It's a shame to get old! My oldest child recently announced that he and his wife are having a child themselves. On one hand, I am thrilled at the prospects of having a smiling infant in the family - that I can hand off for unpleasant tasks. On the other hand, I am in complete, 100% denial about the word that will define my relationship with this child - the "G" word - shhhh, don't say it!
This made me reminisce about work. I remember my years in marketing at Sequent Computer Systems. The sales organization sold products based on "feeds and speeds" that became possible from "symmetric multi-processing." It was exciting stuff. We lived on the cutting edge of technology. Customers bought "products."
My next move placed me in the outsourcing industry. Rather than buying products, customers looked for solutions - usually a functional combination of hardware and software to solve a technical problem. Acronyms such as ERP and CRM were common, and the services industry exploded. Customers bought "solutions."
Now I am at Forrester and witnessing another fundamental change in the market. The financial pressures of the recent (and continuing?) recession changed customers. They now align business investments with technology costs. Customers want "outcomes."
The problem is that tech vendors are going to market the same way that we did 20+ years ago. In today's market, vendors must understand the customer - not in the abstract - but understand current problems and desired outcomes. Adapting your products and messaging to a customer point of view is called "portfolio management." Forrester's sales enablement team would love to hear about your experiences, perspectives, or insights.
SMBs have historically led the way out of recessions – and with the impression in mind that this recovery will prove likewise, tech vendors have been clamoring to roll out new “SMB Specialist” partner certifications. The problem is that most of these SMB certifications are meaningless. The requirement for channel partners to achieve SMB certification in many vendors’ channel programs is that the channel partner has to prove that they have successfully sold to and supported SMB customers. Huh? Sounds like the “chicken and egg” syndrome, doesn’t it?
A few vendors, primarily those with large product portfolios, place the appropriate “breadth” value requirement on their SMB channel partners (as opposed to “depth”, i.e., deep knowledge in one particular technology domain) and require their SMB partners to test on several technology domains, albeit at the “101” (“beginner”) level. Note that most vendors, too, provide no path for their SMB-certified partners to reach their top partner tier (most vendors still reward revenue contribution over everything else), so those partners are at a competitive disadvantage to large channel partners that target both the enterprise and SMB markets.
The problem is vendors’ view of “breadth” with respect to SMB partner certification. Cisco Systems’ view of “breadth” is competency across the network and collaboration domains; Symantec’s is competency across the security spectrum; Microsoft’s is office suite and application software; and HP’s is primarily hardware and IT management (at least until it integrates the 3Com channel program).
It’s a well-established fact that social media is every bit as – if not more – influential for business decision-makers (B2B) as it is for consumers (B2C); Forrester clients can read more here. And SMBs are the most prolific of all business-size segments in utilizing social media and online communities to inform their technology purchase decisions. So where are SMBs turning to for that information? Where can you check the pulse of SMBs’ thinking?
Continuing my musings about the impact of cloud on our industry (see last week’s blog), I’m in the middle of a cloud project where we are identifying and profiling potential channel partners for an ISV that is about to launch a systems management product for cloud environments. I must say, I’m surprised by the number of channel partners already talking about cloud.
It reminds me of a conversation with staff at Nimsoft, a company recently acquired by CA, about how they were promoting their cloud offerings. My personal view is that Nimsoft managed to complete their exit strategy so quickly and successfully because they focused all of their new product announcements and general positioning toward the cloud. Coincidentally, CA had decided to turn up the heat on its own cloud campaign and promptly bought three technology companies to strengthen the cloud offering and show their commitment — Nimsoft, Cassat, and 3Tera.
While Cassat and 3Tera were cloud-specific solutions, Nimsoft was already successful as a provider of systems monitoring software to enterprises and managed service providers. My theory is that their cloud image was the result of a considered repositioning exercise that culminated in their placement on CA’s wish list. Here’s another example: Yesterday, Adobe announced its intention to acquire Day Software, the Swiss content management ISV. Day Software had a consistent ECM business with modest growth, but I notice that they turned up the cloud messaging over the last months — I suspect this is what got them into Adobe’s sights.
This week, I was at the Microsoft Worldwide Partner Conference in Washington, D.C., and it was all about THE CLOUD. Now, many colleagues argue that Microsoft will be the second-to-last major vendor to show a 100% cloud commitment, saying that “it’s too embedded in its traditional software business,” “it doesn’t understand the new world,” and “it’d be scared of cannibalizing existing and predictable maintenance revenues.” But I remember Stephen Elop, president of Microsoft Business Systems, tell me with a mischievous grin that he’ll probably earn more money from Exchange Online than the on-premise version — “firstly, it’s mainly new business from other platforms like Lotus Notes, and second, I even generate revenues by charging for things like the data center buildings, the infrastructure, even the electricity I use.” That was in Berlin last November. I suspected then that Microsoft did get it but was just getting its platform ready. This week, I am convinced — Microsoft is “all in,” as they say.
And at the Microsoft Worldwide Partner Conference, it was driving its partners to the cloud as aggressively as any vendor has ever talked to its partners at such an event. All of the Microsoft executives preached a consistent mantra: “MOVE to the cloud, or you may not be around in five years.”
Microsoft’s cloud-based Business Productivity Online Suite (BPOS) is already being promoted by 16,000 partners that either get referral incentives for Microsoft-billed BPOS fees or bundle it into their own offerings (mainly telcos). There are nearly 5,000 certified Azure-ready partners. This week, Microsoft turned up the heat with these announcements:
Last week, in addition to presenting at my quarterly Forrester Teleconference, I spoke at a Webinar hosted by the IT Services Marketing Association (ITSMA). I was in illustrious company: David Edelman, partner for the marketing and sales practice at McKinsey; John Lenzen, VP and global head of marketing at TCS; plus our host, Richard Seymour, managing director at ITSMA EMEA. We talked about the emerging organization model and competencies for marketing organizations in the tech industry.
Richard opened with this really interesting data slide, which shows that service providers are actually reducing their marketing spend in a dramatic fashion (see below).
Our recent survey confirms the 2010 increase in marketing budgets and reveals much more about how service provider marketing differs from other industries (see this report). Richard then listed some of the challenges that marketing is facing and postulated that “marketing has to change.”
David talked about the impact of the digital marketing challenge and discussed four critical questions that marketers should be asking themselves:
Last week, I held my quarterly Forrester Teleconference and discussed my April report on how European tech buyers use social media. Usually, we Europeans are asked to speak twice in the day - once at a convenient time for European audiences and once for our clients in North America. Unusually for an analyst, I hate repeating myself. So I elected to present the European slot in German and present specifically about Germany. This was, I think, a first for Forrester. Of course, we also leveraged the opportunity to get a few prospects listening in and even had several journalists collecting information. Now, not every Forrester analyst can present in German, so don’t expect all of us to do this, but the fact is: We actually have more German-speaking analysts than that other research company.
Our B2B Social Technographics data shows that German social media activity is really quite heavy: In some categories, the numbers we report show more aggressive behavior than in the US or other countries. After several client meetings where our data was questioned - especially by more experienced marketing executives who themselves are not using social media and expect the same backwardness from their peers - I am now well equipped with backup data that proves our points. So here is what I told the audience about German social media usage by tech buyers:
Last week, I was in Washington working for HP at their Software Universe event. I moderated their customer press conference, had several strategy meetings with HP execs, continued my preview of a new product they’re planning, and even got to play golf with three of their execs. Life can be tough as an analyst!
In the press conference, attended by around 40 journalists from all continents, I encouraged five HP customers to talk about how they were innovating within IT: Neuberger Bergman, Seagate, McKesson, Blue Cross and Blue Shield of Florida, and CollabNet. My challenge as moderator was to help these spokespeople bring across their messages (not everyone is a public speaker) and ensure that there was some “news” for the journalists to write about. So I kicked off the session with a Forrester slide with these five trends/challenges in IT. Each customer then spoke to the trend that affected them the most:
Virtualization and "cloud" adoption adds to complexity of IT management
Continued pressure to prove the business value of IT
Automation of optimized processes within IT
Understand and measure IT delivery in business terms
Agile development brings Business, AppDev and IT Operations closer together and coordinated
It has been quite a week for me. I’ve been finishing off a client study of tech buyer Social Technographics -- 130 enterprises in their home European country. The data is good: consistent with what we had already gathered in our published work (see our April report); but of course, we have collected much more detail around this client’s specific market. But the client does not accept the data.
Curiously, I have had several conversations with tech vendor marketers who doubt our Social Technographics data. Peter Burris and I debated at length last month with an industry marketing manager for a services company. He said that only half of the people he sold to even had a PC (he was selling to Government accounts). And this project client of mine also refuses to believe the data we have collected. Their issue is actually more about being credible in front of their own executives. They are afraid that, because their own executives do not use social media themselves, they’ll reject the concept that 43% of their potential audience are Creators, which is what we found out.
I did provide a clarification on our Social Technographics ladder methodology in response. A Creator population of 43% does not mean that nearly half are writing blogs (that number is actually 28%). Creators is a combination of 5 different questions: it is about publishing a blog post, your own Web pages, uploading a video, uploading audio/music or writing articles and posting them. Whoever does ONE of these things at least monthly is called a Creator. But the chances are still that this client will just shelve the data we have collected, plus the analysis and recommendations on a suitable social media strategy, in order to avoid having to argue against, or educate, their own management.
I had the pleasure of hosting an IT Services Marketing Association (ITSMA) workshop, “Building the Business Case for Social Media in B2B Marketing” at our London office this week. There were 12 IT services marketers attending, and we all enjoyed very informative presentations led by Moira Clark, Professor of Strategic Marketing at Henley Business School. Moira has lots of practical experience and did extensive research work for Cisco in 2009. We also heard from DNX Ltd, a marketing agency with several tech vendor clients, as well from LinkedIn.
I certainly learned a lot personally about using social media - there was quite a bit of “hands-on” work: assessing a company’s social media strategy, comparing listening platforms, and launching a community. Here are some of the highlights that I remember most (and consider me an experienced tech marketer now trying to understand the impact of social media on the marketing mix).