Archive for the ‘competitive’ Category

As mentioned earlier in these pages I’m documenting my quest to arrive at a market segmentation model of the cloud computing market. This will allow me to perform a series of REPAMA competitive marketing studies into various vendors in the cloud computing space. I’m uncovering more and more interesting research as I go and one such piece is described below.

The smart people at NIST (The US Governmental agency responsible for something or other – standards I think) have released some interesting work on cloud computing. Aimed at reaching a common set of definitions around cloud computing and its use cases, but recognising that these will change over time, their work can be found here.

I’ve reproduced some sections below because I think they add something to my quest to segment the cloud computing market. That said, I think they’ve omitted, perhaps consciously, an important characteristic and that is the commercial arrangements around cloud computing – namely its pay per use nature.

Anyway here goes:

A Definition of Cloud Computing:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models.

Essential Characteristics of Cloud Computing

On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service’s provider.

Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile phones, laptops, and PDAs).

Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network bandwidth, and virtual machines.

Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.

Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the utilized service.

Service Models:

Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.

Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly application hosting environment configurations.

Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).

Deployment Models:

Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.

Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.

Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.

Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).

I think this is a really nice and compact definition of cloud computing it characteristics and use cases. I particularly like the notes on deployment models which I certainly want to incorporate into my cloud computing market segmentation.

Kudos to Peter Mell and Tim Grance of NIST!

Danny Goodall

Just a quick note to say that I’ve updated the Lustratus REPAMA Guide to version 1.1. I’ve added three more studies that have been part of our analysis for some time but hadn’t quite found their way into the guide.

These are:

• Depositioning focus
• Differentiation strategy
• Perceived threat

All of these studies are concerned with interpreting how the vendors under scrutiny approach competitive differentiation in one way or another and are now explained in the guide.

The Lustratus REPAMA guide is available for download, and for the first time in HTML format. Click here for more information.

In putting together our REPAMA analysis into the go-to-market strategies of the vendors in the cloud computing space, we first must arrive at an agreed segmentation of the market. This blog documents that process.

OK so as I mentioned here, I am going to carry out a series of REPAMA Segment Analysis Studies into the cloud computing market. The desired end product is a series of reverse-engineered go-to-market strategies for a set of vendors in each of the categories within the cloud computing market. But first I need to decide on the segmentation of the various technical offers in the cloud computing space.  After that I need to decide which vendors fit into each of the different proposition segments. This series of blogs will capture my journey through this analysis.

Where to start? Well I thought that my colleagues Steve Craggs and Ronan Bradley at Lustratus Research (the market analyst part of Lustratus) would be able to give me a definitive answer on the segmentation of the cloud computing market but as Steve told me, right now there isn’t a universally agreed way of describing the various categories of propositions under the cloud computing banner. Whilst he feels their are some obvious high-level classifications, under there things are a bit grey.

The problem is two-fold. Firstly, it appears that as the cloud computing market is currently at an early stage (albeit using what now are some pretty mature technologies); the propositions have grown, merged, change direction and are only now starting to find live customers amongst enterprises; so categorisation has proved difficult.  Secondly, the analysts involved in this space each has a vested interest in classifying the market on their terms and importantly in a different way to their analyst competitors – a game they will play until the market matures.

So I decided that I would capture the opinion of the great and the good of analysts and vendors alike and come up with our own classification. And in doing this a number of existing works stood out.

1. Peter Lairds – On-Demand Blog Classification

Peter Laird’s “Laird On-Demand blog“, and in particular this post, documents his efforts to arrive at a market taxonomy for Cloud Computing together with a nascent list of the vendors that fit into each category. As you can see from the diagram on the right, Peter is a fellow fan of mind mapping (it’s how Lustratus collects, collates and generally makes sense of the raw data behind the REPAMA studies), his classification has a simplistic appeal that I like.

At the highest level Peter divides the cloud market into

• Infrastructure
• Platform
• Services
• Applications

I feel that this a good way of looking at the cloud market and one that works well for my purposes. I also like the way Peter has classified private and public cloud seperately.  From the perspective of the REPAMA analysis I will be conducting, this is an important distinction between the various vendors’ propositions. (This despite the fact that the same software and vendors may appear in both categories).

2. OpenCrowd Taxonomy

Another interesting approach is provided by OpenCrowd.  I don’t know OpenCrowd but they appear to be a RIA vendor but also deep thinkers who really understand the major trends in the markets in which they compete. They’ve looked at cloud computing and have come up with a very thorough classification as shown in the diagram on the right.

They see the market also categorised into 4 high-level categories:

• Infrastructure Services
• Cloud Software
• Platform Services
• Software Services

OpenCrowd has also gone to considerable effort to sub-categorise these high-level categories and also to identify specific vendors associated with those sub-categories. Again I like this approach for its thoroughness although having looked at some of the vendors in each of the categories, its clear that they have been placed there/asked to be placed there simply because they want to bask in the reflected glory of the cloud computing market, as opposed to having a dedicated or specific cloud focus.

3. Christofer Hoff’s Cloud Model

Finally, a more technical classification comes from Christofer Hoff in his highly entertaining and incredibly well thought out security-focused blog – Rational Survivability. In this entry Hoff publishes his architectural model which appears to be largely aimed at understanding the interaction, dependencies and relationships between the architectural components in a cloud architecture from a security perspective.

It’s useful to have an architectural model to work with as this helps to validate that the vendor-led offers into the cloud market as described above, have some basis in fact. Whilst it won’t figure in my market-led classifications I have added it here for completeness.

So I’m still in the process of collecting my ideas and I’d like to take bit of 1. and 2. above and merge them into something that better reflects the vendors’ perspectives of how they take their products to market. I also need to first ensure that both Peter and OpenCrowd are comfortable with me doing that. The model I arrive at will necessarily be far simplified too as for the purposes of my vendor to vendor comparisons, I need to ensure that I group vendors together that compete even if they don’t intellectually appear to fit into the same market categorisation.  Watch this space.

Danny Goodall.

• Infrastructure
  Public
  Private
  Infrastructure
  Platform
  Biz Users Platforms
  Dev Platforms
  Services
  Storage
  Integrate
  Enablers
  Applications

I hope you like the alliterative heading for the blog which was born from some work I’ve been doing recently for a client.  I’m not sure that diffident is exactly the right word but there was no way that I was going to ditch it when it looks so beautiful set against all those “diff” words.

Anyway, I was struck recently by the reluctance of some people to fully embrace the concept and importance of aggressive differentiation.  Whilst I’ve long understood that different types of people reach decisions about products (and lots of other things too) in different ways based on our bias towards one of the following psychological functions (Intuition, thinking, feeling and sensing), I’ve seldom before encountered this on the vendor side of the marketing battle.

I’m certainly not sitting in judgement on this.  On the contrary it has made me look carefully at the way I work with my clients moving forward.  My client has a very strong business and is growing at an incredible rate but they are starting to encounter stiff competition hence my involvement.  I’ve been working on strategies to help to grab a position in the market for them that will undermine their competitors and am pretty pleased with the results.  It’s been a great project and I’ve really enjoyed working with them, they are top people and have great products.  The problem lies in their reluctance to stick out their chest, beat the drum and proclaim their greatness.  They are, I guess you would say, corporately shy.

It made me dust off my copy of Differentiate or Die by Jack Trout to review the psychology of differentiation but this time from the perspective of the vendor.  It set me thinking there is no “one” way to build differentiation strategy.  Whilst it’s important to be able understand the behaviour of your target audience, it’s also important to ensure that you are happy with the chosen strategy and that it sits well with the philosophy and perhaps even the ideology of the company itself.

For example could Company A, staffed and populated by conservative and modest management feel comfortable going to market with a message of “We’re different from Company B because we do X better than them”?  It’s not an easy step for them to take.  The opposite of this would be to expect a vendor who really understands competitive differentiation such Oracle to say “Test our product and it will speak for itself”.  Whilst this might be true a company like Oracle will never turn up the opportunity to thrust the differentiation dagger into the chest of the competition.

Somewhere in the middle lies the truth I guess.  There is immense credibility, not to mention the moral high ground in looking to let your product win the battle for you.  But equally, aggressive marketing by aggressive competitors can cause you to be de-positioned in the eyes of your prospects such that they think they know where you are positioned and won’t even bother to evaluate the product.

So I’m going to cover this subject in a series of short blogs taking a look how differentiation works from a psychological perspective and how this translates into corporate psychology.

Danny Goodall.

Just a quick note to say that the updated High Performance Messaging REPAMA Segment Analysis Study has been uploaded to the Lustratus site.  It now contains the reverse-engineered product marketing strategy for TIBCO’s Messaging Appliance P-7500.  Existing customers and Lustratus research subscription holders will already have been contacted with details of free upgrades.

Following on from the blog entry I made when the first version of the report was released I thought I’d show the updated value proposition below.  As I mentioned in a previous blog entry TIBCO’s primary competitive focus is very unusual – it is TIBCO Rendezvous – one of its own products.  The different approach to the market doesn’t stop there as you’ll see from the report extract below.  TIBCO also plough its own furrow by taking a different proposition to the market when compared with most of their competitors.  This one based around green IT and data centre costs (in addition to the obligatory low latency = competitive advantage proposition).

For more information on the REPAMA methodology visit here.

Danny Goodall.

So closing out this series of posts looking at differentiation in markets where technical standards have caused little technical difference between products, I’m going to look at standards bodies and technical education as a technique to create differentiation.

Preach the gospel – Educate

The first point to make is that in my experience products that have developed through the process of ratification of technical standards, first find an audience amongst the technical community.  This means that there is an opportunity, albeit with a finite window of opportunity, to become the first vendor to provide education together with access to evaluation software for these early technical evaluators.

I’ve had first hand experience of this early stage marketing exercise.  We fed the thirst for knowledge and the need for evaluation software (to mix metaphors) to build a loyal community of technical evaluators, developers and systems architects.  We were able to craft an image for the company as the developer-friendly standards implementer, the first company to turn to when wanting to understand how the standards should be interpreted and implemented.

Obviously at some point you have to turn this rather “altruistic” approach into a business that  licences software and keeping that audience with you as you do this is not easy.

“Work” the standards bodies

Another technique that can be exploited, although it needs significant “muscle” to be able to carry off, is that of leading that standards-bodies.  Again I’ve had experience of working for a relatively small vendor that was represented on standards-bodies where we came up against larger vendors.  These vendors were able to almost completely dictate the direction of the body through a mix of funding, bluff, bluster and threats.  It was an interesting process to observe and the outcome, whilst not being everything that larger vendor wanted to achieve, was that they were able to grab territory from other vendors on the committee.  If a camel is a horse designed by committee then all I can say is count the humps on the back of the standard when a large technology vendor charitably volunteers to donate 50 man years of code to “expedite” the adoption of the standard.

Time to abandon standards

Lastly, understanding at what point it is right to move on from the standards to create a “proprietary” offer is important.  This may not be a public admission that your product now features proprietary capabilities alongside the standards-based functionality, but the point will come when in order to take the product forward at the pace required standards become secondary.

Using this message of “We have used standards to get ourselves to this point but now we need to implement specific technology to deliver what the market really needs” can be powerful but is a double-edged sword.  Being seen to “abandon” standards in this way can have a very negative reaction.  Whilst this would typically only happen once the market has reached the later stages of maturity, the benefit to the vendor that can first differentiate with proprietary features whilst externally still being perceived to embrace the philosophy of standards is significant.

So if you can be seen as more devout than the other guys, and preach the standards gospel further afield than anyone else, you can grab a position in the market that other vendors will struggle to defend.

Danny Goodall

I’m carrying on this series of posts on how vendors can differentiate themselves in the market when technical standards have had the effect of removing significant functional difference between competitive products.

This time I’m going to look at partnering to create differentiation in your offer.  Whilst the product proposition will remain materially similar to that of the standards-driven competition, a proposition carved from the synergies of the product and a strategic partner can be beneficial.

Partnering – Other complimentary vendors

As I suggested in this post, broadening the product portfolio is one way to create differentiation.  Whilst this can be done through internal product development, it is also possible to broaden the product proposition through strategic partnerships.  Obviously there are some ground rules here.  Firstly the products must be complimentary in that they should not overlap functionally.  Secondly the resultant product set must take the vendor into new areas when compare to the competition.  Thirdly, the partner must not have the same resultant product set themselves or conflicts can occur.  Lastly, the resultant feature set must not be too much of a departure for your sales team to credibly take to market.  If, to sell the partner’s products would require your own sales team to take on skills that they don’t naturally posses, this can be counter productive.  All of these caveats notwithstanding, one shouldn’t underestimate the value of partnering for obfuscation.  i.e. you partner to achieve a tick in the box and to create differentiation with no real intention of selling the partner’s products.

Partnering – Professional services

Similar in concept to the ideas I discussed on methodologies, differentiation can be created around how you implement your technology within your customer’s organisation.  Third-party system integrators or boutique technical consultancies can add value and create differentiation in your offer.  If you are going to rely on a third party organisation to create differentiation like this. it is essential that the reputation of the third party is second to none and that they provide something that you alone cannot.  Perhaps access to a different audience strata or a reference customer base you don’t posses.  In addition you should be wary of laying yourself open to the challenge that your proposition is so different or complex that you require specialist third-party services to implement it.

Partner – Embed your technology

Finally, the ultimate differentiation through a third party is to embed your technology within a third-party’s product.  Not really differentiation as typically when this embedding is carried out your own proposition is actually hidden within that of the embedding vendor’s offering.  That said, I have had first hand experience of using embedding deals like as references to create differentiation.

The claim that “We’re the solution that is embedded in ACME Corp’s product” can have a significant positive impact on credibility.

I’ll close out this discussion in the next post when I look at the use of standards bodies and technical education for differentiation.

Danny Goodall

Part 4 – Broaden the Debate

I’m continuing this series of blogs here by looking at the techniques that software vendors can use to create the “illusion” of differentiation in markets where technical standards have led to little material product difference.

So moving on from my last blog where I looked at the way an organisation can differentiate based on the way that they sell, this entry will look at techniques to move the focus away from the technology and onto some other element of the proposition where real differentiation between vendors exists.

I should perhaps first acknowledge that achieving this sort of holistic approach to taking a proposition to market is not the work of moments.  It takes a committed and capable marketing machine to craft the story and then real focus to ensure that the entire organisation rallies behind the proposition as one.  Getting the prospect to evaluate the competition on your terms is the objective and only through consistent and disciplined messaging can that be accomplished.

But if you can pull this off, in my experience it is one of the most successful ways to move the debate away from a particular product or technology where little difference exist towards an holistic proposition where difference can be noted.

Synergies, other product lines and product stacks

The most obvious place to start, and if you’ve monitored the SOA infrastructure software space at all you’ll be familiar with this concept, is that of combining products or even building out complex stacks of products that together deliver synergistic benefit to the prospective customer. Whilst the capabilities of one product may be very similar to those of the competition, when combining those features with additional products the total is greater than the sum of the parts and is very different from the competition.

The idea goes something like “Well whilst our XYZ product might be based on the same set of standards as ACME corp’s, when combined with our ABC product line you can achieve these additional benefits that ACME cannot deliver”

Methodology or philosophy

Another technique I’ve seen work well is that of presenting the product as being as-is or even commodity and suggesting that the real value delivered comes from a specific way in which the product is implemented.  Professional services offerings often come into play here.  Taking the product and the services together, it is suggested, helps deliver benefits that the product alone cannot.  Again the implication is that whilst the competition might ape the features of the product, the methodology is borne out of a deeply philosophically differentiated approach.

Ensuring the competition is evaluated “properly”

Creating broader propositions as outlined above is actually not that difficult.  The key is ensuring that prospects are encouraged to evaluate the competition on your terms.  You want the prospect to be asking the competition if they have an implementation methodology or a complete product stack.  That doesn’t sound easy and in my experience it’s not as easy as it sounds!  But if you can force the market to value the elements of your proposition that are different from the competition then you’re half way to building a successful business.

Danny Goodall.

Part 3 – Sell Differently

I’m continuing this series of blogs here by looking at the techniques that software vendors can use to create the “illusion” of differentiation in markets where technical standards have led to little material product difference.

Perhaps the most obvious differentiator between organisations that have “broadly” similar technology, and an area that particularly hurts smaller or less well established software vendors, is the vendor’s approach to selling.

Which audience strata do you aim at and what do you say to them?

At its most crude this can be the difference between Vendor A talking to a technical audience about the features of Product A whilst Vendor B is talking to line of business managers within the same company about how their product will provide some business benefit or other. Two similar offerings, with similar capabilities being “sold” in very different ways to very different parts of the same organisations.

The benefit of selling at a business level is enormous.  Decisions get made at that level, budgets get signed off at that level and enterprise-wide relationships get built at that level.  However, the difficulty with this approach, especially for smaller or less well connected vendors, is that gaining access to senior management outside of the IT domain of their prospects’ organisations is very difficult.

It takes years of building credibility and demonstrating proof of delivering benefits (reducing risk, Increasing profit, saving time,removing cost, etc.) to buy a ticket to the business-benefits ball.  Unless you’ve paid your business benefit taxes, have documented how you’ve helped deliver benefits and have an army of references willing to stand up on your behalf you’re likely to not be taken seriously.

In addition, in my experience, the skills that a sales exec needs to credibly describe the features of a technical proposition are usually mutually exclusive from the ones they need to engage a senior C-level exec in a discussion about the business issues that keep them awake at night.

So where to start if you’re a technology-focused vendor looking to sell differently?

Well it’s a journey and will involve dramatically changing the way your organisation thinks, behaves and looks.  Many of your staff will have to undergo a dramatic transformation and many won’t make it (especially the sales team).  Then you need to look at developing marketing messages for IT Business and the Business audiences.  You’ll do this by talking less about specific product capabilities and instead aligning yourself with where the prospect wants to be AFTER they’ve done business with you.

What are their pains, what are they looking to achieve, how can you help them do this and what proof can you provide that you’ve done it before?

The marketing materials and programs that support such a business audience-focused sales approach are very different too.  And whilst this has a significant impact on the structure of the marketing organisation, perhaps the biggest challenge is that just because you’re now selling to a business audience doesn’t mean that you stop marketing to the technical audience.  We still have to convince these guys that we’re able to do the job. So now you’re waging a marketing battle on two fronts and this means significantly greater investment.

But before embarking on this approach you should ask yourself whether you’re committed to the journey.  I’ve worked for, and with many organisations that have seen “selling to the business” as the holy grail, the panacea to address their competitive losses and their inability to control the sale.  But embark on this journey without fully committing to the changes it WILL have on your organisation and it will lead to a bloody disaster.  I speak from bitter experience.

Well that’s about it for the “selling differently” approach to differentiation in a homogenised market.  The benefits of selling at the business level while your competitors are talking to “minions” in the technical side of the business are enormous, but as I’ve mentioned about it’s not an easy journey.

I’ll cover some more differentiation techniques in coming blog posts.

Danny Goodall

Continuing on from this blog entry, I’ve decided to create another mini series of blogs, this time looking at the difficulty of differentiation in markets where software standards have created homogeneity amongst the offerings of the protagonists.

So first a little bit of a history lesson…

I surfed the wave of middleware resurgence in the early stages of the new millennium and had great success marketing various technologies. Initially, working with some of the best people in the industry, I introduced SonicMQ to the world while at Sonic Software (now Progress Software).  This was a market proposition that was heavily based on standards. Well at least we made sure that the debate was about standards – JMS in this case.  My ex-colleague Dave Chappell was talking to developers all over the world and writing books that led the debate on JMS and other standards.  We de-positioned the competition as being complex and proprietary and we enjoyed great success. Obviously the competition reacted by introducing their own JMS-based products, a move which we expected but by then Sonic had introduced the Enterprise Service Bus (ESB) and had moved the debate on to standards that enabled a service oriented architecture (SOA).

All the while I was creating marketing programs that stressed Sonic’s commitment to standards and, by implication, I was de-positioning other vendors’ technologies as being the Devil’s spawn due to their reliance on proprietary features. “How,” we asked “would organisations ensure interoperability between their, and their trading partners’ infrastructures if they didn’t conform to the emerging standards?”

Sonic enjoyed great early market success with this strategy as did the other vendors in the JMS and related markets such as Fiorano, Cape Clear, PolarLake, et al.  These vendors punched above their weight and went into battle and won against some of the industry’s heavyweights.  All of this was made possible by their commitment to standards.  These companies existed because a) standards made it easier for them to build software and b) customers wanted to move away from vendors’ costly and proprietary solutions and ran with open arms to this new breed of standards-based middleware.

For a while the old school vendors held out.  Claiming that their incredibly feature-rich offerings justified their proprietary methods and high price tags because they could do more “stuff”.  But the slow move towards standards gathered pace and eventually turned into an avalanche as, helped by maturing software standards, first the least established proprietary vendors and then latterly the market leading EAI vendors validated the market by introducing their own standards-based products.  Sonic had won the battle.

But then the problems became obvious.  When your product is based around freely available specifications and built with the help of common libraries that are available to others, how can you differentiate when your competitors are using the same specifications and standards?  If the software must conform to these standards, differentiation, at least at the product level, becomes a challenge.

Obviously not all animals are equal so some degree of difference exist between standards-based products.  During customer evaluations these come to the surface.  In fact in the sales situation where prospects can be engaged in detailed discussions about a technology and the company that is behind it, it’s actually not too difficult to draw distinctions between different approaches.  But within the marketing organisation, where we’re tasked with creating a credible, unique space in our prospects’ minds by placing 130 words on a web site, how can you do this?

It’s not easy and there are no hard and fast rules or guarantees but I’ll take look at some of the techniques that can be used to achieve this in upcoming blogs.

Danny Goodall.