lustratus REPAMA

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I just can’t help myself. No seriously, I have no choice here but to introduce yet another acronym but at least this one doesn’t have three letters. So how did PIPESCOM come about and what does it mean?

Our REPAMA methodology compares and contrasts different vendors’ marketing approaches by reverse-engineering their positioning and messaging strategies. To facilitate easy comparison between vendors we must be able to categorise the way they approach different elements of their marketing strategy. And with that categorisation I’m afraid, comes acronyms.

To categorise how a vendor creates its value propositions we introduced MITICOR that denotes that a value proposition typically claims to deliver benefits that broadly fall within the following areas – Market, Income, Time, Institutional, Cost, Operational and Risk.

To categorise how a vendor approaches the decision making unit we introduced IGIDBU – to show the Initiator, Gatekeeper, Influencer, Decision maker, Budget holder and User elements of the decision making unit. We didn’t create these elements as many before us have worked on defining the different roles with the decision making unit. We simply stood on the shoulders of giants and then wrapped yet another acronym around them.

So, PIPESCOM? One of the issues we face when comparing infrastructure software and hardware vendors’ marketing approaches is in understanding when the arguments they provide to their prospects about their claimed features are similar or contrasting to those of their competitors. Obviously, in isolation one claimed feature such as…

“…supports XML”

…can be seen as very similar to…

“…supports content-agnostic encoding”

for example. But when comparing 3 or more vendors’ claimed features it becomes more complicated. The answer, for us at least, is to create categories into which each of the claimed features can be placed. Comparing vendors’ product strategies then becomes a case of comparing the categories their respective claimed features fall into. In the example above we might say that both vendors are making a claim for how their products interface with the outside world.

PIPESCOM is the first draft of our categorisation of features. To be honest, I found it pretty tough to arrive at a categorisation that encompasses all of the capabilities we’re likely to come across in infrastructure software/hardware. I didn’t want too broad categories or too narrow so this is my first cut. As I take the technique to other areas of the infrastructure software/hardware market, and perhaps beyond, I’m sure PIPESCOM will be changed and adapted.

I guess I should at least include a definition of what I mean by “Feature” here. So for me a feature is a dispassionate and discrete fact about a product or service that does not seek to persuade. This definition is close to that used in Spin Selling and will be familiar to anyone who has looked at that methodology. Importantly a feature is not an Advantage or a Benefit.

The letters represent the following elements.

Packaging, Interfaces, Process, Ease of use, Speed, Commercial, Operational, Management.

Element	Description	Example
Packaging	How the product is packaged and configured for the sale.	One product, modular, service, etc.
Interfaces	How the product is integrated into existing or new environments.	Works with SAP, supports WS* interfaces, etc.
Process	The product changes or improves a process within the end-user’s organisation.	Creating, deploying, managing, etc.
Ease of use	Describing the usage characteristics of a product	Ease of use, flexible usage, simple to use…, etc.
Speed	Features relating to the performance of the product	Execution performance, capacity, scale, etc.
Commercial	The commercial elements of the product	Price, rental, service, etc.
Operational	Relating to the operation of the product	Stable, high-availability, robust, etc.
Management	Features relating to the management of the product	Deployment tools, configuration management, monitoring, etc.

I will be including PIPESCOM related research in the next release of the methodology but first I have to stress test it to ensure that I’ve included the correct categories. After all, today’s PIPESCOM could be tomorrow’s PIPESCOMXYJPQEWXMN.

But let’s hope not.

Danny Goodall

I was having a drink the other day with an old friend and potential future client.

We were discussing the competitive situation in the market in which his company competes. He knows that I’ve carried out some marketing positioning work for some of his competitors and so we got on to the subject of an industry event that he attended recently.

He told me that both he and one of his competitors (who I’ve carried out some positioning work for) gave a presentation at the event. Whilst he didn’t find his competitor’s presentation very credible (no surprise there), he did say that he was frustrated that in speaking to a couple of potential customers in the audience after the event, his competitor’s key differentiation message was clearly remembered.

I laughed and told him that I was responsible for the message. Whilst I often hear from our clients that a specific positioning strategy that we helped to create is resonating with the market, I don’t very often get such direct evidence from one of their competitors. Modesty, not to mention a non-disclosure agreement, prevents me from disclosing the message or the client but suffice to say that it contains four of the most powerful words that this particularly technology vendor can deliver to their prospective clients to differentiate themselves from most of their competition. These words make sense to prospective clients, convey a complex technical differentiator and lay a trap for competitors and, like the conservative party has done to the Labour party, they will make life difficult for my friend and future client.

Even after all these years, the thought that four words can do all that makes me smile.

Danny Goodall

I watched the 2nd televised leaders’ debate the other evening and was struck by the maturity of some of the competitive marketing campaigns conducted by the UK’s political parties.

(Please get through this rather turgid and wordy description of the state of current political debate in the UK – there is a marketing-related point to this.)

Here’s the long-hand description of the most significant ideological and tactical difference between the two main parties contesting the UK general election.

To those readers who are not familiar with the subtleties of UK politics we have an incumbent government formed by the Labour party. The majority opposition is formed by the Conservative party with the minority opposition coming from the Liberal Democrats. There are also a number of fringe political parties representing varying degrees of extreme views and specific geographic areas.

A significant difference in ideology between the Labour and Conservative positions is found in their approach to the method and timing for addressing the massive budget deficit that the UK has since borrowing to prop the economy up. The Labour government proposes to increase individual and corporation National Insurance (NI) tax payments which is a secondary taxation levied on earnings in addition to our Pay as you Earn (PAYE) income tax. The Labour government argues that this taxation is needed in order that the country can start to pay off borrowing. The Conservative opposition agrees that there is an urgent requirement to bring down the deficit BUT they believe that this money can be found by cutting fat from what they see as a bloated government.

These productivity savings, they argue, will more than equate to the money that would have been raised from the increase in NI. The labour goverment disputes that this level of saving can be achieved through productivity savings and say that services will suffer as a result. The Conservative opposition refutes this. And so we have some real differentiation between the parties’ policies..

The problem that both parties have, as I hope I’ve proved with this rather dry analysis of UK political prattling, is that the electorate at large finds this sort of debate boring, complex, difficult to break down and of little tangible importance to them. It’s just an inscrutable academic discussion between people that they’re not really sure they trust.

What has this got to do with a technology marketing blog?

Jobs Tax

The Conservative opposition has encapsulated this entire argument into a single, easy to use, easy to remember, difficult to refute and highly damaging phrase – “Jobs Tax”. The term has become the banner under which the Conservative opposition has united behind and which they use to succinctly describe the key difference between themselves and labour and the main benefit one would enjoy if one were to vote for them. All senior members of the Conservative party election team have obviously been drilled to repeat these two words ad nauseum,

They claim that Labour’s “tax on jobs” will result in companies hiring less people, laying off  more people and ultimately slowing down economic recovery. As proof they have enlisted a large number of business leaders who are willing to say that if the Labour government is re-elected then jobs will be lost through this “jobs tax”.

Without betraying any political leanings whatsoever, I have to say that this is a well executed positioning campaign and a wonderful example of competitive depositioning. It takes the power of a “competitor’s” feature, uses the energy with which they promote this in the market and turns it against the competitor and to their own advantage. Every time that the Labour government “advertise” their NI policy, large swathes of the electorate deposition this in their minds as a “jobs tax” which they associate as being a bad thing.

What effect this will have on the result I do not know but I have to applaud the spin doctors (not something I am given to doing lightly)  behind such a nifty piece of competitive marketing.

Danny Goodall

I was reading Robin Bloor’s blog entry from earlier in the year recently where he makes some interesting points. But I’m not sure that I agree with all of them…

Robin attempts to identify some of the defining characteristics of cloud computing but I get the feeling that he is starting from a slightly cynical stand point. And whilst I agree that vendor and service provider marketing tactics have created a great deal of hype, I feel others must also share some of the blame for the confusion in the space.

Anyway, his 10 Defining Points for Cloud Computing blog entry is here. I tried to post a comment but as it appears that it’s still awaiting moderation, I thought I’d reproduce it below.

An interesting read as ever Robin but I can’t help thinking that you’ve defined Cloud Computing more so by the things it is not, than what it is. But perhaps that is the place to start when defining something as nebulous as Cloud Computing.

Completely agree that cloud computing is a confused set of definitions and misunderstandings but whilst I acknowledge that the marketing tactics of vendors and providers should take some of the blame – so should the market analysts. The global IT analysts have resisted the temptation to coalesce around a series of definitions and market categories for reasons of vested interest. De facto market category definitions and market segmentations are still up for grabs. So for analysts it’s currently about land grab – attempting to be the firm that defines the broad Cloud Computing categories and drivers. Their attempts to define and steer the market on their terms simply further serves to confuse prospective Cloud Computing users.

I also agree that standards are currently few and far between. The upshot of this is that market analysts and vendors can afford to go in different directions without being restrained by common understanding and artificial technical limitations. Again the impact is on the potential Cloud Computing user who is left trying to find their way in a world that is not easy to define, classify and compare.

Finally the ease at which technology vendors can enter into a hosting agreement with someone and then rename a product line and voila – they become a Cloud Computing vendor, has made the Cloud Computing market incredibly crowded, incredibly quickly. Attrition and customer cynicism should account for the weakest vendors here leaving the candidates for success in the market categories in which they compete.

For what it’s worth I’ve tried to bring some sense to the categorisation of the various market categories and cloud computing vendors/providers in the Lustratus REPAMA market landscape, taxonomy and segmentation model. Instead of ploughing my own furrow, I stood on the shoulders of giants and worked from some of the best definitions I had found in the blogosphere and beyond.

I wondered if your readership my find this useful. This is discussed here.

http://www.lustratusrepama.com/go-to-market/a-market-landscape-for-cloud-computing/

My colleague Steve Craggs has also attempted to define cloud computing in lay-terms based on the categories above.Steve’s piece is discussed here.

http://www.lustratusrepama.com/marketing/cloud-computing-explained-without-the-hype/

Danny Goodall

My Lustratus Research colleague Steve Craggs has taken a step back from the hype surrounding Cloud Computing and has defined it for the layman.

Steve’s premise was that the Cloud Computing hype had reached fever pitch and that some of the claimed benefits had become pretty difficult to believe. He wanted to strip it down to the basics, define it and look dispassionately at the likely benefits and the trade-offs involved. Steve has also put some of the vendors and service providers in the space into the right context based on the Lustratus REPAMA Market Landscape / Taxonomy / Segmentation model.

The document is embedded below and can be downloaded from Scridb or the Lustratus web store.

Danny Goodall

I’ve just uploaded a document to Scridb which is based on a series of blog entries from the REPAMA blog.

In this series of 8 blog postings I described the format of the positioning statement that we use to help our clients capture their company or product strategy. I’ve finally got around to committing the description of the 7 elements…

• target customer/ideal client
• main pain/need or desire
• product name
• product category
• main reason to buy
• primary competitor or alternative
• the unique selling proposition – USP

…to ‘paper’. The document is embedded below and can be found on scribd.com.

Enjoy!

Danny Goodall

I see that Progress Software is in the midst of another restructuring and that to achieve this it will shed 12%-14% of the workforce.

This article details the problem and describes how “One Progress”, an alignment of the different divisions under the same banner, is the plan to turn the company around. I for one really hope that Progress can find some upward momentum. I worked for Progress for many years and still have some close friends at the company and its demise and inability to capitalise on the excellent technology it produces frustrated me then and it saddens me now.

President and Chief Executive Rick Reidy is tasked with a tough mission. To turn around a company whose main product line has reached maturity and whose growth initiatives and acquisitions have failed to gain traction. All of this in ultra-competitive markets and a pretty tough economic climate. My colleague Steve Craggs asked the question a little while ago whether the time is right for Progress to be acquired. It obviously wasn’t then but surely that point is getting closer.

In another article, some detail is provided on how the company plans to turn things around. It plans to:

1.Enhance Progress Software’s product strategy by focusing on growth opportunities in the enterprise software market and bring new products and solutions to market;

2.Change the way Progress Software takes its products to market by becoming more customer and solutions driven. This strategy will enable the company to be even more focused on ensuring customer and partner success.

3.Increase Progress Software’s market awareness, leveraging its more visible product brands that carry strong recognition in their respective markets.

It looks like a good to-do list. The question is whether it can be done.

The last two items struck a chord with me. Historically Progress always saw the technology as primarily important and the marketing function as a necessary evil and cost-centre. Instead of viewing marketing as the creative engine room that could give its products the platform they deserve, the engineering team had a disproportionately loud voice.

This approach came from the previous leadership’s engineering roots coupled to a negative attitude to the very concept of marketing. Instead of listening to the needs of companies and aligning all sales and marketing efforts behind them, products were developed to solve internally perceived technical problems or to match competitors’ functionality. Products were marketed based on esoteric features which resulted in ephemeral technology leadership but not continued sales dominance. It was still great technology because Progress is an engineering company but it was technology for technology’s sake.

I must say that whilst I worked with Rick years back, since he’s taken the helm I really don’t know what priority he places on strategic marketing within the new One Progress. But to achieve 2 and 3 on that list above will involve a fundamental change of corporate DNA.

I just hope that they try to sell and market their way out of the problem and not engineer their way out.

Danny Goodall

I’ve just uploaded the first draft of my latest Cloud Computing REPAMA Segment Analysis Study.

This time I’ve looked at a couple of vendors in the Cloud Software / Cloud Management / Application Services Management segment (using the Lustratus REPAMA Cloud Computing market taxonomy / segmentation model). Specifically I’ve reverse-engineered the key go-to-market strategies of 3Tera and Appistry. I will add another couple of vendors to the study as time goes on but for the moment I thought these would be two good candidates to start with. They are very different companies with very different product approaches to solving similar, if not quite the same problems. I wanted to spend a little time here highliting some of the interesting findings.

Differentiation

I’ve already blogged on my concern that Cloud Computing vendors/ providers are currently differentiating themselves against previous paradigms as opposed to creating differentiation strategies versus their real competitors – i.e. other cloud computing solutions. So it’s no surprise to see that this trend continues in this study with 3Tera. Looking at where 3Tera fires its competitive differentiation fire power in the UNLIKE element of the positioning statement we can see that the focus is:

traditional dedicated infrastructure

To be honest this is an implied competitor/alternative because whilst 3Tera is very clear on its value proposition and target audience, it doesn’t appear to engage in traditional competitive differentiation. Nowhere does 3Tera clearly define what type of solution they feel they are a better alternative to. There is an obvious implied competitor / alternative which is the traditional ways of doing things. But this is never called out explicitly by 3Tera.

Appistry is clearer on its competitive situation. It believes that its competitive differentiation lies versus:

infrastructure approaches to cloud computing

The implication here is that Appistry focuses on the application and not the infrastructure which they believe yields many benefits.

Existing Applications

One area of strong correlation between the vendors in this study is that they both stress their ability to work with existing applications. This correlation suggests that this is a key customer requirement in this particular market segment. As shown in the chart below:

As you can see from the dashed pink line on the chart above (which represents the market mean – the average marketing strategy for this segment) there is strong support for existing applications in addition to the somewhat obvious “table stakes” feature of automated application deployment and management.

Value Proposition

Another strong area of correlation is in the value proposition. The first chart below shows the raw claims made by each vendor for the value they ascribe to their product offer.

Much of these categories of benefit/value are fairly generic and are all very similar to the the value propositions I would expect to see for a cloud computing product. When these value propositions are interpreted against our MITICOR value proposition classification, we can see a very strong correlation between the products of the different vendors as the chart below shows.

The value proposition for both of these products boils down to operational improvement and cost saving which again is very much as I would expect for a cloud computing technology in this segment.

Positioning Statements

I’m not completely 100% happy with either of these positioning statements as both of these companies appear to aim everywhere and focus nowhere. This lack of focus is important to note in itself as it is common in immature markets, but it does make nailing down a semi-accurate reverse-engineered positioning statement a little tricky. But here they are:

3Tera AppLogic Positioning Statement

FOR organisations looking to deploy successful online services to millions of users WHO are struggling to manage the complexity of the infrastructure required to serve online services to online users OUR AppLogic IS A grid operating system for web applications THAT PROVIDES the ability to assemble existing software into portable applications that run on any grid and scale from a fraction of a server to hundreds of servers with a single command UNLIKE traditional dedicated infrastructure OUR PRODUCT makes it extremely easy to deploy scalable web applications without dedicated IT resources and personnel

Appistry CloudIQ Platform Positioning Statement

FOR enterprises seeking to take advantage of cloud computing WHO need to migrate existing applications to the cloud and virtualized environments OUR CloudIQ Platform IS A Cloud application platform THAT PROVIDES enterprises with the ability to move multiple existing applications to the cloud and manage them across multiple cloud environments UNLIKE infrastructure-focussed approaches to cloud computing OUR PRODUCT allows existing applications to be packaged and deployed to a cloud without re-architecture

Both statements are weak in the target customer and their respective pain, need or desire reflecting the lack of clarity in their outbound marketing.

Slides

I’ve placed a slide deck which expands upon this research on Slideshare.net and this is embedded below. If you’d like more information on this study or a copy of the slides, please contact me. Details of  how to interpret REPAMA studies can be found in the Lustratus REPAMA Guide here.

[slideshare id=2493636&doc=cloudsoftware-applicationservicesmanagement-repamasegmentanalysisstudy0-90-091113100411-phpapp02]

Danny Goodall

I’ve been working on a way of categorising value propositions for some time. I’ve arrived at something I refer to as MITICOR which I believe represents the atomic value proposition elements.

By this I mean that all business to business value propositions can be broken down into these 7 base elements. I’m sure I will refine this over time but for our purposes these elements allow us to analyse and categorise the different value propositions that vendors use in their go-to-market efforts.

So what do these categories refer to?

Market

Elements categorised as “Market” include value propositions that relate to the organisation’s market or competitive situation, new product or service introduction as well as the organisation’s marketing efforts such as awareness, public relations or image.

Income

“Income” includes any offer that proposes to increase or sustain existing revenue. In addition new revenue streams fall into this category.

Time

“Time” relates to any value proposition that reduces the time it takes to achieve some organisational objective. Importantly this does not refer to reducing the time to achieve a tactical objective as this would likely be categorised under Operational below.

Institutional

Institutional value propositions relate to the organisation as an entity. Chief amongst these are value propositions that deliver value to shareholders. Taxational or political issues such as “green” policies also come under this heading.

Cost

Reduction in costs, offsetting costs and cost restructuring all fit under this value proposition category.

Operational

Propositions that deliver positive changes to the operational efficiency of the organisation come under this classification. Included in here would be propositions that provide visibility into the current operational effectiveness of the organisation.

Risk

The removal or mitigation of risk at a corporate, personal or project level falls under this value proposition classification.

Multiple Categories

Specific value propositions that vendors create will break down into one or more MITICOR category. It may be that a value proposition from a vendor relates to only one MITICOR category but it is likely that it will break down into more than one MITICOR category.

Examples

I’ve listed below some examples of vendor value propositions and the MITICOR categories that they break down into.

Value Proposition	Potential MITICOR Categories
Reduces development time	Operational, Cost
Reduces development time allowing products to be brought to market quicker	Operational, Cost, Market, Time
Reduce corporate carbon footprint	Institutional
Reduces power consumption and corporate carbon footprint	Institutional, Cost
Provides insight into current financial position	Operational, Risk
Opens up new market opportunities	Market, Income
Allows enterprises to differentiate themselves	Market, Income
Increases service provider sales	Income
Organisations no longer need to purchase expensive dedicated hardware but can instead rent space in our data centres	Cost

I wanted to document this classification in this blog because I will refer to them in future REPAMA research. I’ve also noticed during the course of my research that there are some very predictable value propositions/MITICOR element combinations. In a later blog I will try to document these MITICOR “chains” and specifically how they relate to the members of the decision making unit (DMU).

Danny Goodall.

I had a meeting with a prospective client earlier in the week and we were chatting about how differentiation and positioning in Cloud Computing has to mature.

The contention was that cloud computing vendors and service providers today are too inwardly-focussed and that they should look at the external market to determine their competitive marketing strategies. Cloud Computing differentiation bears all the hallmarks of early market strategy and is very limited. It got me thinking. Imagine if competitive differentiation was carried out in other walks of life the way it is currently carried out by most Cloud Computing vendors and service providers.

Imagine if Porsche for example had spent 7 years perfecting its new sports car, a car that was specifically engineered to be better than the comparable Ferrari in many very specific ways, a car that can do many things for its prospective owner. Imagine then if at the car’s launch it’s main differentiation was:

The Porsche 912 – you no longer need a horse to pull it along the road

Imagine if Xerox copiers, in an attempt to differentiate itself within the highly competitive markets in which it is present made the bold claim that:

The Xerox X987 – eliminates the need for corporations to maintain a typing pool full of typists to make copies of documents.

When the car was a disruptive new technology it was important to explain to its potential users how it was different from the paradigm it was replacing – the horse and cart. Likewise this was true with the discontinuous innovation introduced with the photocopier / photostat / copier. But once these technologies matured to the point where the paradigm was accepted and there was a genuine choice of suppliers to source it from, vendors then had to focus on their real competition and their real differentiation.

But today this is exactly how much of the differentiation in the various segments of the Cloud Computing market is currently carried out. Vendors and service providers have not yet made the leap that Cloud Computing is “an idea whose time has come”. So instead of aiming their fire at other cloud computing vendors, their differentiation strategies focus on the thing that they are replacing – the corporate data centre, on-premise hardware, non-virtualised operating systems, non-scalable web applicatons, etc.

Don’t get me wrong, it is absolutely essential that the prospect knows how cloud technologies differ from traditional technologies, but Cloud Computing vendors must also realise that they are in real competition for this business and lead with clearly drawn lines of differentiation between themselves and their actual, cloud-shaped competition.

The good news is that there are many “positions” still available to cloud computing vendors. And once these positions are established in the minds of  prospects, it will be doubly difficult for their competitors to change these perceptions.

Taking such a position now will give some vendors a great advantage in the nascent Cloud Computing market but others will just feed the horse and call “walk on”.

Danny Goodall