Posts Tagged ‘early market’

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

I’m continuing the REPAMA Segment Analysis Study into the Cloud Computing market attempting to arrive at a solid market segmentation and two things have become very clear.

Firstly, every vendor with a remotely related proposition appears to have added the word “cloud” to their product name, presumably in an attempt to bask in the reflected glory that cloud computing provides, perhaps in an effort to appease their investors. This means that there are a large number of vendors claiming to be part of specific segments that may or may not have legitimate claims. This makes the process I’m going through confusing and messy. And if I, as a marketing analyst am having problems, I wonder what sort of success a legitimate prospect would have in finding the product/service they need.

Secondly, the market is still in flux and as such nailing a clear segmentation down is, for some time, going to be like herding cats. This is a classic early market symptom where the market is currently led by vendors’ own ideas about what is needed and what is possible. Once the market starts to form properly and vendors align behind what their prospects and customers are actually buying, then the segmentation will become clearer.

But I have to start somewhere and the good news is that I’ve been corresponding with both Peter Laird of Tendril Inc. and Brad Buck of OpenCrowd and they both have given their blessing to this project and have offered to help if they can. Most importantly they are both happy for me to use their work on a cloud computing taxonomy/model, here and here, as a starting point for my cloud market segmentation.

One thing that I quickly realised was needed for my purposes was some form of professional services (human skills) offer. Plenty of large consultancies, smaller integrators and boutique IT shops offer consultancy services around cloud computing. Both Peter and Brad have rightly focussed on the categorisation of product capability and customer need in fleshing our “their” taxonomy. But to fully understand what propositions are being put together to service the cloud computing “need”, I must include cloud computing professional services.

So far I’ve identified the following list of services under the category of professional services. I suspect that it will grow some and be rationalised some before I finish.

• Strategy, planning and design
• Migration and implementation services
• Testing
• Security
• Cloud application design/porting
• Support services and training

I suspect that cloud application design/porting will be a relatively niche category for a while and that testing, security and support services may all become amalgamated as I carry on my research.

Another major category of cloud computing offer that has also presented itself is that of “Channel”. A number of organisations are white labelling, OEM’ing, reselling or otherwise fronting cloud vendors/service providers’ offerings. One concern that I have is that this sort of partnering is very common in hot early markets where one vendor with no cloud proposition hastily signs a partner agreement to simply tick a box. It does’t mean that either company will do any real business.  I’ll do some digging and and if it looks like a real enough category I’ll add it and blog on it soon.

Danny Goodall.

I remember using the phrase “You’re marketing 8 fingered gloves” with a client a few years ago.  And without wanting to show any disrespect to those unfortunate or fortunate enough to have more than 5 digits on each hand, I think it illustrates perfectly the dilemma that some technology vendors face.

Imagine you are the VP Marketing for Octodigit Inc.  – a manufacturer of 8 fingered gloves for men.  Your market is pretty small.  Really small in fact.  Getting new customers is quite a chore and involves some incredibly detailed research, focus and a lot of leg work.  However, when you find a prospect – an octodigit (or whatever the term is) male who works outside who has cold hands, he’d buy from you in a flash.  You alone understand his unique problems.  You have the solution (the 8 fingered glove) to his problem (cold 8 fingered hands).

But then again our friend has other possible solutions.  No, there isn’t another 8 fingered glove supplier.  Octodigit Inc. really can claim to be the marketing leading supplier of wool-based hand apparel for the discerning multi-digit male.  However our 8 fingered friend is looking for a solution to his cold hands problem, he’s not necessarily looking for a glove.  So he could consider a coat with big pockets as an alternative.  And there is even the option of surgery which would fulfil a life-long dream of being able to wear five-fingered gloves like the majority of the rest of the planet. So our friends at Octodigit Inc. still have some selling to do but chances are they’ll be successful – but only once they’ve managed to find a prospect.

The original client who prompted the 8-fingered glove anecdote was marketing an object database, the target audience for which were self-selecting.  They were highly technical individuals who were object software fanatics, they needed to persist objects to a store that maintained object properties and object-oriented principles and they needed to be able to carry out lightening fast searches of the resultant database.  However, as is often the case, the business making the purchasing decisions behind these techies just wanted a cost effective solution to store and retrieve complex, related information. And as time went by, plain old relational databases were “good enough” for the task.

The result for my client was that once the fashion of object-orientation had passed, their sales slowed and they had to put their energies into other areas and recognise Object Databases as the 8 fingered niche they really are.

I admire focus. As an early market software vendor it takes huge courage to turn your back on other potential markets.  As a result I really admire companies that have the self-control and self-confidence to stay focussed on their audience, their value proposition, their messages and their prospects.  The challenge for vendors therefore is to segment the total addressable market in such a way that there is enough of an addressable audience for whom you are a perfect solution but at the same time ensuring that the market size gives enough opportunity for growth.

And remember that a coat with deep pockets is a valid solution to the problem of cold 8-fingered hands.

This topic came to mind recently when I looked at Solace Systems and 29West who each take a different approach to high performance messaging.  One vendor certainly appears to be marketing a 5 fingered product that appears to a very broad audience, but the other, whilst not sporting 8 fingers per hand, certainly looks like a good 6 to me.  I’ll post the details on them both soon.

Danny Goodall

Post script.  I know the image has 6 fingers and not 8 but unsurprisingly since Octodigit’s sad demise finding a picture of a glove with 8 fingers has proved a little difficult.  I also know that the depending on where you originate from, the thumb may not constitute a finger.

So what is this blog all about?

I’ve never been a fan of mission statements for the sake of mission statements.  I guess that is because most that I read are painted in the blandest shade of beige or taste of vanilla. This tends to make them less of an “inspiring, rallying-call” type of mission statement and more of “a collection of boring indisputable facts that we think the CEO won’t fire us for putting down on paper” type of mission statement.

Mission?

That said, I think it’s worth setting out a plan for the type of material that we’ll be covering in this blog in future editions. So here goes. I want to write about the efficaciousness or otherwise of the strategies and tactics that vendors in certain market segments use to reach their audience.  I’d like to compare and contrast the marketing efforts of certain vendors and even rank them.  I’d like to give awards for good as well as bad marketing and I’d like to start a discussion about best practices in B2B infrastructure software marketing.  I want to look at the tactical side of marketing such as press and analyst management and lead generation as well as the strategic side. We’ll be looking to use our REPAMA methodology (more of that below) to infer actual vendor positions against the claims they make.

REPAMA?

Well REPAMA was created by a desire to get competitive intelligence on early market software companies.  I realised that analysts didn’t or weren’t able to track early market vendors which made creating competitive strategies very difficult.  Even in mature markets, it was tough to really understand the detail of how certain vendors were taking specific products to market.  So I set about designing some exercises that would allow me to infer key strategic marketing strategies from the way these companies address their market.  Since then we’ve expanded on these exercises to produce a methodology that allows us to build comprehensive comparisons of vendors’ positioning and messaging by reverse engineering their marketing strategy from the way they approach the market.  Hence REPAMA is our Reverse Engineered Positioning and Messaging Analysis methodology.

Who is we?

Well “we” is Lustratus.  I formed Lustratus with Steve Craggs and Ronan Bradley a couple of years ago as a marketing consultancy and market analysis organisation.  We’re very focused on a small number of infrastructure software segments and we help vendors to better understand the market landscape in which they compete and ultimately to clearly communicate why they believe their technology will be of benefit to their prospects.

Me?

Well I’m Danny Goodall but I’m sure that Steve and Ronan will also contribute to this blog.  For the first 10 years of my career I was a techie but moved into marketing when I realised that the company cars were much better.  I’ve worked for many vendors in field marketing, product marketing, product management and VP Marketing positions and for the last 4 years I’ve been consulting to many others helping them to set or correct corporate marketing strategies or to improve the effectiveness of their tactical field marketing programs.

You probably ought to know that I’m also a massive fan of Southampton Football Club.

Danny Goodall