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General Information
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July 6, 2007
• Vol.29 Issue 27
Page(s) 27 in print issue
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Adding New Products & Shifting Sales Strategy
TRENDnet Is Changing How Networking Equipment Is Sold In The Enterprise
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 Everyone is familiar with the big names in enterprise networking equipment, from Cisco to 3Com to Nortel. These names ring a bell from the support personnel in the field to the IT managers making the purchasing decisions. There are other companies out there selling enterprise-class networking equipment, as well, such as Netgear, D-Link, and SMC. However, there is another company out there serving the enterprise networking market.
Since its inception in 1990, TRENDnet (www.Processor.com/TRENDnet-Inc) has adapted to meet changing market demands. Initially, its focus was fiber and KVM switches, but now its product portfolio has diversified to include an assortment of 225 items, including wireless, switch, VoIP, gigabit, fiber, Power over Ethernet, storage server, print server, KVM, and adapters. Its market focus is about 40% consumer and 60% enterprise.
 Current State Of The Art
TRENDnet seems to understand that knowing your competition is only part of the equation. In the business of selling enterprise network equipment, you have to watch your customers, as well, to gather the kind of information it takes to successfully drive sales up and keep the sales rates growing. What exactly does this mean, in practice? A variety of reasons is behind the phenomenon, but IT managers tend to buy networking equipment from the same VARs (value-added resellers), mainly to avoid finger-pointing down the road if something goes wrong. VARs also tend to stick with using parts from the same manufacturers instead of mixing and matching parts with the best specs, to keep interoperability concerns to a minimum and make the installations go easier.
Sonny Su, technology director at TRENDnet, says, “What we discovered is that VARs often prefer to stick with one brand due to a variety of reasons, such as support considerations and interoperability concerns. We are investing heavily [in] Layer 3 switches to increase the likelihood of VARs starting their switch designs with a comprehensive TRENDnet solution.”
Su continues, “Many VARs design network loads from the bottom up—they determine number of users, usage, etc.—and then specify networking products from the top down. They start with the most demanding switch and then build down from that.”
TRENDnet plans to head up its own VAR program and has invested a lot of thought, planning, and research into creating it. Zak Wood, senior marketing manager for TRENDnet, says, “Step one was to talk to our existing VARs and channel distributors. Their feedback provided the program’s framework. The upTREND Partner Program is designed to be accessible, to deliver real benefits, and to be easy to understand.”
TRENDnet intends to ensure the success of its new VAR program by limiting access to the proper demographic of resellers. This way it can be sure it has the right kind of companies working with it and for it. TRENDnet wants to see its VARs supporting customers from start to finish. Companies that don’t fit this business model, such as Internet, catalog, or retail sales models, will not qualify for the upTREND program. In addition, TRENDnet will not consider resellers that do not offer pre-sales and post-sales services. A company without in-field installation also will not qualify for the upTREND program.
In terms of network gear, Layer 3 switching products and IP cameras are very popular in the enterprise, but they are not without their pitfalls. Layer 3 switches require greater in-depth knowledge of networking technology and require greater technical support resources. IP cameras have been plagued with a compromise between quality and price, stemming from the components used to manufacture these devices. On one hand, IP cameras made with CMOS components offer low cost but also poorer image quality than those made with CCD lenses.
Brian Chu, director of information technology, has been addressing the issues surrounding the IP camera product line. He says, “We recently performed a side-by-side comparison of next-generation CMOS and CCD products, and it was very hard to tell the difference between the two. Next-generation CMOS IP camera solutions have bridged the quality gap. However, CMOS product prices are still significantly lower than CCD-based solutions.”
On another front, wireless networking products are gaining market share rapidly, and enterprises are looking for ways to take advantage of this technology. Any company that can gain a foothold in the wireless networking category will likely be able to generate a reliable revenue stream that can grow with the market. Also, making the transition from wired to wireless networks brings with it much opportunity in the realm of equipment upgrades and product updates. Everybody wants a piece of this action, and TRENDnet is no exception.
What’s Happening At TRENDnet?
TRENDnet did not allow these subtle pieces of valuable information to escape it. It did some research and found out where its company’s gaps were in terms of product availability and selling strategy. So TRENDnet has devoted R&D to create an L3 switching product of its own. It also looked into the performance and cost differences of CMOS vs. CCD lenses for IP cameras and found that as time had passed, the disparity had all but disappeared. Rather than just guessing at a solution, TREND-net increased R&D spending from 1.25% of its budget to 2.25% in support of these scientific efforts. Budgeting for technical support expenses will be increased by 20% to handle the projected load of maintaining this complex equipment in the field.
TRENDnet has not overlooked the opportunity for success in the wireless networking segment, either. In fact, its plan involves creating a new product that may just change the landscape of the enterprise and small to midsized enterprise market segments. 
by David Gilbert
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