Marketing Memos

When Silicon Strategies Marketing was busy making SuSE famous, we formed a number of interesting alliances. At the peak of our marketing frenzy we charged IBM, AMD, VMWare and others cash to participate in the SuSE event booth – to co-brand an co-present as shown in this picture from LinuxWorld 2003 (partner co-branding flying over our booth and us holding an audience after the show closed and while exhibit hall crews rolled-up the carpets).

Part of the strategy we put in play for SuSE was to communicate one step ahead of Red Hat. While the fedora-toped gang was still droning on about Linux being cheaper, we recruited major infrastructure vendors (hard and soft) to help us talk about integration and strategy planning. Since the market had decided to go with Linux, these talking points were what customers were thinking about – instant alignment.

We went out of our way to recruit Oracle. They were and are the big boss of the database business. After booting up a box, installing a DBMS is the next task on the average sys admin’s checklist. Having Oracle and IBM’s DB2 in the booth demonstrated that SuSE already had partners that buyers needed to build their future data center.

Which makes Red Hat’s recent sniping at Oracle amusing.

While SuSE, Oracle and IBM were aiming at enterprises, nobody was selling to the bottom of the market. MySQL, following the Open Source parade, slowly swallowed all DBMS action in the lower tiers. Yes, Oracle and IBM eventually released stripped down, limited access, largely unsupported versions of the mainline products. But by the time they reacted, the non-enterprise world had anointed MySQL the de facto SMB database. It came bundled on every release of SuSE, Red Hat, and whoever those other distros were.

The only people more annoyed by MySQL’s success than Oracle and IBM were the maintainers of Postgress (who figure into the story in a moment).

As the years rolled by and as Oracle acquired software companies faster than Bill Clinton acquires STDs, Oracle ran afoul of Red Hat in two ways: First, Larry Ellison brazenly (his only mode) went into competition with Red Hat, offering support services for Red Hat users with the added advantage of providing customers one throat to choke for technical support. Then he bought Sun, and by proxy bought MySQL. With MySQL an intrinsic part of the default LAMP (Linux, Apache, MySQL, PHP) stack, this put too many variables in Oracle’s control.

Which is why Red Hat followed IBM and is investing in an Oracle killer.

EnterpriseDB is an extended Postgress DBMS. Aside from offering a number of enterprise-ready features not found in MySQL, it does one thing that might just keep Ellison up at night – it mimics Oracle databases. It provides the same programming interface as Oracle, and thus allows Oracle-ready applications (SAP, et al) to run without the much more pricy Oracle DBMS. In other words, EnterpriseDB wants Larry’s money.

Which is why Red Hat is giving money to EnterpriseDB.

Oracle tried to take Red Hat’s support revenues, and now Red Hat is trying to take Oracle’s license and support revenues (oh, and IBM is helping EnterpriseDB in the same way).

In technology markets, nobody can go it alone. All vendors need partners. But tech alliances are about as stable as my ex-wife, and with less fidelity. They exist on the maxim that as long as each partner is helping the other make money, then the relationship lasts. When one partner causes the other to lose, then the partnership is weakened or broken.

Or partners are swapped.

Marketing strategists decide with whom to partner. They choose the alliances based on creating a whole product that they can bring to market. When we led SuSE’s strategy, recruiting Oracle was essential in bringing a whole product to enterprise IT buyers. Red Hat eventually did the same, and will remain on Oracle’s official partner list, because they still co-create the current whole product. But Red Hat sees that in the long run Oracle does not want to be a partner, but a competitor. Oracle wants to own the stack. Since the DBMS is Oracle’s revenue bedrock, Red Hat is reciprocating by attacking that revenue source through a new partner.

Expect Larry to retaliate … or buy Red Hat.

Bookmark to:

I skated through OSCON last week, stumbling over a great deal of bad marketing, lousy messaging, and a squadron of 20-something kids who could not keep their elevator pitch under 30,000 words.

T’is the nature of start-ups and other enfeebled entities.

However, a few outfits either had such interesting products or refined messaging that I would put them into the “watch these guys” category.

Top on the list was click2try. The first marketing lesson today is the company name. Though not 100% intuitive given what their product does, their name nearly creates instant cognition. A well thought-out company or product name can be the difference between cold and hot leads.

What click2try does is host a cloud where end users can create a private instance of software they wish to test drive. Users get a certain number of hours of free test time and the joyous experience of having the software installed, configured, ready and of having the whole stack saved in between sessions for instant reload with all configuration tweaks and data retained. End uses can buy extra time if their demos run long.

What impresses me about click2try’s business plan is that they have three separate revenue streams. End user play time is one stream. The other is commercial software vendors who don’t want to set-up their own demo clouds. They invest less, get started faster and get better results by outsourcing. click2try also offers a white box version of their cloud to vendors that want to bring demo cloud headaches in-house.

Literally, click2try earns money coming and going, from both vendors and buyers. Slick.

Slicker still was their presentation. Tom Callaghan was the click2try’s pitchman at OSCON. Tom and click2try know how to present, and by present I mean get people from a state of ignorance to a state of appreciation in a logical order. Their booth art gave you and idea of what they did (first step, grab the buyer’s attention). Tom delivered a well thought out elevator pitch that I’m guessing was under 18 words (second step, creating understanding and interest). The elevator pitch allowed anyone to understand the click2try gestalt and then ask questions peculiar to their own needs (which, when answered as well as Tom did, creates appreciation – third step).

The marketing lesson herein is that you must guide prospect from ignorance to appreciation quickly, and this is oddly done with well crafted baby steps – good display and copy, precise elevator pitch, ready answers to all common questions. If you cannot achieve this, you will fail.

Another cloudy contraption at OSCON was Twilio. They provide telephony services in a cloud with a tasty twist. Their cloud telephony platform is programmable, either as a service from Twilio engineers or by the customer. When customers call you, they dial a number in the Twilio cloud. The cloud pings your server where your code (PERL, PHP, Ruby, nobody cares) makes decisions, queries databases, or wakes the boss – whatever you are talented enough to code. Your server then sends instructions back to the Twilio cloud for telephony action. In short, low risk, low cost, completely programmable/integratable outsourced telephony.

The marketing angles are multi-fold. The weakest angle is that it is a cloud service, and thus very scalable. Most companies don’t grow so fast that their PBX boxes run out of horsepower, so floating on a cloud has limited market appeal. The actionable bit is that Twilio works with whatever technology you are already using. Running LAMP? You’re good. A Microsoft shop? Twilio can handle that … providing your Windows servers are not blue screened. Running a half breed HTTP stack on your G-Phone? It will fly.

Twilio’s floor pitch, though not as perfect as click2try’s, was good. Better still is their web site where they rapidly take visitors from curiosity to cognition … providing you make one unguided click. In their “how twilio works” page is a simple, effective Flash animation that describes the value proposition better than what is on their home page. I’m sure the simple fix will become apparent to them shortly.

Last on my list is Appko, which is a ham-handed abbreviation of “Application Company.” Contrast this name with click2try. Which company name more quickly communicates what they do and what they deliver? Appko may be a clumsy name, but it is one step ahead of Twilio.

I’m kinda found of Appko because they are executing on an idea I had years ago but lacked the gumption to launch. They preload a server with Open Source versions of the primary applications you need to run a business and a navigation wrapper around all of them. Order the box, plug-in two internet cables (external net, internal net) and get busy. They bundle and support major Open Source server-side applications. You can build/host a web site, facilitate employee collaboration, perform some HR functions, and more. When I coughed up the idea years back, I considered calling it “Business in a Box.” Not a great name, but it got the point across.

Appko confuses their customers a bit by calling their product “Appko CRM”, then explaining that the product does email, collaboration, document management, e-commerce, HRM, ERP, and other business functions far beyond CRM. One of the rules of marketing is to eliminate confusion. The best early sales pitches are the plainest. click2try did this well, Twilio did pretty good, but Appko’s pitch creates confusion from the opening line. Happily, this is easy to fix.

Appko’s target market is the SMB, heavy emphasis on S. Commonly these corporations lack anything resembling an expert IT staff. Typically Ma and Pa recruit their self-taught, geekish offspring to engineer their IT infrastructure. Finding, evaluating, installing, configuring, testing and then implementing a package of applications is so far beyond their capabilities that most never try. Many are turning to SaaS vendors for point solutions or NetSuite for a more integrated package.

Appko may have a long-term advantage in the market if they can broker or build integrations between these popular Open Source apps. The customer would receive a private, behind-the-firewall suit of tools with knowledge that the data is portable since the code is public. Appko benefits by investing next to nothing in software development, though they better be careful about support pricing (SMB’s are notorious tech support time wasters, bless their pointed heads).

I hate bottom fishing markets, but they are large and largely untapped. Appko is tapping them. They need to create buzz, mainly because all other forms of SMB promotion are cost prohibitive. They need to segment the SMB market and pick a juicy slice, adding tools that add delight to buyers in the segment. And they gotta get their pitch tighter, a process they can kick-start by talking to the folks at click2buy.

……….

Three companies with three unique products that have promise. One had a well thought, well honed presentation and a great name. Another had an odd name but respectable presentation. The last had an awkward/explainable name, but no smooth pitch. All other things being equal, on who would you bet your venture dollars?

Bookmark to:

This year’s JavaOne is a conference stood on its head.

A number of elements indicate that Java is thriving, but in odd tangents and with uncertain bearing. I’m sure it was only coincidental that all Sun employees on site were wearing black shirts and near-death experience expressions. Sun staffers looked like people who woke up in a casket at their own funeral.

Or in Hell if they believe the rumors about Larry Ellison and his cloven hooves.

Exhibit floors are where you find the real pulse of an industry. Forget keynote fairytales which are often more about FUD than fact. When companies drop thousands of dollars on booth space and staff time – when spending shows their intent – that is where you learn how to place your bets in any industry.

After touring JavaOne, I’m buying more stock in Apple.

No, Apple was not demoing nor did the spirit of Steve Jobs introduce a new product. But many mobile handset manufactures and a couple of carriers were in the front of the exhibit hall trying to convince Java programmers that there is gold in them thar wireless hills. This says more about the mobile industry than the Java industry. Apple has proven that apps sell phones, and since Java is a dominate language on other handsets, device makers and carriers came to court coders and grow the set of popular apps.

There was even one vendor with a tool that turned Java into native code for iPhones (which don’t include a Java machine).

Also of note were seemingly out of place actors like eBay and Amazon. They were trolling for talent. Java is popular enough that a shortage of sufficiently skilled Java hackers remains. Top shelf companies like these rent booth space to collect resumes. If I were a young geek, I’d consider being a Java junkie. Not only is it a sane language but the pay scale seems better.

Being a former IT fellow and system programmer, what caught my attention this year is the emphasis of memory caching colliding with cloud computing. Make no mistake; clouds are the next phases of IT infrastructure. The 12% rise in my VMWare stock in the last two weeks is testament to that. More and more companies are moving to support private and public clouds, and a few more visionary vendors are rigging systems to support both.

Google showed that sharing cache memory across boxes is central to scalable systems. If you are uncertain where on the planet your servers may be, exploiting caching systems become critical. This explains both the why Terracotta was talking it up and why VMWare was parked in their booth. Clouds are great, from the virtual machine standpoint. Clouds could be clumsy from an application standpoint. Slipping cache code between a Java application and the Java virtual machine (not to be confused with the virtual server on which the virtual machine hosts the virtual app … virtually) is a slick way to make life in the clouds livable. More importantly it is an element that will make ad hoc application expansion from private into public clouds doable.

Oddly the most interesting technology on the JavaOne floor had nothing to do with programming in Java. Some excitable pups were promoting the Pulse “smartpen”. Despite my entire career being connected to technology, I’m not a gizmo freak. My cell phone is six years old. I don’t own a digital television (I might if broadcasters devise programming for intelligent adults, by which I mean killing off all ‘reality’ programs and their contestants). I haven’t even bothered to spring for a GPS to decorate my dashboard.

But I may have to get one of these pens.

These Buck Rodgers quills do two things once you put them into record mode. They digitize all your pen strokes across a piece of paper so that when you plug the pen into your computer, the pages are uploaded and allegedly ready for optical character recognition (I defy any software to read my handwriting, which alone qualifies me for medical school and a life of writing prescriptions). It also starts a voice recorder and the sound files are uploaded as well. In one tool you have everything necessary for gathering your note and diagrams while also capturing the discussion that led to the notes.

The marketing question then is why Pulse was peddling their pens at JavaOne? Because geeks like tech toys, and at an opening price of $149, it is affordable. Oh, and their products are Java powered. Now that’s worth noting.

Bookmark to:

IBM knows how to club competitors.

Using Open Source for the betterment of your products is well understood. Using Open Source to grind your competitors face into the dirt is more of an art. Yet when done well it accomplishes the primary objective of competitive marketing – attacking your opponent’s strengths.

For technology marketing tyros reading this, understand that attacking your competitors weaknesses is a losing game. Weaknesses are typically marginal worries to consumers. If your competitor’s weakness were serious then they would have never become a competitor. Even if the weaknesses were important, they can be corrected and thus your assaults will be short lived.

Attacking their strengths however is to eat their souls.

Your competitor’s strengths are what made them successful. Any time you can assault their strengths you attack the very foundation of their prosperity. Successfully making their strength into a weakness will do more harm than nuking their headquarters. After all, they can build new offices once the ground stops glowing.

The trick is that competitive strengths are … well … strong. You must make customers believe the opposite of the compelling reason to buy that your competitor has created. Often this is merely impossible. If one were to attack Oracle database strengths – their robustness and scalability in particular, attempting to convenience people that these were Bad Things – you would be laughed at as their slapped you into a straight jacket.

Open Source allows you to do something even more insidious. It allows you to attack a competitor’s strength by promoting the same strength. And no, I am not wearing a straight jacket at the moment. It is out at the cleaners.

IBM lost the battle for the big database market. Depending on whose numbers you like to use, DB2 is well behind Oracle, Microsoft and MySQL. With Oracle now positioned to control the fate of MySQL via the Sun Micro acquisition (assuming that antitrust lawyers don’t put Larry Ellison in a legal straight jacket), Oracle runs away with nearly all of the market. Granted, MySQL does not add much to Oracle’s top-line, but the Open Source option keeps customers in their camp by covering all bases (graphic by JoinVision.com).

Unless, of course, there is an alternative.

While Oracle is acquiring MySQL to provide product to the low and mid market, IBM is investing in EnterpriseDB to reduce Oracle’s high-end revenue stream. EnterpriseDB offers the Open Source Postgress database with an added layer than makes it look like an Oracle instance. Users have Oracle’s PL/SQL interfaces atop a database that costs about 90% less than what Larry wants. Granted EnterpriseDB and Oracle databases are an apples and kumquat comparison. Oracle offers a lot of features that EnterpriseDB will not provide.

By and large that doesn’t matter.

IBM’s move to include EnterpriseDB with DB2 licenses attacks Oracles strength on two fronts. First, it gives customers a reason not to buy Oracle instances for non-critical applications. Customers need to have the number of database technologies kept to a minimum so developers and support staffs have less technology to master. If customers do not need the esoteric aspects of an Oracle database, having EnterpriseDB and IBM support are good options.

The juicy bit though is that IBM is using Oracle’s PL/SQL interface to bleed off enterprise adoption of MySQL. Since cost savings are the primary attraction to Open Source databases, EnterpriseDB offers Oracle shops a means for achieving a unified set of interfaces to databases while not enriching Larry, who according to recent news stories is the highest paid CEO in the United States, making north of half a billion bucks in 2008.

IBMs move then is removing the advantage of Oracle’s MySQL acquisition and simultaneously attacking Ellison’s high end revenue stream. Poor Larry will likely only make $400M this year.

Expect more of the same from other vendors. Open Source creates products that offer real value and real competitive threats. These products can be leveraged to hobble competitors. Large vendors will continue hunting for Open Source upstarts that can cause competitor convulsions.

In this instance though, I wonder if there is another feature afoot. IBM previously participated in a $10M round funding for EntepriseDB. They have more than a passing interest in EnterpriseDB. In theory EnterpriseDB’s PL/SQL layer is portable. Since IBM is bundling EnterpriseDB with DB2, there is a chance that the EnterpriseDB application interface could be ported to DB2, which offers some of the esoteric database features required by large enterprises. This may be the beginning of a concerted program by IBM to not only block new Oracle sales, but to migrate existing accounts.

You gotta love technology marketing. It’s like warfare but we use bucks instead of body counts to keep score.

Bookmark to:

Where is your cloud and how do you manage it?

I toss that question at an occasional CIO and get borderline lucid answers. Most don’t yet use clouds but lust after them. Others leverage public clouds for non-privileged and mission-uncritical work. A scant few have cobbled together their own private clouds (p-clouds).

P-clouds and rentable clouds are as similar to Sherman tanks and kangaroos.

The promise of agile clouds is that you would be able to establish your own internal p-cloud and extended it ad hoc to external, rented cloud resources. Currently this requires either a significant amount of home grown engineering or adherence to one or another public clouds tools and management protocols.

Either approach is anathema to IT.

All radical growth spurts in IT technologies have occurred when open standards were popularized. UNIX killed MPE, VMS and other also-rans. Likewise Linux is slowly killing proprietary UNIX and blocking Windows Server growth. TCP/IP and Berkeley Sockets killed Netware, Vines and a slate of sluggish competitors. x32 and x64 chips have all but eliminated SPARC, Itanium and other red-headed step children.

Standards make stuff happen because it invites commoditization and interoperability, the top two CIO wet dreams.

It is unsurprising then that a number of the smarter industry players are pushing standards for cloud computing. When a document titled the “Open Could Manifesto” is singed by IBM, Sun, VMware, Cisco, EMC, SAP, Advanced Micro Devices, Elastra, Akamai, Novell, Rackspace, RightScale and GoGrid, you see that standards are as important to vendors as well as their customers.

Oddly, HP and Microsoft are not on the list of signatories.

Microsoft’s absence is understandable, as is Amazon. Ballmer’s bezerkers have launched Azure. In their effort to own everything, Microsoft wants no part of plans that commoditize clouds. Amazon is as an understandable absentee too. Having popularized clouds they do not wish to diminish their lead in the industry.

HP however is puzzlement. The manifesto asks vendors to “ensure that the challenges to cloud adoption (security, integration, portability, interoperability, governance/management, metering/monitoring) are addressed through open standards.” HP has made good profit from standards be they PCs, servers or the network management protocols that feed their still wildly popular Openview suite. Perhaps HP was excluded from the manifesto group as IBM/Sun merger talks were in progress. Nothing marginalizes a competitor quite like excluding them from a standards group.

In their trashing of the manifesto, Microsoft marginalized itself.

The bugga in the boo is that the manifesto is nothing more than a declaration of desire – a love letter to the market. It sets forth high-level principles for cloud vendors to adopt and little else. It is a more threat than action – a way to get competing vendors to either commit to open interoperability or appear to the public as old-school lock-in tech companies (hence Microsoft’s absence). Like other religions, it articulates noble goals through pretty words.

The beheadings come later.

The Open Cloud Manifesto web site is sparse – more of a staging ground for discussion than a hotbed of action. Without action, without translation of high minded desires into concrete cloud interoperability, it stands as nothing more than a wiki of wonder. Let’s hope that IBM buys Sun and repurposes it as the leader in open cloud technology, using the Open Cloud Manifesto organization as engineering epicenter to the next wave of IT infrastructure.

Finally, a good use for Sun.

Bookmark to: