Archive for the ‘messaging’ Category

OK so having arrived at the first cut of a segmentation model for the Cloud Computing market, I am now embarking on a series of Reverse Engineered Positioning and Messaging Analysis (REPAMA) studies.

The problem I now face though as I start tp look in detail at various cloud vendors’ marketing propositions is that their products, capabilities and value propositions all appear to blur into one.

I guess this is a symptom of the early market nature of Cloud Computing. I would expect that as the market develops, real prospects will make real decisions based upon their real needs, and real differences will be stressed and perceived between the products and services of different vendors/service providers.

But right now the general approach I see is that no matter which product or service of a particular vendor I’m looking at, the proposition to the prospect typically boils down to.

Cloud Computing is good

…and this fits for any product in the portfolio. I see…

Cloud Computing does this, Cloud Computing enables that,Cloud Computing reduces this and Cloud Computing increases that.

Fine. But there are a couple of problems with that.

Firstly, and somewhat obviously, if all vendors/service providers simply evangelise the category like this instead of focussing on what they specifically can do, there is zero differentiation. And with zero differentiation the business typically goes the way of ‘market leader’ or at least the vendor/provider with the greatest market reach.

Secondly, if I were a prospect and all I hear about is the generic capabilities and benefits of the cloud, how do I know what each of the different products in your portfolio could do for me? It might be good to talk to me in terms of what the individual products do, how they are each different from/superior to competitors’ products or alternative approaches, what tangible things each product changes for me and what I would be left with AFTER I’ve bought each product from you.

I should stress that there is another category of proposition developing in my analysis which says cloud is good BUT there are lots of problems and potential problems to address first.

This is an obvious proposition and one that vendors/providers in new paradigms like cloud quickly rally around. It goes something like this…

Cloud will do lots of great things for your organisation but you have to make sure you do it right or all sorts of bad things could happen…

The problem with this proposition is that there is an obvious implication.

…and if you don’t solve these things, you’ll lose your job.

This negative connotation and association with the potential failures of cloud initiatives are perhaps not the best way to attempt to mobilise prospects. Having said that, as the movement toward the cloud builds pace it will likely be this “proceed with caution” proposition that gains traction. As cloud becomes a given, so it will be the vendors/providers that can prove that they can quickly address the deficiencies inherent with current cloud strategies and mitigate the risks involved that will rise to the top.

Anyway these are some of my early findings that I thought I would share.

I’ve decided to first look at the Cloud Software / Cloud Management / Application Services Management category from the segmentation model. And I’ve decided to take a look at Appistry first – mainly because its a category that I’ve had direct experience of but also because in a market as broad and as complex as this one, well, you have to start somewhere.

I’ll keep you posted as I move forward.

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.

Lustratus’ REPAMA consulting business has moved house. Well strictly speaking we’re still at the “Can’t remember where we put the ironing board and has anyone seen the cat?” stage of the move. But we’ve taken the first step by moving the repama.typepad.com blog to it’s shiny new location at www.lustratusrepama.com. So whilst it’ll be a while before we fling open the doors and invite the neighbours around for drinks, we’ve at least got somewhere to sleep tonight.

The problem was that the Lustratus REPAMA proposition had outgrown it’s home at www.lustratus.com which was always designed to be a place for end users and other interested parties to read and download Lustratus’ published research on infrastructure software issues.  We had tried to make it a place where vendors could also come and access competitive intelligence but it was clear that we needed to separate the two offers – just as our business is seperated into the “church & state” of analysis and consulting.

So for the moment www.lustratusrepama.com is the just new home of the REPAMA blog but over the coming weeks it will become the way in which Lustratus Research Limited communicates its marketing consultancy and competitive intelligence offers to technology vendors.  As well, I hope, as being a home for the exploration of marketing  best practice.  Lustratus.com will of course continue to be the centrepiece  of our end-user research practice.

Danny Goodall.

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

The good people at 29West have asked Lustratus to moderate a panel discussion at their upcoming Zero Latency Tour event in London on Tuesday 19th May.  It promises to be a good discussion as the participants all have solid real-world experience of building and implementing low-latency systems.  We should have a lively debate attempting to answer the basic questions of how close to zero latency you can get and how you go about achieving it.

Speakers include:

• Nigel Woodward, Global Director Financial Services, Intel
• Martin Thompson, Director of Engineering, Tradefair
• George Andreadis , Head of AES Liquidity Strategy, Europe, Credit Suisse
• Mark Reece, eTrading Solutions Architect, HSBC

A similar event is also taking place in New York in June.  Visit the 29West web site here for more information.

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