In the first part of an in-depth interview with ARN's NADIA CAMERON, D-Link managing director, Domenic Torre, talks about how it has grown its product line-up and partner programs to address the business market.
Q: Can you give us a heads-up on D-Link's product roadmap and direction over the next two years?
Realistically, our direction for the next 12-24 months started 18 months ago. We are only now starting to see the fruits of our labour. We have traditionally been very strong in the consumer world, and in the telco/ISP space with CPE equipment, but as sales volumes increased, the average selling price is also decreasing. It's not that we don't want that business - we continue to push in those spaces - but we need to refocus as an organisation and get back to our roots. We were always in the business sector. We grabbed the consumer opportunities when they were there because no one was servicing that space very well. Because of our manufacturing capabilities, we were in a good position to reduce price points down to an affordable level for consumers. That's why we have been so successful in the mass merchant/retail space. And the same goes for broadband with our ADSL products: we were there, we invested and developed products when our competitors were not putting in the effort. We made a lot of money in those days but today it's dog eat dog.
So we started focusing on getting our back-end right to genuinely challenge those in SMB. There were lots of holes we had to plug and product was one of those. For example, we didn't have a good enough firewall security offering, so we plugged that hole with our NetDefend range. We plugged a major hole in our switch range with the xStack products. What we have learnt over the last 12 months is that we might have aimed too high. The product has too many features for our customer sweet spot [SMB or 50-200 seats] and caters for much larger networks, which made it a little too expensive. We ended up with a double-edged sword where we're trying to compete with Cisco at an enterprise level, but didn't have the reputation of providing that kind of product yet. So in the last six months we have developed a number of entry-level managed switch products catering specifically for cost-conscious SMBs.
Our challenge today is differentiating between consumer and business. Many business users still recognise D-Link in the consumer world and they purchase the cheapest product in our portfolio and try to run their business off it, only to find it doesn't quite cut the mustard. It's a consumer product for a reason: you cut down the features because if you have too many your consumer can't configure it and that only causes us problems when it comes to support.
Q: What other elements of the business have you had to review?
Another area was services and support. With the escalation of the consumer market, our back-end technical support struggled. We have spent a lot of time developing the right CRM system, and we now track every single call that comes in. Knowing that we want to push into the corporate space, we have to double efforts and get the right support people on-board. We're on a recruitment drive right now and employing pre-sales engineers across the country. We have people already in Queensland and Melbourne and have a pool of second-level engineers in our Sydney head office.
The last bastion was to have a suitable partner program for system integrators. I laugh at comments made by our competitors about signing up 1000+ resellers. Big deal. They are signed up to receive marketing materials. Our partner program is about engaging with the partners and providing them with the tools they require to provide competent services to their customers. This could be providing lead generation, access to some of the sales information we have access to and putting together programs that are specific to an individual. We have a framework and a memorandum of understanding in place and a target of 5-6 system integrators per state that are pushing our solutions.
To tie in with this change in focus, the image of our company is also changing. We are separating our logistics and RMA centre from our new corporate office, which we move into in October. Today we look more like a distribution company, but in our new corporate centre we will have a semi-live technology centre including a number of other vendor products such as APC, Toshiba and Bullguard.
Our core business has always been switching, wireless and to a lesser degree, firewall and security products. It will continue to be our core business, but there are more and more products coming out that will fill certain niches. Storage is growing, and we already have a low-end SMB solution which will be complemented with another NAS product ideal for SMBs. We also have SAN products and14-bay hot pluggable drive solutions with 10GB on the desktop, which will compete with EMC and the like.
Q: When will those products be available?
We have the products now, I just choose not to introduce them in Australia because I don't think we're ready to sell it. We are using it internally ourselves and the US has been selling various products for some time. Storage solutions will be very big for D-Link as we progress. We want to be known as an organisation that provides complete solutions. That includes storage as well as other technologies like VoIP. That's been a weakness for us in recent times - we have consumer product, but not something suitable to run a business on. But it's coming.