commentary It is tempting when you offer a good service to keep expanding and adding more services, but at what point does it get out of hand?
It seems everyone is trying to be a one-stop-shop. I can think of many IT vendors off the top of my head that are trying to be all things to all people. Think of HP and its range of products and services, from cheap photo printers aiming at the home user to high-end servers for very large business. Not content with selling printers, servers, and a range of other hardware, it now also wants to become a document management vendor, with its own solutions and software competing with companies already established in this market.
IBM is similar offering a dazzling array of hardware and software, as well as a consulting arm. When I think of customer relationship management software I don't think of IBM, but there it is, on its (long) list of software products. The storage industry is also a good example -- not content with offering storage boxes, the vendors are now partnering with myriad other companies to become that one-stop-shop, all in the name of "information lifecycle management". Intel is doing it too, famous for its chips (kind of like McDonald's but more expensive), it is marketing itself as a solutions provider, with business strategy solutions and a consulting division.
Speaking of McDonald's, it also is a good example having undergone many changes in the hope of attracting new customers. It used to sell fried chicken, but in the late '80s it decided to leave that to KFC and dropped it from the menu. In the '90s there was a take up in healthy eating and the burger company added grilled chicken to the menu. So far in this century, Maccas has also added a range of salads and, more recently, wireless access. The only items it seems to be missing are health shakes and mobile phones. (I was going to add sushi, the fast food of the moment, but the thought of McDonald's handling raw fish is just too scary.)
The idea of the one-stop-shop is born from the idea of making sure your customer doesn't have to leave your store. McDonald's may have it right, unless they get the bright idea to offer cooking classes, but I am unsure about Intel and various storage providers. The value of going to these vendors for solutions that aren't really their core competency I think is uncertain. Time will tell.
However one possible success in the trend of one-stop-shoppers that I see coming up is in the broadband market. Pacific Internet recently conducted a survey on the use of broadband in the small business sector. While businesses are enjoying the benefits of an always-on connection, they are unprepared for the security concerns that go hand in hand with that.
Regarding broadband, the survey showed small businesses were mainly concerned about security and spam -- the two rated higher on the list of concerns than cost and reliability of the service. However, only 48 percent of respondents use a spam filter, and more than 20 percent aren't using a firewall or any network security.
Dennis Muscat, managing director Pacific Internet, says ISPs are becoming a technology hub for small businesses. If the modem isn't working, the consumer is more likely to ring their ISP rather than the modem manufacturer, he says.
ACNielsen Consult also conducts research into Internet use. According to analyst Andrew Tolputt, in a recent ACNielsen survey, respondents said they expect ISPs to provice some sort of antivirus and spam-filtering services. Maybe this is a sign to all the ISPs that are are currently struggling to prove the advantage of a business broadband plan over a residential plan.
Pacific Internet's research showed 41 percent of respondents were using a residential broadband plan for their business. The service level agreements and priority customer service so far haven't swayed customers to convert to business plans. With the current pricing war going on, it will only become harder for ISPs to make those conversions. Maybe the added services of antivirus and spam filtering will provide the differentiation these business plans need and could end up being an example of a one-stop-shop success.
Of course, maybe trusting part of your company's security with your ISP is a recipe for disaster. Is the ISP with antivirus and spam-filtering marketing genius or another example of expansion gone too far?
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This article was first published in Technology & Business magazine.
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