“Most of our partners are very big companies and the revenue they generate with NetX may not seem as much in their books, but the revenue it helps generate with other associated products is substantial. NetX is a business enabler that drives many other revenue streams for our partners.”

Olaf Hasker, Previously CEO at NetDialog

The Customer Problem

Have you ever been on the phone with a customer services representative excusing for the speed of the IT-system? Or have you checked-in at an airport where the IT-system was slow and people in the steadily growing line started to show their impatience?

Today information technology is a critical component in all businesses and a majority of the workforce is actually information workers. Their productivity and quality of life depend heavily on how well their IT-tools perform. In many job-functions, it is also the performance of the IT-systems that determine the quality of the service that the organisations’ customers experience. Thus, there is a very direct relationship between customer and employee satisfaction and the performance of the IT-systems.
We have come a long way since the first mainframe-based online systems were introduced in the 1970s. And even though the computer power in our smartphones outperforms these mainframes and our Internet subscription way outperforms the 9,600 baud modem we so merrily welcomed in the past; the performance of IT-systems still remains a serious problem for all organisations. Despite the explosion in computer and data communications capacity, it seems that the creativity of the software developers and the demand for new applications are always stretching the IT-infrastructure to its’ limits. The bigger the organisation is and the more it is spread across separate geographical locations the bigger the problems become.

The Customer Value Proposition

Fixing performance problems in IT-systems is no trivial task. The IT-infrastructure is made up of numerous components each with their capacity issues, update cycles and potential bottlenecks. At the same time, the workload at any given time is decided by how the IT-workers are actually using the systems. Troubleshooting requires sophisticated analytical tools that can help the IT-systems support staff understand what is going on and allow them to apply immediate fixes if possible and schedule systemic changes.

NetX from NetDialog is an application suite of monitoring and reporting tools directed at the data communications infrastructure. It provides the IT-systems support staff with the toolbox for monitoring and fixing problems even before the users start to notice the problems. NetX continuously monitors and analyses the performance, user experience and delivery of applications, as well as the general performance of WANs, providing up-to-the-minute, easy-to-understand analytical information.

The pricing of the service is based on the number of information sources, which typically are the physical routers in the customer’s network. The subscription price for an installation with 100 data sources is in the range of a few thousand Euros per month.

The Ideal Customer Profiles

Although all types of companies and institutions are faced with performance issues the consequence of the problems increase with the size of the organisation. The complexity associated with troubleshooting and preventive initiatives grows with the organisation’s geographical spread.

NetDialog has defined the ideal customer as any organisation operating on ten or more geographical locations. However, as the value increases with the size of the network, customers with over 100 routers will actively be looking for the type of solution that NetDialog provides. Being present when such needs become active is crucial for the company.

Solution Components

NetX, that is delivered in a cloud format and on a subscription basis, requires only little implementation effort to become operational. Of the price the customer pays around 90 per cent is for using the software and 10 per cent is for the professional services required for setup and support.

Based on a list of information sources and the naming convention NetDialog prepares their software for receiving the data from the customer. After the customer has configured her network devices to submit the data, NetX starts the analysis and makes the results available as required. Using this approach NetX can provide very detailed insight into the performance of the customers IT resources without installing any software in the clients IT-infrastructure.

Go-to-Market Approach

NetDialog is a small company serving a market with very large customers. This is normally a toxic cocktail which is why the company has chosen an indirect distribution model.

“We are a small and technology-centred company based in the Netherlands,” explains Olaf Hasker, CEO of NetDialog, “and our customers are major corporations and institutions all over the world. We identified a series of companies that already had a relationship with our potential customers in the area that NetX addresses and explored how we could improve their customer value proposition.”

The business partners are a mix of systems integrators, communication service providers and performance- and security-management providers.

“Most of our partners are very big companies and the revenue they generate with NetX may not seem as much in their books,” says Olaf Hasker, “but the revenue it helps generate with other associated products is substantial. NetX is a business enabler that drives many other revenue streams for our partners.”

The partners are responding to RFPs from the customer communities. Either these RFPs express a request for network performance monitoring, or the resellers can add this service to differentiate their value proposition. Both ways NetX becomes a central part of the proposed solution.

“NetX may not be a big part of the price of a managed network proposal,” says Olaf Hasker, “but it can be a major part of the value delivered. We, therefore, need to work very closely with our partners’ technical staff and with those who manage the ongoing relationship with the customers. It is important that they are familiar with the service and the value it provides and that they are comfortable proposing it to their customers.”

Internationalisation

NetX is a technical product that crosses borders very easily. It requires no localisation and as it is used exclusively by IT-specialist in primarily international organisations, there is no need to translate neither the user interface nor the documentation. NetDialog also has had international ambitions from the start and have recruited business partners that could bring the product to potential customers outside The Netherlands. As eighty per cent of the revenue now comes from abroad and while most of the new business comes from international customers the time is ripe for considering what the next steps should be.

“I believe we can continue to manage our business in the near time zones from Amsterdam,” Olaf Hasker explains. “Expanding our market share in Asia and the Americas will require that we establish some kind of local representation.”

Olaf Hasker is fully aware that setting up satellite offices adds a layer of complexity to the operation and management of his company. He has seen from others how this step can go very wrong, so he is cautious and considers various approaches where he can adjust quickly if required.

“Outsourcing the initial steps may be a way to minimise the risk,” Olaf Hasker concludes. “We want to demonstrate our long-term commitment to the international markets, but we don’t want to be caught in a trap. Our business is still very project-driven, and we need the ability to adjust according to the actual deal flow.”

Olaf Hasker left NetDialog in December 2019 and is now CEO of MeasureWorks, a NetDialog spin-off.

This post is an excerpt from my book Going Global on a Shoestring.