lustratus REPAMA

Archive for the ‘positioning’ Category

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’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’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 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

I’ve been a bit busy recently and so instead of finishing off the complex REPAMA SAS into the “Cloud Computing / Cloud Software / Cloud Management / Application Services Management” study, I decided to produce a rough draft of the much simpler REPAMA into Force.com’s go-to-market strategy instead.

Whilst the segment analysis study only covers Force.com at the moment, I will add additional vendors/providers into the study over the coming weeks. If you have any suggestions who I should compare to/with Force.com, let me know.

I’m quite pleased with the result. Not because of any specific talent on my part but rather as I’ve already said here, Force.com’s marketing is a case study in how to take a new, disruptive technology to market. They understand their audience, they know what problems they solve and they know why they’re better/different. They communicate in clear language and they repeat their positioning strategy again and again and again consistently in all of their out-bound marketing communications. They’ve had successes and they’ve been able to document this and use it as proof of the claims they make. It’s been a joy to reverse-engineer it. That’s not to say that I think it’s perfect – they do tend to mix their audience and messages (audience strata mismatch) but it is very good indeed.

As I’m working through the cloud computing market and helping some vendors with their go-to-market strategies I’ve decided to share this and some  future studies on here because as I said in my ironic blog mission statement all those months ago, I want to highlight best practice in marketing communications and product marketing through this blog. So I thought it would be useful to share what value propositions and messages a market leader is using to address their prospects.

Anyway, below is the positioning statement that I’ve reverse engineered for Force.com’s proposition to end-user organisations. (I don’t plan to tackle the ISV or SI propositions yet)

It’s a little woolly and raw at the moment but even in that state it’s clear that Force.com knows its market, its competition and its USPs. The REPAMA SAS containing just Force.com at the moment can be found online at  Slideshare.net and is embedded below.

[slideshare id=2147195&doc=platformservices-generalpurpose-repamasegmentanalysisstudy0-90-091006182316-phpapp01&w=576]

If you’d like a copy of the slides let me know. For details of how to interpret the results of the REPAMA study please review the Lustratus REPAMA Guide.

Danny Goodall

Steve and I met with the good people at Force.com this morning to get an update on their approach to the Cloud Computing market and to hear their vision for the future.

I’d already carried out some REPAMA analysis of Force’s marketing proposition and, just like I found when I looked at Oracle’s ESB proposition,I was very impressed. With some vendors’ marketing propositions I have to spend a long time inferring what their strategic marketing strategy is, for others the strategy is so well communicated to their prospects through their out-bound marketing communications that my job is made easy.

And so it was with Force.com…

Unlike complex on-premise .Net and Java development tools, Force.com is half the cost and five times as fast

I’m paraphrasing and simplifying of course but that is about the nub of the proposition. It’s repeated over and over again and as we found out this morning there appears to be some substance behind the claims. That said, neither benefit metric (cost nor time) can be impartially validated. But that doesn’t really matter. I know, I know, of course it ‘technically’ matters but this is about market perception where Force.com was first to grab a space in prospects’ minds and that will be tough if not impossible for other vendors/providers to wrestle back.

Force.com is signing up end user customers and ISVs in ever-increasing numbers and with their SFDC subscribers subsidising the provision of the infrastructure to their Force.com platform users they don’t have the set-up costs and growing pains of some of their potential rivals. It’s an impressive operation and one that I’m sure we’ll touch on in a bit more detail in the coming months. But taking off my marketing analyst hat and putting on my technology analyst hat for a moment, I have one concern about these off-premise platform as a service propositions. And the people we met from Force.com were, as yet (although I’m meeting with one of their techies who I know from a previous life for a coffee this evening) unable to answer satisfactorily, and that concerned workflow and process orchestration.

How does a process that is developed with/within Force.com play a role in an externally managed process/service orchestration or workflow? The answer for process orchestration appears to be that any fragment of a Force.com application can be exposed as a web service which means that you have enough granular control (and associated complexity by the way) to do anything you want. But what about an off-premise managed workflow that relies on providing UI from a number of different on-premise and off-premise systems to achieve the result? Can Force.com UI and logic integrate into that sort of external situation? We’ll see.

Anyway, as I said I was impressed as much by what I heard as what I had seen about the way the company executes. On top of it all they have taken cloud computing from the theory and made it real for many users. So, as I said, hats off to them.

Danny Goodall

Whilst carrying out some research recently I realised that I need to arrive at a more granular categorisation of the types or categories of value propositions that vendors use.

And in attempting to do that I stumbled across an interesting read on the ITSMA site entitled Why You Need Three Different Types of Value Propositions. I hadn’t heard of ITSMA before but it appears that they  focus on helping high-tech organisations to market solutions and services. I’ll certainly track them from here on in because I felt that I could have written the blog entry myself as it matches my own personal experience very accurately.

The three types of value proposition that the author refers to are in fact not the same as the categories of value proposition that I’m looking for but more of that in a future blog entry. But, I was also struck by the process that the author Julie Schwartz advocates for developing value propositions see below:

Step 1. Understand the market and clients.

Step 2. Determine your true differentiators.

Step 3. Articulate unique value based on customer need.

Step 4. Quantify value.

Step 5. Elicit internal and external feedback and revise.

Step 6. Collaborate with sales to communicate value propositions.

as again it is similar to our own advice on building propositions in my blog entry from last November here.

1. Understand what the competition is doing

2. Understand your own capabilities and how you are different from the competition (*and change your positioning and messaging if required)

3. Understand where your prospects are still willing to spend money – the funded initiatives

4. Understand what pain is causing the prospect to still spend money – what are they looking to achieve?

5. Create messaging by mapping your own capabilities and differentiation, to the prospect’s pains and their willingness to spend

6. Retrain the sales force with the new focus/messaging

7. Use the right medium to get your proposition in front of the right person in the right organisations

Having said all of that, I do feel that there is a terminological difference between Julie’s value proposition and my own. I think the use that Julie has settled on, and let’s be clear there are no hard and fast defitions for the stuff – it’s a matter of personal preference, is similar, but not identical to some of the elements of what I would refer to as the positioning statement.

Personally, I use the value proposition term in two ways. Firstly, and very generally, the statement of the type of benefit that will be enjoyed AFTER a prospect has become a client.

Examples:

It will reduce the risk of failure

It will deliver projects quicker

It will increase profit

Secondly, the internal strategic marketing deliverable that product marketing/communications individuals are responsible for crafting is a formal definition of a specific proposition to a specific audience.

For this I usually follow a format similar to the one below:

1. A statement of quanitifiable benefit that a specific audience will enjoy AFTER they do business with you

2. An interpretation of what that benefit will mean for the specific audience

3. Proof of where the company has previously delivered this value to a similar audience and what the result was

An example (numbers only to illustrate the sections above):

1) By utilising our technology, mobile telephone operators can roll out new services between 2 to 3 months earlier than traditional approaches.  2) In a very competitive market this provides significant competitive advantage and increased revenues as enjoyed by 3) XYZTelco who we helped to bring a location-based SMS service to market in under 3 months from project inception. This led to them gaining a market leadership position for this service.

Anyway, I’ll revisit the categories of benefit/value that I’m really interested in an an up-coming blog but I thought I’d share this interesting read with you.

Danny Goodall

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.