The Rise and Reign of Verticalization

Have we reached the age of requiring integrators to become even more vertically focused?

Daniel Newman

This past month, Commercial Integrator conducted a report on the best integrators by vertical market.

This fascinating in depth column took a new approach to ranking and evaluating the work of integrators by looking into their work for how they serve a particular market rather than how large or small their business is.

As a whole, I never loved the idea of ranking integrators because the industry is entirely private and while certain visible perceptions may have validated the data provided by integrators, it is somewhat a known entity that the numbers can be “glorified” to make the companies appear bigger.

With the launch of this new vertical focused analysis, it got me thinking about commercial integration and the role of the integrator as a whole.

Historically, the majority of integrators are what I would call “full service” in that they really work with clients of all types. Education, corporate, government, retail and so on and so forth. And up until now, by in large they have been able to get away with this as the technology needs that most integrators fulfill are somewhat simplistic and not necessarily core business assets. No matter how much we want them to be.

Related: Industry Leaders in 12 Vertical Markets

Until recently, with the emergence of technologies like streaming, digital signage and mobile collaboration, which are now displacing the way companies do business. With this shift the role of the integrator is changing from being the providers of technologies that are nice to have, to providing solutions that they must have. Begging the question, have we reached the age of requiring integrators to become even more verticalized?

The Rise of Verticalization – New, Kind of!

Before anyone decides to correct my choice of words, I do realize that verticalization, much like another of my favorite words, consumerization, is not a real word. However, the idea of vertically specializing your business is a real one and it isn’t necessarily new, but as far as most mainstream integrators are concerned it is a different way of thinking.

The first great examples of core vertical focus for AV integration were in the medical endoscopy field. For more than a decade companies like Stryker, and Smith and Nephew who were known largely for their medical expertise had units 100% dedicated to control, switching and automation in the operating room.

Related: Talking Mannequins, Surgical Simulation in Healthcare Market

Another field where I have witnessed extensive vertical focus has been in retail and digital signage. If you look at many of the companies doing massive signage deployments they are not traditional commercial integrators but companies that have business units if not an entire entity dedicated 100% to serving signage. In some cases companies have actually built their signage businesses around the service and have only figured out how to equip and integrate later as customers began to demand the capability.

To a lesser extent, companies have verticalized around the markets they serve based on location and revenue, but by in large, their loyalty and commitment to the vertical is only as strong as the immediacy of the business they have in house.

Nevertheless, vertical focus isn’t new, but it is something businesses need to think more about.

Integrators Have to Focus, More Than Ever

As I mentioned above, the importance of the solutions being deployed by integrators is more important than ever before. No longer a peripheral, things like communications is core to a business and if their collaboration tools are down, it is almost as bad as having their accounting or CRM crash.

However, with all of this in mind, most integrators are still incredibly focused on being extremely wide with their offerings rather than being deep within a vertical.

To some extend I think the “Wide” approach is a safer play, however, I also think this may to some extent be what most limits the greater expansion of an integrator. By being so wide they are a jack of many trades, but a master of none.

If you look at many of the greatest companies in the world they were extraordinary at one thing long before they became bigger, deeper or wider. And if they chose width as their one thing, then what they sold was often quite limited.

The bottom line is that the channel, the products and the solutions are all changing. The question is, do we need to change our approach and could stronger focus on verticalization be one of the means to growth that many integrators haven’t considered in the past?

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About the Author

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I am a principal analyst of Futurum Research and CEO of Broadsuite Media Group. I spend my time researching, analyzing and providing the world’s best and brightest companies with insights as to how digital transformation, disruption, innovation and the experience economy are changing how business is done. Bringing together the technology layer with the human layer, I seek to solve the biggest challenges that companies have today; how to grow, scale, change and adapt to a world where technology and media shift at breakneck speed. So what does this mean? It means that I spend my life learning about what drives people to adopt new technology so I can share those secrets with companies that are ready to take their business to the next level. From keynoting on the world’s largest stages to weekly insights on Forbes, MarketWatch and our owned media properties, my goal is to provide our clients with what they need to know to out innovate and turn disruption from threat, into a business model for success.

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