In all product marketing, one pays attention to the ‘whole product’, which is the sum of all the expected outcomes from using a product (this is a combination of features, benefits, services, price points, etc.)  Whole products are different for each market, each segment and each buyer genotype. Taken as a whole, a whole technology product can be very complex, and the complexity grows as the number of targeted segments grows.

Technology isn’t for wimps.

Thus, there is often a trade-off between a whole product and the product suited for new users (who can be considered a subsegment).  Often part of a whole product is offered as another whole product, but to a market or segment that is less sophisticated than buyers in the larger group.  Another common trick is to grease the skids for implementing a whole product or provide a stripped down whole product in order to create an “ease of use/implementation” feature.

HP seems to be doing both.

Implementing cloud computing is non-trivial.  Even battle hardened geeks, armed with cases of diet Coke and enough manuals to depopulate a rain forest are intimidated.  Yet the economics of cloud computing are nearly inarguable, and thus our nerd friends geek-up and grind through implementations seemingly designed by Inquisition engineers.  In smaller companies with limited technologists resources, implementation might never happen without the aide of outside service.

This is where HP’s CloudStart appears.  In brief, it is designed to ease implementation and operation of clouds by simplifying the process.  It is a cluster of hardware, software, consulting services (heavy on that last bit) and their Cloud Service Automation tools that allegedly allow an enterprise to build a private cloud (with four ported work loads) within 30 days.  In the history of IT, a 30-day implementation of any infrastructure is unheard of, especially for something as fundamental as servers.

HP’s offering is not entirely unique.  Many companies – most notoriously IBM – have offered quick-start programs for major IT implementation.  In each the goal is the same:  to simplify the process for the buyer while locking them into a one-vendor path for implementation.  Let us ignore the latter mentioned lock-in (it is a given, like your congress critter lying to you) and instead focus on applying grease to the implementation skids.  Doing the latter in parallel with outbound marketing reinforces a single golden rule for marketers everywhere:  reduce friction.

Aside from buying water, most purchase decisions are reasonably complex.  Technology more so.  The time required to make a complex decision, and the likelihood the decision will ever be made, is inversely proportional to how simple you make it for the buyers.  Every instance where a buyer encounters confusion or doubt is a place where the sales cycle elongates and your VP of Sales’ blood pressure rises geometrically.  One of marketing’s missions is to reduce complexity in buying decisions and keep your sales exec from encountering stroke, heart failure or a drinking problem (that last one is a jest … all sales people have a drinking problem).

This is why Best Buy allows you to compare good products with crappy ones online: it quickly eliminates a point of purchase delay.

With any product, guiding the buyer to a decision is a primary marketing responsibility (one web design analysis firm refers to the lack of such marketing effort as “allowing unsupervised buyer thinking”).  The parallel with HP’s CloudStart initiative is to reduce the customer thinking required to make implementation (and thus purchase) decisions for cloud computing.  Guiding geeks to glory, if you will. SalesForce.com did this amazingly well with sales people and CRM, making their discovery, learning, trial and acquisition a snap, despite their perpetually intoxicated states.

The marketing lesson herein is to stop spewing text and data on web page after web page, and start leading buyers by the nose through the paths of discovery, education trial and adoption.  Rent a passel of prospects and watch them as they walk through your materials, and wherever they stop or have a question, fix the problem that caused it, even if it is in the product itself.  Focus on eliminating friction, diversion or rejection.  And if you sell a complex product, build a selling tools that guide buyers through the same process at lower levels.

And buy your IT geeks another case of diet Coke.  Seriously, they’re putting on weight being locked and chained in the server room like that.

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Market research is a common conundrum for every business.  In a perfect world where coffee is always fresh, all women are drop-dead gorgeous, and government obeys, a businesses would buy plenty of primary research to be completely certain about their marketing decisions.  Not only would such circumstances stuff obscene amounts of money into my own pocket, but the risk side of the businesses risk/reward equation would drop to zilch and assure huge rewards.

Sadly, complete research would cost a fortune and never be complete.  Even Oracle has to guess once in a while, rolling multi-million dollar dice on limited research and a hunch.  Former Joint Chief of Staff Colin Powell – who led the rescue of Kuwait – once said something like “I research until I have 60% of all critical information, then I go with my gut.”

Most start-ups operate on 1% … or less.

This is the toughest part of raising a business from diapers.  Before funding (and even afterwards) the amount of cash available for research is limited.  Yet investing in research greatly reduces the probability of failure.  CEO’s of struggling tech start-ups need to invest in many things, but often scrimp on understanding their market, segments and buyers to the fullest rational extent.  This lack of insight causes their business to burn through cash in trial-and-error market outreach, which rather defeats the purpose of the CEO’s original frugality.

CEO’s need to invest in market research in incremented fashion, and in an order that is counterintuitive.  The pieces of information required are most commonly in this order:

1. 1^st segment whole product: Most products start niche, and in order to survive they need to achieve dominance in one key segment.  Knowing what constitutes a whole product for a chosen segment will help assure shorter sales cycles and sustaining revenues.
2. 1^st segment genotypes and motivations: In almost the same breath as above, knowing who actually influences a purchase decision and what their motivations are is critical to promotions.  You can have a whole product and still sell it in a way that attracts nobody.
3. Branding and messaging: Spending a few quid to perfect corporate and product messaging and your brand sets the stage for blocking competitors in your first segment and making you more buzzable.
4. Market definition: Once established, understanding the broad market and all the segments therein allows growth planning, which leads to long-term product planning.
5. Competitive positioning: Competition research, combined with your market definition map, shows which segments should be assaulted and in which order to effectively maneuver past competitors and ultimately surround them.  This is the key to market dominance.
6. Repeat 1-3 for each new segment: Those who do a good job in their first segment will be condemned to repeat it for every segment thereafter.  The process never stops – competitors, shifting markets and market lifecycles keep changing and this makes your marketing research life a living hell (which is why Silicon Strategies Marketing is in business – so your life can be less hellish).

Bottom line for budding entrepreneurs is that you need to research, but do so in an order that allows minimum investment at each stage, and in an order that assures success.  If Collin Powell had waited for a complete set of information Kuwait would be part of Iraq and Sadam Hussein would still be smoking stogies in one of his palaces instead of fertilizing crops in Tikrit.  But Powell did enough research to win.

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Not a smart phone, but a commoditized flip phone that handled voice conversations, kept a contact list and something that resembles a calendar.  A cell phone so fancy that two decades ago we would have taken a human life to obtain one, but today is so feature free that we might give it to a child so some day he can tell his kids how hard he had it.

Markets change constantly, but often products change faster than the markets that support them.  Take the cellular carrier market … please.  Given that the domestic customer base is saturated, carriers are in a constant struggle to keep customers locked into their networks and find new streams of revenue.  Yet they must also help finance your newer and more sophisticated cell phones in order to bring you (back) into their fold.  This is why a $600 smart phone costs you only $200.  The carrier makes back the money they spent on your handset by getting a guaranteed two years of revenue from you via the contract you signed.  Expanded continuing revenue also partially explains why they charge a mandatory network data fee for the newer and fancier phones (that and they want you to grow addicted to having data on demand 24 x 7 x 365 x everywhere and thus in the future perceive it as a necessity and not a luxury).

Despite a slate of new monthly charges for owning a cell phone, the industry has not changed much in decades.  Carriers subsidize handsets, pads and slates, earning their money on the backend.  This creates competition between hardware makers to gain favor and deals with carriers who erect barriers to customers using unlocked phones.  This game is fixed and the carriers are not interested in changing it much.

Which is why Google is breaking the system.

Anytime all competitors are content with the status quo, a great marketing strategy is to break the status quo.  We disreputable marketing types call this changing the rules of the market.  In a mature market you can gain first mover advantage by changing the rules.  The problem is that the more complex the market, with incestuous economics, numerous players and relationships, changing the rules is non-trivial.  Despite making a lot of cheap unlocked phones possible, Google found that Android by itself could not break the carrier subsidy model.  The carriers want money, and are unwilling to relinquish any tool that have for making more.

So Google is breaking the system in smaller chunks.

The hot part of the mobile market is apps.  Apple has a 3-to-1 advantage over Android in the apps department, though many of Apple’s 200,000 extra apps are of questionable commercial value.  This temporary Apple advantage is an Achilles heel since, from a functional level, Apple doesn’t offer much over Android.  Breaking Apple’s status quo of being an app leader is as important as getting more Android phones into people’s hands (though at their rate of growth, Android phones may dominate the market before the 2012 presidential election is over).

Google is breaking the system by changing the revenue model.  You know, that thing that is so important to the carriers.

According to reports, Google may share app revenue with carriers.  Currently carriers get glitch from the roughly $75M Apple earned from apps (another $175M went to developers).  With smart phones making about 5% of the market, this small-but-growing-like-a-virus market means real money down the road in just raw app sales, not to mention in-flow revenue opportunities.  Currently, Apple’s app share would contribute less than 2% of AT&T’s wireless services revenue, but 2% now beats 0%, and once smart phones make up the other 95% of the cell phone market, that number rises to 35% of services revenue.  Multiply this again by the growing roster of apps and their usefulness (sans meowing cat apps) and app revenues may well rival service revenues for the top-line.  Now multiply this revenue engine with pads and slates, many new flavors of which arrive this holiday shopping season.

Non trivial treasure.  Google knows it.  Verizon knows it.  AT&T knows it.  Apple knows it.

Given this new revenue stream, carriers have motivation to promote Android handsets.  Since they will be able to buy such handies from everybody (Motorola, HTC, LG, Demented Dave’s Cellular Designs, etc.) they in turn will focus on promoting the Google/Android brand as opposed to any specific manufacturer’s product.  By breaking revenue model, Google is also breaking the partner loyalty model, another Apple advantage.  AT&T may still sell iPhones … to 5% of the market.  They will sell Androids to the other 95%.

Several marketing lessons are intertwined herein:

1. First, in any market where partners own the customer relationship, odds are they will not give it up (i.e., allow unlocked phones to cheaply enter the space).
2. When partners have a lock on the end customer, you have to help partners make money.
3. If your competitor owns the partner relationship, you have to find ways of helping the partner profit that also hurts your competitors (in this case, robbing Apple of their app and partner-promotional advantage).
4. If the market ain’t broke, break it.

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Sure, I might have been wrong, but that is unlikely.  The entrepreneur may be one of those storied Silicon Valley visionaries whose acute sense of the needs of certain buyers is so profound that he soon will buy a small third world country with his spare change, but that is just as unlikely.

The first need every company has is a market.  The first question is always “does a market exist?”  After all, without willing buyers no amount of product design, cost reduction, hard work or plain dumb luck will make a company successful.  This then brings to the fore the nature of identifying viable markets, a task Silicon Strategies Marketing routinely performs for our clients though we have to deliver bad news more often than we like.

There are two primordial paths to market conceptualization:

Intuitive: An organic process whereby an individual or small team acquires via passive absorption insights into buyer needs, market gaps or pervasive trends that create a “Eureka!” moment.

Quantitative: Process where measurements of market dynamics, buyer expected outcomes and competitive pressures show available product opportunities and positions.

The two are not mutually exclusive.  Visionaries should (though rarely do) commit to quantitative analysis to confirm a viable and profitable market exists for their vision.  Jobs and Wozniak likely did little market dynamics research before presenting their bosses at Hewlett-Packard a notion about personal computers.  They had a vision about desktops and found ways to make that happen.  Steve Jobs is still in that line of work – visualizing things that ought to be (except Adobe Flash).  Other founders have a vision, but gather market research to keep from burning through grandma’s retirement money on a wild scheme.

Quantitative market identification lacks the visionary aspect.  It is a top-down, numbers focused examination of what is occurring in market places to identify what is missing.  I recently conducted research for a company specifically to identify what they and all their competitors had missed – where the market wanted something that had not yet been conceived (and it looks like we found it).  Quantitative market identification is science while intuitive market identification lies between the brain and the soul.

For start-ups seeking funding, one is an easier pitch than the other.  Put yourself in a VC’s richly appointed leather chair and imagine a young Jobs-like visionary pitching a previously inconceivable notion about a computer in every home in an era when a lot of home didn’t have a television (back before satellite dishes became the official West Virginia state flower).  Tough sale?  Yes, unless you had market surveys that showed the number of potential customers, their price sensitivity, and a marketing ROI plan, in which case a VC might break a finger trying to write a check fast enough.  Conversely, if you identified your market via quantitative means then you might not need or want to dilute your shares just for VC cash infusion.

Let’s take two examples.  Apple was a visionary approach.  Jobs and Woz saw a market though there was likely very little in the way of structured market research that did (or could) substantiate the future of desktop computing.  It took working at HP and Atari and hanging out at a computer club for them to triangulate a future nobody else could.

Though I have no inside information, I suspect SeaMicro – who came out of stealth mode this week – had a quantitative epiphany.  They basically reinvented servers by challenging all the assumptions about those boxes.  Examining how servers are used and how they are inherently inefficient, the SeaMicro founders likely justified revising corporate backbones by looking at market realities, quantifying demand and ROI, then designing a machine based on merging trends in technology (low cost, low wattage CPUs) with trends in demand (virtualized server farms) and customer-side cost/benefit analysis.

The best path may be the validated visionary approach, and hence the one most often practiced.  Vision is an odd creature – not everyone has it.  Yet people who are subjected to a specific market day in and out, who see data or hear what buyers have to say have their vision because they have non-quantified analysis.  Visionary risk is reduced by quantification.  Quantification can also eliminate the need for visionaries.

The marketing lesson is pretty simple:  Vision is great but has huge risk.  But don’t let risk detour you.  Be smart enough to reduce the probability of failure early on in your start-up by quantifying what you are making, for who you make it, why it matters and what it is worth to the buyer.

Now that’s visionary!

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The effect of marketing on innovation must be understood.  Unguided innovation has created many interesting, amusing and completly unprofitable technology products that caused tons of venture capital to evaporate (often through excessive and misguided marketing budgets).  Similarly, marketing occasionally identifies untapped markets, and is the seed for new and successful products (unless the market research was flawed, in which case see the preceding outcome).  Thus, marketing is both a creator and regulator of innovation.

This subject is often not understood my entrepreneurs and even CEOs of major corporations.  Inbound marketing – the more interesting half of the profession – is all about understanding markets, buyers and competitors and serves as both a regulatory governor and catalyst. Let’s break-down the two halves of the schizophrenic condition know as marketing strategy.

Our first case is where innovation has occurred organically, often in the alleged mind of the entrepreneur.  In their own ad hoc way, entrepreneurs perform market research:  they observed some part of some market, witnessed a gap between what people want to achieve and how products failed to help buyers do so, and attempted to create products that bridge the gap.  Often such products fail because:

Market size: The market is very small or the people who want the product have no budget or buy authority.

Whole product: The entrepreneur does not completely understand the needs (expected outcomes) of his market, or tries to bridge so many segments early on that he never creates a whole product for any one buyer.

This is where marketing’s regulatory function comes in.  Marketing must validate that markets exist and describe to engineers what the market requires.  The innovation may have occurred organically, but marketing ties the germ idea to a trellis (segment alignment) and waters the roots (whole product definition).  Market research thus helps expand/refine product definitions and confine the product concept to viable segments.  It regulates and nurtures innovation to conform with reality.

The flip side is where inbound marketing discovers the market need.  While performing market research (typically qualitative) certain trends may emerge.  Silicon Strategies Marketing recently performed a “deep interview” series with key buyers in one market in order to measure branding issues, and in the process kept observing a negative similarity among all the respondents.  Observing this similarity of responses led to the identification and development of a new product.  Thus, marketing was like a structured entrepreneur and identified a need/gap in a market.

A recurring management problem is that CEOs often do not understand this half of marketing’s job.  This is especially true with innovators and out-of-the-box leaders with myopic (or megalomaniacal) vision.  Market research decreases the probability of failure by reining in the unfounded expectations of the innovation, or expanding the vision to meet market requirements.  Visionaries don’t understand the value of marketing’s innovation contribution because in their eyes the original concept is perfect.  In reality it isn’t.

Nine out of ten funded start-ups never succeed.  The percentage for unfunded start-up failures is higher.  Yet check the boards of any tiny tech company and you will not see a marketing strategist listed.  My conversations with VCs indicate that lack of marketing perspective is the bane of the losing part of their portfolios.  In all cases there was innovation but no marketing to guide it.

Poor Peter is moaning in his crypt.

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No, this is not another diatribe on compact market messages, though that lesson is well worth repeating.  Where sweet and short nicely collide is in the sales cycle.  The shorter the cycle, the sooner the revenue, the happier the stockholder and the fatter your bonus check.

Marketers know that social media is becoming an intrinsic, if not superior, tool for finding and landing customers.  What has not been well quantified is the degree to which social media helps.  The folks over at the Software and Information Industry Association, where I am a perpetual CODiE judge, recently presented some data that indicates how and which social media may be helpful in shortening the sales cycle (click the graphic for one large enough to read).

The blue bars represent sales closing in less than 90 days, and the gray bars sales lasting more than 90 days.  Where you see a significant height difference are those tools that accelerate sales (huge caution – the survey size was small, so use several grains of sodium chloride when ingesting this snack).  We see that marketing mavens believe that videos, Facebook and Twitter are significantly better at getting people to part with cash faster than any other mode.

The problem is that each serves a different purpose.  Thus you may need to use all three to get great sales close speed.

Video: Videos are best at communicating conceptual information.  From product value gestalts to detailed product functionality reviews, videos provide a consistent, reusable, self-guiding system for helping people discover what they need to know about your products.  The problem is that you never will be James Cameron, and if you direct anything bigger than an elementary school play, your lack of chops will show.  Frankly, most product videos stink because they try too little or too much, and at the wrong point in the education cycle.  It is better to make a series of small videos that guide the viewer from concept to functional details, and let the videos self-qualify the viewer in the process.

Facebook: The first authentic borg may be Facebook.  When old ladies actively use a web site for sharing videos of their grandchildren, swapping recipes, and joining the George Clooney fan club, then it is all encompassing.  For marketers, community hubs are for building communities.  Like her or loath her, Sara Palin’s 1,460,713 Facebook followers (as of this afternoon) connect directly to the product that is Palin.  Facebook is not a sales tool, but by assembling a community, increasing the credibility and approachability of a brand, you ease resistance to a sale and speed the sales cycle.

Twitter: Twitter is triage.  Though there are limited options for promotion on Twitter (Dell being good at it) it is more for management of a brand.  The internet has a habit of growing cojones on people, even women.  They speak their minds and Twitter provides people an instant outlet.  Twitter is best used to identify and coddle malcontents, and to reward loyalists.  It is also good for finding people asking key questions about your products and addressing those questions as instantly as possible, and for their friends and followers to see your very personal attentiveness and answers.

For marketing executives, these facts create both opportunities and hemorrhoids.  Anything that shortens sales cycles is a valuable tool.  However, unlike advertising, each requires a human touch, and with the exception of videos, requires hourly participation.  More work, more manpower, more costs.  If you are creating a new market and you need to dominate it so thoroughly that competitors never prosper (the SalesForce.com and Success Factors approach), social media is a must.  By compressing the sales cycle (or the ‘buy cycle’ when looked at creatively) you block competitors by saturating the market as quickly as possible.

That’s inequitable, and in business that is a Good Thing.

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Meanwhile, social media continues to gain dominance in marketing, and for good reason.  Humans, and even politicians, are social animals.  We commune for pleasure, profit and procreation (which pretty much describes a day in the life of Eliot Sprtizer).  Even the most sterile of pursuits requires some social aspect.  Every poor blogger, alone in his office, hammers out prose in order to asynchronously connect with other humans.

Business-to-business (B2B) activities are thus social interactions.  Oracle commits social acts when it interacts with other enterprises, aside from the select few it eats.  Thus social media should be a component of B2B. The oddest aspect of B2B social media concerns who in the relationship needs to socialize and why.  The failure to think through these two questions have led to various B2B social media catastrophes including most of the old executive blogs at Sun Micro.

Relationships, regardless of how tenuous, are the heart of social media.  Your B2B worries center on buyers, suppliers and thought leaders.  These are the primary external groups who are influenced by you and your competitors and thus the ones to which social media is important.

Just ask Oracle’s 28,918 Facebook fans.

When stripped bare, social media for business is mainly about branding.  You need people to perceive your company and products in a particular way.  Social media offers the ability to communicate brand both directly and personally.  The personal aspect is what creates an emotional connection with a human (politicians, having no souls, have no emotions).  B2B social networking is mainly about the communication, amplification or defense of your brand.

Brand communication: At the risk of repeating myself … again … if you do not define and consciously communicate your brand, the market will, and the market is unkind.  Social media’s personal touch gives tremendous opportunity for communicating brands.  Sadly most companies treat the opportunity as advertising, which some people perceive as an antisocial assault (ever notice the advertising you remember most are those that entertain and make you feel).  Any employee (including the CEO) who communicates in social media needs to do so only after reciting your internal brand statement ten times.  Once the brand is reloaded into memory, any social media communication will reflect that brand.

Brand amplification: Often members of an audience will correctly state your brand.  Such acts deserve acknowledgement, appreciation and rephrasing what the other person said with your specific branding words.  Doing so clarifies and amplifies your brand in public places.

Brand defense: Other folks are not as kind, and may have many nasty things to say about your products, your company and maybe even your mama.  Left unchecked, these can escalate into a negative brand image.  Some companies are proactive, and upon seeing a negative comment help the person to resolve their problem or explain why it has to be.  Other companies (most notably the self-destructing Intuit) either ignore community outrage, or worse yet try to censor negative branding.  Social media has to be treated as an opportunity to connect.  As you would with friends or family, treat the other person well.

The hard part about B2B social networking is finding or establishing relevant places to participate.  Proactive companies create social media spaces, be it a Facebook fan page, a public forum based around their market or segment, or even private executive panels.  Many marketing dilatants hijacked these sites for promotional purposes, and rapidly killed the value originally promised.  In more mature markets where social media arose from the masses (such as within trade or technical interest groups), enterprises have joined as members.

The take-away is that your suppliers and your buyers are people and need to be treated as such.  Online social media is merely a rapid extension of normal social interaction.  Since social media is global, asynchronous and everlasting, even B2B businesses need to incorporate it into their overall marketing plan.  Just understand that social does not mean sales, but it does mean social.

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Positioning is simply establishing where on a competitive map your products are in the eyes of the market.  The concept is quite simple if you ignore for a moment the complicating factors of market maturity, multiple segments many buyer genotypes, or 3,274 other elements.  To determine one’s position you simply have to identify the issues that are of primary concern to your buyers, and either measure their attitudes about competing products and perform a realistic evaluation of all the entrants.

Sounds simple, but it isn’t, and often leads to awkward issues.  Here’s an unfunny example.

Silicon Strategies Marketing recently performed a series of investigations for a client to determine what the market felt was important about a services offering and where the various competitors stood in the eyes of the market (since the quality of services are subjective, surveying the market was essential).  In our surveying we discovered that three issues were of primary importance to buyers, and that our client was a market leader (happiness) but in a tight cluster with two top competitors (unhappiness).  What this particular analysis showed was that in the eyes of the market, there was little differentiation between the top contenders.  This is a dangerous positioning because in the absence of differentiation, price becomes a negotiation tool for the buyer.  In these situations you must either explain with utter clarity what actually makes you different and better than your competition, or invent a new and meaningful differentiation, or both.

Standing still is not an option.

Refining market messages is a perpetual activity, but urgent when you discover that your position lumps you together with competitors.  Reviewing all messaging in light of the principle buyer motivations will gain good short-term benefits as well as getting everybody inside your company to focus on what is truly essential in their daily work and outreach.  However, agile competitors may well realize they are in the same cluster and face the same positioning issues, and clone your messaging.  Thus, over the long run, you must invent new capabilities that are meaningful to buyers.

This leads to the second aspect of positioning, namely how to work around your competitors.  Going toe-to-toe with competitors is slow motion suicide.  It is expensive, produces few sales, and depletes your staff’s enthusiasm.  However, finding a path around your competitors not only generates revenue, but also starts what the Chasm Group defines as the “bowling alley” process.

This is where positioning gets complicated and fun (well, fun is you are a slightly masochist marketing guru … like me).

Segmentation, the process of dividing your entire market into small, manageable pieces is based on finding groups with common expected outcomes (“needs”, though that term is somewhat misleading).  Instead of attacking the entire market, an effort that will fail, you attack one segment until you dominate it, then move on to the next.  If you evaluate each possible segment with clarity, obvious paths to market-wide dominance will appear as you identify segments where your product is or can be made strong, where there is revenue, and where there is extensible similarity of need from your current segment.

Which gets back to positioning.  Your position in segment ‘A’ is not the same in segment ‘B’, ‘C’ or ‘Zed’.  It is one thing to map your position against a whole market, and another to map it within each segment.  Both are valuable, but only the latter leads to a segment-by-segment growth strategy.  If you are not planning a segment-by-segment growth strategy, you can only grow as big as your current segment.  That is good enough for some businesses, especially those that are led by calcified founders.  It is not good enough for Silicon Valley and investors.  None of that crowd likes leaving money in other people’s pockets, but unlike politicians and other professional pickpockets, The Valley prefers to earn their income.

The marketing lesson herein is to map your entire market, segment it, identify and position-map what segment you are in and which ones you should be in next, then march through them like Marines through Tripoli.

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I attended Oracle’s outbound communication extravaganza concerning the completed swallowing of Sun.  In the time from initial purchase to the final approvable by European Union regulators, Oracle has been busy deciding what parts of Sun to keep (pretty much everything), how to integrate to company (interestingly) and where to create real market value (specific).  In an event short on surprises – unless Larry did something quirky, which I missed by having to leave early – OraSun changes the game, which is the entire point of marketing.

Aside from seeing “Sun” positioned over “Oracle” on all the event branding (the last time this will undoubtedly occur), the basic market strategy of the merger can be summarized as “We are your IT hub, we are specializing the center of your operations, and don’t look at that man behind the curtain labeled ‘cloud computing’.”

The first and recurring OraSun gestalt was that Ellison owns a stack, from iron to apps.  They are not kidding either.  Ignoring technology religion, Oracle now provides a solution for servers, storage, virtualization, middleware, databases, applications and the management of the two major strata (systems/apps).  They may have nothing in the networking realm, but they will next year when Oracle buys Cisco (that was a joke, but I heard you gasp).

This is an interesting turn of events.  As one OraSun exec noted, the IBM of the 1960’s offered head-to-toe solutions, insinuating that Oracle was the IBM of the new millennia.  Given how close to financial death IBM came to in the 1980s, we should add an Outlook entry for 2030 and retake Oracle’s financial pulse.

History is its own recycling bin.

OraSun’s marketing strategy is to be one-throat-to-choke for the hub of datacenters.  They rightly recognize that mission critical work is both ill-suited to cloud computing and that by tightly cross-tuning the OraSun stack, they will create a market domineering solution set.  Much of OraSun’s presentation spun tales of how the database, Solaris, SPARC and flash-enhanced storage are being co-designed.  The end goal is to assure that the OraSun stack is inarguably the most technologically effective data hub.  HP can’t compete as their Itanium solution is rapidly evaporating and their database offering almost isn’t.  IBM has a shot, but with fat margins in services, declining acceptance of DB2 and a post-Gerstner reluctance to centralize authority, they likely will not challenge the throne.

OraSun positioned themselves very well.

Oracle’s (wo)men in black – black suits and white shirts were the corporate executive uniform – repeated the manta of removing the systems integration task from the datacenter.  Oracle’s messaging was pointed like a revolver at CIOs and CTOs, claiming that systems integration is a major headache for these folks and that no other vendor offers all integrated points.  Granted, Oracle artfully ignored some plumbing products necessary to even a data hub (routers and network management), but their point was compelling assuming that the top of the stack – applications – met customer needs.

One OraSun spokesperson was somewhat defensive on the subject of cloud computing.  Obviously Oracle understands the issue and also understands that they do not have a clear market advantage at present.  He struggled with the concept of saying “grid” computing is “cloud” computing before tossing up a hit-piece slide on VMWare, which does own the cloud space.  For now it will be an uncomfortable stare-down:  OraSun is willing to own and dominate the hub of the data center on specialized Sun hardware, and let VMWare handle less-critical cloud computing with generic hardware.

For now.

Since OraSun gives away virtual machine solutions, they have the ability to buy cloud management tools that lost to VMWare and integrate those into OraSun systems management utilities.  After Sun is completely integrated into Oracle and together they dominate the datacenter hubs, expect Larry’s Legions to make a cloud play.  The market exists, is important, complements OraSun’s virtual desktop products, and is acquirable.  OraSun is merely talking-it-down for the moment.

Heads-up VMWare:  Larry will gun for you next.

The prelude is a hiring binge.  OraSun is vacuuming the salesperson market and adding 2,000 head to their global sales squad.  Ellison understands his “unified stack” position in the market is unique but not impenetrable.  Alliances will be formed and cloud computing offers some alternatives to raw central-server and grid approaches.  OraSun’s mission is to move as many customers to their combined solution as quickly as they can, because the switching cost of disengaging from a stack as complete as OraSun’s will be huge.  Lock-em’ in rapidly while working out the cloud initiative, then dominate the remainder of the datacenter market.

OraSun’s wildcard was not as wild as expected.  No real news was released about MySQL aside from OraSun integrating controls for their infrastructure management tools into the almost universally popular and largely free DBMS.  This is less of a commitment than a loss leader.  MySQL has invaded the enterprise in much the same way as Linux did.  It is not ready to be in the mission-critical hub, but it needs to be managed more effectively than most current tools permit.  By adding MySQL to the OraSun infrastructure management suite, Oracle is blocking alternatives and thus avenues of escape for customers.

From a marketing standpoint, Oracle shows once again that old lessons should not be ignored.  They have taken the enduring one-throat-to-choke market demand and amplified it.  CIOs – aside from the rightfully paranoid ones – will be hard-pressed to argue against adopting Oracle.  Marketing is first and foremost about identifying and satisfying needs, and OraSun is aggressively doing just that.

Let’s see if the scheme works.  Oracle likes buying successful companies, but Sun was nearing fiscal death when Larry swept in.  Larry’s also trying to buy one of the worst basketball teams on the planet, so maybe he has simply run out of good investments.

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Such seems to be the case with Sequoia Voting Systems, a manufacturer of electronic voting machines (known among libertarians as ‘election hijacking devices’). Sequoia recently announced that they were opening the source code for their Frontier balloting systems.

A wise move, aside from the fact that it exposes Frontier as being Microsoft based. I know nobody who would trust their vote to be counted by the same people who brought you Clippy (It looks like you are trying to vote. Would you like me to cast your ballot for you?).

For reader who have resided in Tora Bora for the past decade, electronic voting machines were thrust upon the American public in a fit of panic. In the 2000 elections, a few senile seniors in Florida could not navigate paper ballots. Since the appointment of the next president was to be based on fewer votes than all the elderly dementia patients in Boca Raton, some people demanded radical changes in election processes. Congress did what they do best, and threw nearly endless stacks of cash at the problem without first taking time to understand the problem itself.

Electronic voting machines are intended to replace manual punch card machines. Many manufactures rushed products to market since the several states had tons of federal cash to toss around. The list of vendors included Sequoia, which received some unfortunate product reviews. Since votes are sacred, miscounting votes is demonic. Thus, e-voting vendors need to prove their systems are incapable of error, can not be hacked, and that your vote will be faithfully recorded and tallied.

Programmers everywhere laugh aloud.

This created a marketing problem for e-vote vendors. People buy when there is an imbalance between desire and resistance – pull verses friction. People desire iPhones, but Steve Jobs would not sell many if they cost $5,000 and exploded every time you put it to your ear. So Steve created favorable imbalance by pricing the iPhones in the $200 range (if you ignore the monthly $30 wireless data tax) and reduced iPhone explosions to mere meltdowns.

E-voting is allegedly desired, but is held in high suspicion by voters with functioning neurons. System failures and very public displays of vulnerability to hackers create a lot of friction as well as a few pitchfork-and-torch mobs heading for their county elections office. These woes tend to hamstring all e-voting vendors equally, though a few are held in more suspicion than others.

Would you trust your vote to the same people who make ATM machines?

A good marketing strategist knows that the best way to win a market is to change the rules. Attacking a competitor’s strength is a classic maneuver where the rule (“they are successful because they are good at yada yada”) itself is challenged.

The status quo in the e-voting biz was created by friction, namely the belief that e-voting machines are corruptible. So Sequoia changed the rules by opening their system source code (with limitations and in small batches) in an attempt to skate past the market friction. This puts their competitors on the defensive and forces them to follow suit or be held with more suspicion than Sequoia … a race up from the bottom. Issues remain, such as the full, final and complete release of the code, review by independent programmers who would love to find defects, and admission that using Microsoft was Sequoia’s first mistake.

Once Steve Ballmer comes to my office and fixes XP, then I might trust my vote to their operating system.

There are two marketing lessons in Sequoia’s saga. First, friction is deadly. Great marketing strategists research the barriers to adoption, removing all of them that they can. This makes products easy to buy, and those are products that fly off the shelf. Second, Sequoia sought to change the rules of the game. They saw that the rules (hiding their source code so they could claim security by obscurity) was causing every vendor to lose. So they flipped the switch, changing darkness into light and forcing their competitors to scurry like cockroaches.

Good for Sequoia, though I still won’t vote using their gear.

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