Just picking on nits here BUT ...
Chip, you referred to choosing a specialization as creating a niche.
What you are referring to is micro-marketing. Taking a large market (IT or IS) and breaking it down into smaller and smaller elements until eventually you end up with a tiny thing that your customers can understand (e.g. SAP implementation business process analysis). Sometimes it is confused with long-tail marketing (which is actually a reverse view). It is product and market focused and is intended to help you focus your marketing efforts on specific benefits and a single product. It's about making it easy for your customers to understand your message. .
HOWEVER, niche marketing (ie creating a niche) is about your customers. It's about taking all the various possible customers and then breaking them into tiny segments. For example, you might start with all IT customers then move to all SAP customers then to SAP customers in distribution then to SAP customers in distribution on the west coast. The purpose is to identify a single class of customers with almost identical characteristics. In that way, you can arrange to place your messages where they are and you can target your message to appeal to them.
Like I said, picking nits....
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