It's hard to believe that a company could burn through $225 MILLION dollars in 11 months, but it looks like that may have been exactly what AirWatch did. According to data released by AirWatch and written by financial analysts (links to all data sources at bottom of post), AirWatch likely had burned through nearly all of its available cash in record time. Based on an assumption of $120K burn per employee (fully loaded) per year and an assumed removal of $50M in equity at the time of the venture round, AirWatch would have had somewhere between 5 and 6 months of runway left as of January 2014. These assumptions are corroborated by the fact that VMware has contractually extended AirWatch an offer to provide a bridge loan if the acquisition deal does not close in the next 6 months.
What did AirWatch do wrong? It sounds like they may have made some over-assumptions with regards to their growth rates for 2013. It could have possibly been the adoption rates in countries outside of North America. It may have just been bad luck. Or it could even be a cooling off of interest in mobile device management technologies based on containerization. We won't know exactly why they were getting near the end of the runway, but what we can say is that VMware may have overpaid in multiple. Based on the data provided by VMware of AirWatch bookings for 2013, VMware paid somewhere around 16x bookings for AirWatch. Man, that's a lot of bread!
If you work in social media, you've been hearing variations on a theme for the past week: Facebook is in trouble! It's lost young users! It's getting crushed by upstart social networks! Eighty percent of its users will disappear in the next few years!
But as was the case with Mark Twain, reports of Facebook's death are an exaggeration:
That Princeton report seriously misses the mark. Last week, two Princeton PhD students circulated a report predicting Facebook would lose 80% of its users by 2017. They used epidemiological models to predict that, like MySpace before it, both the rise and fall of Facebook would look like the spread of a virus. But the research wasn’t peer-reviewed, and wasn’t published in any journal, and you can perhaps see why. Facebook itself did a pretty good job of pointing out the limitations of the researchers’ methodology. And I see another problem with this study: The MySpace ‘virus’ hardly mutated in all the years it infected the world, but the Facebook ‘virus’ mutates frequently. One of Facebook’s greatest strengths is its practice of regularly adding new features and functionality to its site; this both ensures it infects new users and also makes sure existing users don’t become immune to its charms.
Google, the online search superpower, has for years sought to maximize "eyeballs" -- in search marketing, a colloquial term for ad impressions viewed online.
Lately, though, Google's been going after a new kind of eyeballs. The literal kind.
Hot off of its announcement of a future product roadmap for smart contact lenses, Google today announced a partnership with VSP -- the largest optical health insurance provider in the United States -- for Google Glass. The New York Times quoted me saying, "the key business model of the year for wearables is becoming embedded into the health care system." By injecting wearables into health care:
The addressable market expands.VSP serves 59 million members with vision care insurance.
Costs go down. VSP will offer subsidized frames and prescription lenses tailored to Google Glass. Some VSP members save additional money on purchases with pre-tax payroll deductions for the money they spend on optical care.
Credibility goes up. By coordinating with opticians and opthamologists, Google Glass can be recognized as consistent with healthy optical practices.
Last week I spoke with the VP of Sales for a tech company that used to have the hottest product in his market. In housing terms, they used to be an exclusive and much sought after neighborhood, but now the competition has moved in on all sides and sales are down. His sales force is facing a vastly growing number of competitors. Some are much larger and have broader portfolios that give them better presence in customer accounts. They’re getting squeezed and are finding it harder to compete in deals where they used to be the only solution.
Your only true differentiation comes from how your reps interact with your buyers
What’s interesting is that the vendor mentioned above is still experiencing consistent success when his company’s salespeople gain access to executive buyers early in their decision process and work in a consultative manner with those buyers to shape a vision of a solution. When that happens, salespeople are confident discussing the business issues faced by those buyers. They’ve found certain industries that they know well where they are able to do this consistently. They are not getting squeezed by competitors and they are winning. But often, they're chasing deals that competitors started and reps are drawn into an RFP frenzy that chews up time and resources. After all, they used to win these deals, but now they're pretty demoralized and reps are starting to leave.
I hate to admit it, but I need to quote a line from the movie “Beaches”. In the attached clip (its only 4 seconds) CC Bloom, the self-absorbed actress played by Bette Midler, utters a fantastically relevant quote for today’s sales and marketing professionals.
This one quote best sums up the state of affairs in the trenches. Your firm is sending your sales force to talk about your company and not the needs of the people who have the wallets to compensate you. Ulitmately, sales forces are being prepared with a variety of messages about how great your company is (but enough about me) and they are getting a few hours of executive-skill training in a day or two of genric executive selling courses (lets talk about you.). Unfortunately, most lack the empathy of those executives to engage in a converation about the clients real business issues and revert back to talking about things they know (what do you think about me).
What proof do we have of this?
Each year for the past 5 years, Forrester has conducted an executive buyer study comprising of two parts. The first part is a 38 question survey gathering the opinions of executives across the globe in different functions (finance, sales, manufacturing, human resources, IT, etc) and at different levels. We follow up these survey questions with at least 100 interviews with roles that fit our profile to catch the color commentary that really brings richness to the insights.
My esteemed colleagues Renee Murphy and Nick Hayes joined me in a fully collaborative, marathon evaluation of 19 of the most relevant GRC platform vendors; we diligently pored through vendor briefings, online demos, customer reference surveys and interviews, access to our own demo environment of each vendor’s product, and as per Forrester policy, multiple rounds of fact checking and review. The sheer amount of data we collected is incredible.
Today, Technopolitics welcomes back Fatemeh Khatibloo to continue our discussion of privacy and data transparency in honor of Data Privacy Day 2014, held on January 28. Data Privacy Day is held in honor of the 1981 signing of Convention 108, the first international treaty on data and privacy, by the Council of Europe. With privacy and data transparency now a mainstream issue, Fatemeh discusses how companies can use this moment as an opportunity to build stronger, more trusting relationships with their customers by being more open, clear, and targeted with data collection and retention.
Fatemeh will also be hosting a joint webinar with Forrester identity and access management expert, Eve Maler,"Contextual Privacy: Making Trust A Market Differentiator" tomorrow in honor of Data Privacy Day at 1PM EST. Be sure to join and get a more in-depth look at how companies can take advantage of the opportunity for deeping the ties of trust with their customers through contextual privacy.
We recently published an online retail forecast for Asia Pacific, followed by an online forecast specific to China. The numbers are staggering! To give you an indication of the speed at which eCommerce is taking off in China, consider that recent figures from the State Post Bureau of China indicate that more than 6 billion packages were shipped in the first three quarters of 2013 – an increase of 61% from the same period in 2012. Factors contributing to China’s massive eCommerce market and rapid growth include:
The Alibaba Group. Unlike our U.S. and European forecasts, Forrester’s online retail forecast for China includes both B2C and C2C online sales (the other forecasts include only B2C). In China, B2C and C2C online sales are strongly influenced by the Alibaba Group’s websites Tmall and Taobao. Tmall, which became a platform independent from Taobao in 2011, is making news for its unprecedented sales and has a long list of partner brands including the NBA, Microsoft and Gap. Apple made news recently when it opened a store on Tmall in addition to its existing direct-to-consumer site. The Alibaba Group also has a stronghold on the eCommerce payments space with Alipay, which, according to Forrester’s Technographics data, tops the list of preferred online payments among metropolitan online shoppers in China.
Our application development and delivery (AD&D) team has recently launched our survey on digital customer experience initiatives, and we’re looking for information on your digital customer experience strategy and technology investments. Some of the questions we’d like to get answers to include:
What projects (if any) you have planned for this year.
Details about what those projects look like (e.g. budgets, staffing, and primary decision-makers).