Businessmodel of Gigamon

Customer Segments

Gigamon has a niche market business model, with a specialized customer segment. The company targets its offering at enterprises that want to increase visibility of their network traffic. It primarily serves large and mid-size organizations and federal agencies. Its most common client industries are finance, insurance, high-speed trading, healthcare, government, higher education, and technology.

Value Proposition

Gigamon offers three primary value propositions: convenience, performance, and brand/status.

The company creates convenience through the design of its Visibility Fabric solution, which is simple to install, maintain, and configure. It can be comprised of multiple appliances or a single one, and can be controlled either locally or remotely from a centralized interface, allowing customers to spend less time and effort maintaining and managing unmanned data centers.

The company’s solutions demonstrate strong performance. The Visibility Fabric product offers enhanced visibility and intelligent filtering of network traffic without inhibiting the delivery of this traffic to analysis, management, security, or compliance tools. Moreover, in most cases changing the configuration of the Fabric does not require downtime, helping customers achieve 99.999% uptime.

The company has established a powerful brand due to its performance. As of December 2015, it had more than 1,900 customers, including 78 members of the Fortune 100. It has also won many honors, including placement on the CRN Security 100 (2016) and the Deloitte Technology Fast 500 (2015), and recognition with the Network World Asia Information Award for Network Traffic Monitoring & Management (2015) and the TechTarget SearchNetworking Network Innovation Award (2015).

Channels

Gigamon’s main channels are its direct salesforce and its channel partner network (distributors and resellers). The company promotes its offering through its website, online advertising, industry research, content syndication, attendance of conferences and trade shows, and collaborations with technology vendors.

Customer Relationships

Gigamon’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website features a “Resources Library” section that includes analyst/industry reports, books, case studies, deployment guides, data sheets, feature briefs, infographics, product/solution briefs, support documentation, videos, webinars, and white papers. There is also a customer portal that product owners can use to open a support case and obtain product documentation and software downloads.

Despite this orientation, there is also a personal assistance component in the form of “Premium Training” – a program offering instructor-led courses and/or customized learning services. In addition, the company maintains two support programs: “Standard Support” offering phone and     e-mail responses to inquiries Monday to Friday between 8:00 p.m. and 5:00 p.m., and “Premium Support” providing the same services 24/7.

Key Activities

Gigamon’s business model entails designing and developing networking visibility and monitoring hardware and software products. The company outsources the manufacturing of its hardware offerings to third-party contract manufacturer Jabil Circuit, at its facilities in Guadalajara, Mexico. That said, its product components come from several suppliers.

Key Partners

Gigamon maintains the following partnership programs:

Technology/Ecosystem Partners – Organizations that create best-of-breed management, monitoring, and security solutions by attaching their products to Gigamon’s Visibility Fabric offering. These firms fall into the following categories: Application Performance Monitoring (APM), Network Performance Monitoring (NPM), Security and Vulnerability Management, Network Forensics/Big Data Analytics, and Customer Experience Management Monitoring (CEM). Specific partners include Cisco Systems,

VMware, Check Point Software Technologies, Dynatrace Corporation, Fortinet, Empirix, FireEye, IMperva, Riverbed Technology, SAvvius, SevOne, ForeScout Technologies, and Viavi Solutions.

Reseller/Distributor Partners – Organizations that extend the scope of their offerings by selling Gigamon’s products and services to their customers. Authorized resale partners are able to design and implement infrastructure services and solutions. Value-added distribution partners offer various services to reseller partners, including product training, marketing tools, and support tools. Gigamon offers training to both groups, as well as opportunities to become certified in the use of its products.

Key Resources

Gigamon’s main resource is its custom software, which includes the majority of its intellectual property. It depends heavily on its engineering team, which has significant expertise in key aspects of its research and development efforts, including network management and analysis technologies, network securities, network protocol, virtualization, and Ethernet system design. Lastly, as a startup it has relied on outside funding, raising $22.8 million from Highland Capital Partners in February 2010 (other possible investments are unknown).

Cost Structure

Gigamon has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is sales/marketing expenses, a fixed cost. Other major drivers are in the areas of research/development and administration, both fixed expenses, and cost of product, a variable expense.

Revenue Streams

Gigamon has two revenue streams: the revenue it generates from sales of its products, and sales of related services (training, support, etc.). The company must be contacted for service price quotes.