Marketing Memos

Remember that in these times of chaos that there is money to be made by sorting it all out.

Just ask Citigroup, AIG, JPMorgan Chase, Goldman Sachs Group, Ford, GM …

The mobile industry makes chaos appear orderly by comparison. Like the internet (and other largely unregulated industry) innovation occurs so rapidly in the mobile market that your new handset is obsolete before you make your first call.

(Did you know that you could call people using a mobile device!?!?!? I thought they were tiny personal computers – a means for letting Outlook nag me while away from the office.)

There are three markets where making order from mobile chaos is proving profitable. These include mobile web application platforms, mobile application testing, and mobile analytics. In other words making apps, testing apps, monetizing apps.

Mobile application platforms are application servers with hooks for managing myriads of mobile machines. These servers go a few steps beyond regular web servers in that they map all the different mobile device screen sizes, resolutions, Java versions, bugs and quirks, etc. In rendering an application, these servers compensate for as many of these variables as possible. The Java inspired theory is that an application should be authored once and executed well regardless of the underlying hardware, operating system, browser as well as the phase of the moon and mood of the gods.

Since mobile devices have become an extension of our lives, these app servers also handle a fair amount of data interchange. Tying the mobile device and data resident on it with back-end data pools is now a common reality. Well, that has been a reality since the advent of two-way pagers (I know – I helped devise some of that madness). But mobile apps servers abrogate the need to either tailor the application for many different devices or the risk of locking into one vendor’s handsets. Mobile app server vendors leverage industry chaos to earn their keep.

Akin to this are mobile application testing service. Silicon Strategies Marketing client DeviceAnywhere basically own this market, though there are some pretenders to their throne. DeviceAnywhere doesn’t try to mask the difference between handsets. They quite purposefully expose every quirk and variant in an end-to-end suite of testing tools (hands-on, scripted, unit and system testing) using real handsets. DeviceAnywhere leverages industry chaos to earn their keep.

Most interesting though is analytics. The folks at Omniture seem to be a couple of steps ahead of the game. I had a nice long chat with one of their mobile analytics experts about what is different and compelling about monitoring mobile application usage as opposed to plain web applications.

It was an eye popping conversation, and you can catch their continuing observations at http://blogs.omniture.com/.

The simplest need in mobile applications is obtaining a list of device hitting your mobile web site and comparing that list with error logs. If, for an exotic example, you noticed a lot of errors generated on the same day Blackberry Bolds hit the market, and all the errors were on these devices, then you knew you had an application bug (at which time you fired up your DeviceAnywhere account to test your app on real, live Blackberry Bolds that DeviceAnywhere had available to you many weeks before the launch).

Trending metrics on carriers is also important. Mobile application analytics has the advantage of being able to ID the carrier connecting the handset to the server. Spotting page drops and other errors and tying that data to the carrier ID helps to isolate problems with carriers, who have been known to induce errors in the proxy servers with alarming frequency.

Simple metrics on the screen size and dimensions of mobile screens gives application providers data on when they need to either expand the physical presence of the application, and perhaps more important stop supporting older and lower resolution device.

But unique visitors are a biggie. Unlike desktop computers that may aggregate to a single IP address, each handset has a unique ID (and with GPS built in, the government can not track damn near anybody, anywhere). Mobile devices give much more accurate pictures of truly unique visitors, which helps target the user. Keep this in mind if a web site that you use from your desk top ever asks you for your cell phone number. They will correlate your desktop and mobile activities in an effort to channel highly targeted advertising to you. If your credit card is suddenly maxed out from spontaneous clicking of links, then you know how they got ya.

So why have I rambled on for 700 words? Because a marketing lesson is at hand. Chaos always provides a mid-term market (in the long term standards win out and reduce the profitable chaos). Look for markets where there are many suppliers offering many different “standards”. Creating solutions that manage the chaos these vendors create will put a nice wad of cash in your pocket.

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I have been very busy lately. Not only does business at Silicon Strategies Marketing rise in a recession (people sense their strategy is imperfect when they start losing money) but I have been giving a nearly endless series of presentations on marketing technology in troubled times.

Part of that presentation appears in an article by the smart folk at SoftwareCEO in two series on recession survival tactics. My contribution to their article “How to recession-proof your software firm, part 2: 18 tips on sales and marketing” relates some of what I say in my presentations — that aligning your marketing efforts to the Market Disciplines of your main customers cut through their newly raised recession filters.

The gist of it is that aligning everything you do with the Market Disciplines of your core customers is essential during economic chaos. During recessions, enterprises revert to the original and lasting disciplines that made them successful to begin with. It is an organization-wide mass psychological reaction that creates huge new filters to your sales.

Interested in learning more? I’d be happy to give the presentation to your marketing and sales teams. Contact us today.

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It is now great sport to anticipate what will happen to Sun Microsystems. As of Monday morning their market capitalization was less than their cash on hand, and when debt is factored in, Sun’s market cap was a little north of a 60% premium over cash. This means the stock market thinks Sun, its products, services and brand combined are worth about $800M.

Which for Silicon Valley is chump change.

Debates on what will happen to Sun (going private, selling off its limbs, auctioning off Schwartz’s ponytail) are less interesting than how they ended up in the relatively sorry state. I’ve opined on Sun’s disastrous buys (StorageTek and MySQL) as well as their misguided belief that being the champion of free software would automagically generate hardware sales. The causes of Sun’s eclipse are many.

Their marketing is certainly a suspect, as a recent email attests.

Somehow a Sun generated email (spam actually) entered my inbox. Their email should be used in college marketing classes as a bad example on how to communicate about products. The letter was heavy on buzz words, empty of value propositions, and as exciting as a mud sandwich on white bread.

Instead of dumping a billion dollars on MySQL, Sun should have invested $1.95 in a competent copywriter. Allow me to ruin your morning by sharing the email with you.

When you’re faced with having to deliver high availability, business-critical applications while under the financial constraints of tough economic times, this whitepaper is a “must read”

We live in a 15 second sound bite world where marketing professionals need to communicate a unique value proposition immediately. Instead Sun lobbed a meaningless and information-free paragraph with two sleep inducing buzz words (highlighted).

Like an Abu Ghraib interrogator, Sun’s marketing division relentlessly inflicts more pain on the reader.

Sun GlassFish Enterprise Server enables enterprises to deploy advanced high availability features in business-critical environments. The GlassFish application server cost effectively scales to meet the needs of the most demanding applications while delivering record-breaking performance and high availability without the complexity of proprietary application servers.

The second paragraph is more offensive than the first not only by virtue of avoiding usable information while distributing gratuitous volumes of over used buzz words, but also by the sin of repeating the same buzz words in the same breath. The reader is first bored to death then resuscitated through abuse and …

In this recent configuration guide, Sun engineers describe …

… confusion. First Sun promised a white paper, which by definition is a helpful education tool. Now Sun claims to deliver a configuration guide. The former product (and the text that pimps it) seemed targeted at the CxO level while the latter might appeal to a lower-level techie.

The reference configurations presented in this guide demonstrate how to deploy business services to meet various availability requirements, from the highly scalable service availability configuration to the business-critical, 99.999% service-and-data availability configuration. Learn more from this indispensable guide.

OK … I’ll stop. This is getting to painful to write.

What are the technology marketing lessons from Sun’s mistake?

• Address one audience at a time
• Tailor your messages to that audience
• Get the value proposition to the top of the communiqué
• Avoid overwrought words that fail to communicate information or value
• Don’t buy shares in Sun Micro

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The days of appliances for software distribution are numbered.

I have held suspicions about the long-term viability of appliances, which for the uninitiated are servers shipped to customers with software suites pre-installed. As servers became commodities and thus a minor part of the total cost of deploying a solution, many bright vendors realized that they could make customers happier (less deployment work) and reduce tech support expense (fewer customer deployment mistakes) by bundling everything on a box that could be racked, powered-up and added to the local network.  This also generated a great deal of customer good will through rapid success with the product, which in turn generated good buzz, more recognition, more sales, etc.

Appliances however predated mass acceptance of virtualization and clouds, which have removed much of the value add of appliances. Even small organization rack all new servers with virtualization installed. The reasons for doing so are numerous but the side effect is that technical buyers now provision virtual computers for all projects. They even install hypervisors to support single instances of an operating system in order to buffer hardware variations from machine to machine (one analyst recently quipped that you can buy 1,000 servers with identical SKUs from the same vendor and not get 100 identical servers).

Hell, I run VMWare on my laptop.

Will appliances disappear? Not entirely. Oddly enough appliances will go down-market, being offered to smaller and smaller buyers whose tech staffs have trouble tying their shoes much less installing Linux, MySQL and applications. In other words appliances will eventually become an option for the least sophisticated buyers.

With SaaS the growing rage, appliances may not be lucky enough to even go bottom fishing.

My first hint that appliance fortunes were going south was SugarCRM. For a long while they touted being able to buy Sugar as a service (SaaS), as on-site installable, or as an appliance. Oddly that last option has disappeared from their home page list of alternatives (click the pic to see the SugarCRM homepage of this morning). On-demand and on-site, but not on-hardware. The product (known as the Sugar Cube — how cute) still exists but appears to be in the first phase of phasing out. Perhaps I speculate too much, but pulling the appliance from the home page, removing it from the main product page and making it a footnote elsewhere is not a strong statement of support.

What should you do? That depends on your product’s market and segmentation. If your segments indicate buyers are likely users of virtualization or SaaS, then appliances will gather dust on your selves, tying up your cash. Conversely, if you have a product from which customers rapidly receive benefits and if SaaS alternatives are not readily available, there may be demand for appliances. If you are in a competitive market and your competitors do not offer appliances, you may find low hanging fruit and a modicum of differentiation.

Otherwise appliances may be a dying solution.

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The FCC has created the next big technology gold rush, literally out of thin air. Chip and mobile technology mavens are the first folks who will strike the new mother load, but others will follow.

In between existing television channels are buffers collectively called “white space”. The FCC established these buffers in the Bad Old Days™ because back then television broadcast equipment was less than precise. A broadcast signal could drift a little up or down the frequency spectrum causing recliner-bound fathers to order their children to adjust dials, knobs and rabbit ears (if you do not know what “rabbit ears” were, then you are too young to be reading this). Basically white space buffers kept channel 2 from clobbering channel 3.

But with television broadcasts going digital this February and the unused white space spectrum being valuable, the FCC has opened it up for “unlicensed” use. Unlicensed spectrum devices do not require getting FCC approval for every user. Your home wi-fi, your kids walkie-talkies, your BlueTooth toys are all unlicensed gear. Unlike all these gizmos, signals for devices in the white space 700MHz band can travel for miles and go through walls, which is why your old television worked indoors even if your kids couldn’t tune it properly.

The FFC’s idea is to open white space for unlicensed data devices. Being unlicensed, there is little restriction for what this space can be used. As long as the device follows FCC mandated rules for not interfering with other devices, anything goes. Think of it as wi-fi without the limitations of wi-fi. Think of a long distance wi-fi connection that runs between 10-20 megabits a second (slower than home/corporate wi-fi but significantly faster than 3G mobile data). Think of it as a huge arena where devices will freely communicate with other devices in an all but unregulated environment.

Think that this market is 100% untapped.

Like the Internet itself, profit in the white space derives from its unregulated nature. When the cost of entry is low and the variety of uses nearly endless, potential and profitability are mind boggling. Chip makers will be obvious early winners, and I expect Intel will quietly shift some of their WiMax investments to WhiteSpaceMax in 2009. Cisco no doubt has engineers soldering away on breadboards today. Since Google pushed hard for the FCC to allow white space exploitation, they likely have an advertising revenue backend already mapped.

These are the obvious profiteers. The yet identified winners fall into two categories: companies that understand new uses of data and companies who redefine “devices”. We have to look at these in inverse order.

What is a “device”? An automobile is a device. So is a toaster. I can think of about 100 useful ideas on how a car with free long distance wi-fi could benefit from data. So far I’m drawing a blank on how toasters would benefit from having fresh data feeds (maybe my brain needs some toasted carbohydrates to restart the idea factory). Creative minds who view “devices” as an abstract, and who can leverage the wealth of data available via the Internet, going to make some money.

Let’s take a really simple idea like GPSs and gasoline. If a GPS maker augmented their product to mine the data at GasBuddy.com, the device could at the press of a button find the cheapest gasoline nearby, guide the driver there, then prompt him to enter-in what they paid and thus update the GasBuddy database. When gas goes back to $4 a gallon, this will be a much sought after addition (note to Garmin, TomTom and everyone else in the GPS business — considered this copyrighted and I expect royalty checks when you implement this).

But GPS toys are existing devices. What previously unimagined gizmo could be mass manufactured and download/upload data? The answer may lie in what data is useful in motion when using a cell phone is not practical. Or better still, when a cell phone is present but passive. Imagine an eye-level billboard that sense that you are standing in front of it, and from some white space signal knows who you are (is told your cell phone number). Based on a database in the cloud, it could tailor an advertisement to you and the location where you are at (“Hungry? Try the Peking Cat restaurant two block east on Main Street. Much better than the Vietnamese food you ordered online last week from Wok my Dog.”)

Combinations of existing devices may suddenly become useful by their ability upstream data. Convinced your kid is abusing his driving privileges? Why not add a camera in the car, tied to the speedometer and GPS system that streams audio/video/location/velocity data back to your PC, and let’s you VoIP him in real time? “Billy, get your hands off your girlfriend and back on the wheel …. NOW!”

White space is a big and very empty world. But it is a largely unregulated world and one ready for profiteering.

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