and 48-ports switches, no backbone or data centre switches. And for the Security Appliances (Firewall/UTM/Wan Optimization/Link Load Sharing) they range from 100 Mbps to 2Gbps Firewall Throughput, which again is Branch Office numbers according to today’s standards. They are also having features tailored for such market segment such as automatic software updates for the networking products over the air. They make it easier to profile the connected users based on their mac addresses and fingerprints, so you know this is an iPad connected to the network and that one is the Windows PC you run your vending software on

It's clear that knowing their niche market helped them tailoring their marketing materials, message and product-line. And that's why when I try to understand what a company does from a pre-sales point of view, I see first what is their market niche, based on their message, and then it's easier for me to get a better understanding for what features to look for in their products, how to compare them with their competitors, etc.