Box, Inc. At $2B: Fundamental Shift Or Yet Another Bubble?

Tyler Shields

$2 billion. That's billion with a "B". That's a lot of money. That is also what Aaron Levie's Inc. Magazine Entrepreneur of the Year company, Box Inc., is being valued at today. According to an article in the Wall Street Journal, Box has said it recieved a fresh round of $125 million in investment, with $100 million of that money coming from a single private equity firm. Also according to the article, Box is expecting to close out 2013 with approximately $100 million in revenue, giving the company a 20x multiple. The numbers are certainly impressive, but is this a bubble or are we seeing a fundamental shift in how businesses of the future will operate, thus justifying the big dollar signs?

A recent article in Forbes stated the following: "Taking a cue from the Dot-com bubble’s playbook, investors have resorted to valuing today’s profitless tech companies on a price-to-sales ratio basis, yet even this metric shows that Twitter’s valuation is quite overvalued at 22 times its expected 2014 sales, which is approximately double the multiple carried by Facebook and LinkedIn (which have high multiples in their own right)."

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Software Companies Can Gain Competitive Advantage By Making Their Pricing Value-Based

Duncan Jones

I help hundreds of technology buyers each year to understand the impact of technology changes on their software contracts, but I also get questions from software providers about how best to price their products. Some are bringing new products to market and want to know how to maximize revenue, while others are struggling with obsolete metrics such as per processor and want to update their pricing for the modern mobile, cloudy world. The answer is usually to find licensing metrics that make their pricing value-based while balancing simplicity and fairness. The more value a customer gets from your product, the more they should be willing to pay for it. If you make your pricing too simple then you won't match value sufficiently closely, which will cause you to price yourself out of some deals and leave money on the table in others. If, OTOH, you try to match value too precisely you risk making your pricing so complicated that buyers will reject it, and you, completely.

For example, suppose you have a product that will help people do their jobs better, so you decide that charging for each user will be a good approximation for value. The potential problem is that not everyone will use your product the same, in terms of depth of functionality and/ or frequency of access. Your single per user price will be unfair to companies with long tails of light, infrequent users, for whom you'll therefore be too expensive. Conversely your pricing will be unfair to you when the customer is mostly power users. To make your pricing fairer you could have different prices for different categories of user, but then you risk being criticized for being too complex.

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Enterprises Are About To Get Tablet Fever. How Can Tech Vendor Marketers Reach Them?

JP Gownder

 

Marketers and strategists at tech vendors who sell tablets won’t want to miss a webinar co-hosted by Simon Yates and me this Friday, September 28th. Aimed at a CIO audience, our webinar leverages a great deal of data from Forrsights and Tech Marketing Navigator on the opportunity for tablets, how to engage enterprise tablet buyers, on the effects of bring-your-own (BYO), and other, related topics. Tech marketers and strategists won’t want to miss our presentation: You'll gain insights into the challenges tablets present for CIOs, and you'll also see hard data on both the opportunity for selling tablets and on how best to engage potential buyers.

When: Friday, September 28, 2012, 1:00 p.m. -- 2:00 p.m. Eastern time (17:00--18:00 GMT)

Overview: It’s safe to say that the early adopters of Apple’s iPad didn’t go out and buy the device because they wanted a new gadget for work. They purchased the iPad because of what they could do in their everyday lives. But it didn’t take long for employees to bring their iPads to the office. If we mark the modern tablet era by Apple’s 2010 iPad launch, then an astounding 84 million iPads and as many as 120 million tablets in total have flown off the shelves. Forrester’s global workforce and decision-maker surveys and client conversations show just how fast tablets are being adopted:

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2012 Tech Marketing Priorities – From 50 Tech Marketing Execs

Understanding the priorities of fellow tech marketers is a great way to tune one’s own 2012 initiatives.   Over the past two months, my Forrester Technology Council colleagues and I have spent quite a bit of time surveying and talking with members (~ 50 tech CMO’s and VP’s of Marketing) about their priorities for 2012.  Before the champagne pops up here in Boston, I wanted to share a few of the priorities my colleagues and I are hearing most about for 2012:

  • Demand management wins out across the board.   In years past, the top priority for our tech marketing members centered around "driving leads into the funnel."  In 2012, tech marketing execs still care about driving leads, but there is an increased desire to trade lead volume for better lead quality.   Quality that comes from strong nurturing activities to help leads move from the top of funnel into the middle and ultimately into a position where they are "sales-ready."  A vocal number of members expressed commitment to building a more comprehensive demand management process where they would balance their lead nurturing and lead generation initiatives appropriately.  
  • Brand/rebranding comes into vogue.  Many of our members have put brand and/or rebranding at the top of their lists for 2012.  The need to create greater market differentiation against competitors and to build market awareness in new markets (e.g. verticals, geographies) were cited as the top reasons for steering funds, resources and time in brand or rebranding initiatives.     
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Brand Advice For B2B Tech Marketers: Q&A With Siegel+Gale

"Branding & rebranding" is rising fast on the list of priorities for tech marketers in 2012.

Over the past few months, my colleagues and I in the Tech Marketing Council have been engaging in a rising number of client discussions around the topic of “brand.” These conversations with our CMO and VP of marketing clients have come in a few different flavors:

  • Branding for Emerging Firms. Small, but not startup, vendors seeking to create better brand position and differentiation to take on the established sector players. (e.g., David and Goliath)
  • Rebrand for Maturing Firms. Midsize growing tech companies ($250M+) with designs on being the next $1B+ firm in their sector. (e.g., “Good to Great”)
  • Post M&A Brand Integration. Both emerging and large tech firms are working to integrate newly acquired companies, personnel and products. (e.g., House of Many Brands)
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Understanding Your Customers’ Habits Can Make A Difference

Earlier this month, I had the pleasure of hosting a Technology Marketing Council Roundtable for a number of Austin, Texas-based members. Gathered around the table were VPs and senior technology marketers from AMD, IBM, Planview, OpenText, Socialware, Troux Technologies, and a soon to be renamed Austin Ventures startup.

Always with an eye toward seeking out relevant and thought-provoking ways to push the thinking of our members, I invited Art Markman, Ph.D., Annabel Irion Worsham Centennial Professor of Psychology and Marketing from the University of Austin, and Principal Advisor Tyler McDaniel from Forrester to talk about how companies can make themselves into a habit with their customers. While there were a number of great insights and peer conversation, I wanted to share my top two takeaways:

Takeaway No. 1: Getting Your Customers To Act Without Thinking. We all develop habits and rituals that become automatic and instinctive. The marketers in companies like Starbucks and Apple spend a lot of time and treasure examining these habits so that they can seamlessly embed their products and services into the lives of their customers. They’ve learned that utilization happens far easier when there’s instinctive action over contemplative thought.

The lesson for B2B tech marketers - it’s time to break our habit of building campaigns that tell customers to “think of us often” and design a new level of marketing that makes customers instinctively act without thinking. Through careful study (see next takeaway), it’s feasible to start laying down consistent, repetitive messages that over time will trigger customers to instinctively act on our products and services versus actually having to think about them.

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Vendors Prepare For Corporate Application Store Opportunities

Michele Pelino

Firms are expanding beyond basic applications, deploying line-of-business mobile applications to address the needs of specific workers including the sales force, help desk, supply chain, logistics, and inventory management personnel. A growing number of firms are using mobile application stores to distribute these apps. In fact, 35% of enterprise organizations currently use mobile app stores, up from 27% of firms in 2010 (see Figure below).

An Increasing Number Of Firms Use Mobile App Stores To Distribute Applications

Mobile application stores gained momentum over the past few years as firms including Apple, BlackBerry, Nokia, and Google developed mobile application stores to deploy applications over their devices. Now application stores are evolving to include corporate mobile application stores. These corporate app stores help firms control employee access to applications and ensure consistent mobile application use across the organization. Results from our 2011 networks and telecommunications survey of IT decision-makers show that nearly 5% of enterprises currently use corporate mobile application stores to distribute mobile apps. These corporate app stores provide an easy way for employees to find and download corporate-approved apps for any officially supported operating system or device.

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Kosten Metreweli, CMO Of Zeus Technology, Talks Demand Management And Lead Nurturing

“If you think demand management and lead nurturing is just automating your process to create, track and passing leads over to sales — you’d be wrong.”

This is an edict from Kosten Metreweli, CMO of Zeus Technology*, during a presentation he gave to a group of CMOs and VPs of marketing in Forrester’s Technology Marketing Council regarding his approach to generating demand and lead nurturing.  For those who don’t know Zeus — the organization is now part of Riverbed Technology and is a cloud-based elastic application solution that helps IT organizations deliver fast, secure, and scalable web applications with the economics of cloud (ex: BBC, Disney, and Domino’s Pizza).

Kosten acknowledges the importance of a solid marketing automation infrastructure, but emphasized that effective technology marketing professionals also need to:

·         Take ownership for ALL revenues (yes, all)

·         Have tight alignment with sales (not just the leadership)

·         Study, define, and evangelize the target personas (don’t admire them just within your office)

·         Map the content strategy to the funnel — from prospect — to deal — to customer success (oh, and by persona too)

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Verizon Apps Store Unveiled At VDC Conference

Michele Pelino

Last week Verizon held its Verizon Developer Community (VDC) Conference in Las Vegas, where the company unveiled an updated and newly branded Verizon Apps store, which replaces the VCast app store. The Verizon Apps store includes improved search capabilities through a partnership with Chomp. Verizon certifies the apps in the store and is reducing the time necessary to test and install new applications to within two weeks. The Verizon Apps store will be accessible on Droid smartphones, and users can purchase apps and pay for them through their Verizon phone bill. Verizon is also creating a new private application store for businesses, which will include applications built by enterprises and third parties to address the specific needs of line of business workers within the organization. These enterprise app stores will provide yet another distribution channel for developers.

It is important to recognize that mobile application developers have a lot of choices regarding which mobile storefronts they use to distribute their applications, including the Android Market, the Apple App Store, and app stores from many other telecom operators and mobile device manufacturers. To capture the mindshare of developers and facilitate the success of the store, it is important to:

1) Provide marketing opportunities for developers. Competitive application stores include hundreds of thousands of applications, making it difficult for developers to get visibility for their applications. Developers also want to ensure their applications are seen by the correct user segments. Offering segmented marketing programs to ensure relevant users have visibility into the appropriate applications is a way to address this issue.

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Amdocs Agrees To Purchase Bridgewater Systems For $215 Million

Michele Pelino

Yesterday, Amdocs, a leading provider of customer experience systems, agreed to acquire Bridgewater Systems, a provider of policy, subscriber management, and network control solutions for mobile and convergent service providers, for US$215 million. The combined solution resulting from this acquisition will combine Amdocs’ existing BSS/OSS and customer experience solutions with network level information from Bridgewater’s solution. The integrated organization will provide service providers with an enhanced ability to monetize data services and to support complex pricing strategies across multiple devices, users, and networks. From a customer perspective, Amdocs and Bridgewater share some key service provider customers including Bell Mobility, Sprint, and Telstra. 

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