By David Xie, the Chief Product Officer of Zenlayer
From securing investors and employees to identifying and reaching their most lucrative markets, companies of all sizes face challenges from the outset and at every stage of business development and growth. For new company founders and established business leaders alike, one of the greatest enigmas — and the key to building a successful operation — is engaging with and obtaining the most lucrative customers.
To take command of market share, companies need to branch out into untapped markets while also becoming the indefectible experts in what they offer. That begs the question of what is the most effective growth strategy: horizontal or vertical? The short answer to that question is simple — both. Expanding horizontally into previously untapped markets leads to new opportunities and clients. This strategy, combined with a specific vertical solution and a clear understanding of customer needs further sets an operation up for rapid market penetration and long-term ROI.
Right now, there is a huge opportunity to garner market share in untapped markets such as India, Asia, China, the Middle East, Africa, and Latin America. Populations in these countries are among the largest in the world, and, in addition to the sheer number of people, internet use, in general, is growing faster in emerging markets than anywhere in the world. The demand for direct-to-consumer content is rising quickly as well. These trends translate to huge net new revenue potential, and a company with a solid solution that meets the needs of its customers has the potential to amass substantial monetary growth in these regions. But first, they must establish a presence in emerging markets.
A global reach opens the door to millions of potential customers from anywhere in the world, but there are specific factors businesses should consider when deploying applications in new locations.
Operating in new locations such as emerging markets can be challenging because infrastructure such as services such as power, water, and utilities, as well as IT and network infrastructure are often not as well established as they are in developed markets. Specific infrastructure obstacles include:
- Interconnectivity: Immature interconnectivity into, out of, and within countries, local ISP peering, availability of internet exchanges, and last mile connectivity quality are possible concerns in less developed markets.
- Utility infrastructure: Inadequate or inconsistent utility power at data center PoP locations may impact uptime availability and customer acceptance..
- Network infrastructure: In some regions, there may be a lack of terrestrial network infrastructure in a region. In others, there are varying levels of wireless technology adoption ranging from 2G to 5G. In those cases, applications must be able to contend with lower network speeds.
Barriers to entry in emerging markets can be high, and solutions that work in the U.S. and Western Europe often don’t work for organizations trying to break into new locations. Doing business can be difficult for foreigners for several reasons:
- Local entity requirements: In many emerging markets, local ISPs are government-owned and have strict regulations on working with foreign entities.
- Complex compliance measures: Foreign local and regional regulations in emerging markets, such as content regulations and data sovereignty rules, can make it difficult for companies from other countries to do business in these regions.
- Lack of pricing clarity: Hidden fees such as bandwidth ingress and egress costs, expensive tariffs, and a general lack of pricing transparency in some countries means that without a partner with strong local relationships, it’s easy for foreign companies to spend a lot of money without understanding the best return on that investment.
Advance Vertical-Specific Solutions, but Beware of Pitfalls
Latency and poor QoS are top concerns for organizations doing business in emerging markets, especially companies with dynamic, interactive content that requires fast reaction times and high-speed transactions, including:
- Media and Entertainment.
- Cloud service providers.
- Healthcare software services.
- Services that facilitate smart cities, smart vehicles and smart manufacturing.
Since customers are increasingly expecting to access fast and reliable digital services anywhere anytime, it’s important for companies to have a strong digital foundation in place. This is where many companies are falling short, which leads to issues such as:
- Low latency.
- Buffer and connectivity dropouts.
- Compromised user experience.
Businesses and providers alike have the opportunity to unlock growth potential in formerly unreachable markets. Expanding into new markets and new solutions, however, can be overwhelming, costly and time-consuming. Oftentimes Western organizations lack the local market expertise or personnel to expand into developing countries.
Edge Cloud Providers to the Rescue
Edge cloud and networking platforms are making it easier for developers to build and deploy content and applications across a wide variety of locations worldwide and avoid infrastructure bottlenecks. The process involves placing content in a cloud environment safely housed within data centers located as close to the end user as possible. To accelerate global expansion, edge providers offer clients a large number of data center PoP locations worldwide, optimized global networks, and interconnections to a multitude of network carriers and top cloud providers. The result? Data that reaches the edge, no matter where the edge may be for a particular business.
The key is for business leaders to select an edge provider with locations in the markets in which they wish to expand; these providers should also have expertise in their targeted industry. This provides peace of mind that they can deliver the best digital experience possible in the countries they want to reach anywhere across the globe. By partnering with an edge provider that possesses an equal combination of horizontal coverage and vertical market expertise, these companies are overcoming the challenges of expanding into underdeveloped markets and achieving low latency, advanced traffic engineering, and high capacity – giving them a keen advantage at the edge.
About the Author
David Xie is the Chief Product Officer of Zenlayer. He leads the Product Management and Development (PMD) Organization. Before joining Zenlayer, David was Group Vice President of Digital Products at Gartner. While at Gartner, he held multiple leadership roles with responsibilities for product management, corporate strategy, data science, sales enablement, and digital transformation. Prior to Gartner, he also worked as a Management Consultant at McKinsey, an IT Architect at Openwave, and startup founder.
DISCLAIMER: Guest posts are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Edge Industry Review (EdgeIR.com).
edge cloud | edge content delivery | interconnection | latency | Zenlayer