Tech Musings and Observations

Moving On Over.........

2009-12-17T05:12:00.000-08:00

After 3+ Years Blogging on Blogger I am moving domains to http://www.grahamlubie.com/. Come over and visit for more posts and analysis on:

Strategy
Product Management
Product Marketing
SaaS
Cloud Computing
Social Media
The Social Marketing Framework
Technology

Cheers,

Graham

The Dark Secret of Social Media....it's NOT free

2009-12-06T07:51:00.000-08:00

Do a search on Google using the terms "social media free" and you get 242,000,000 results, then do a search on "social media costs" and you only get 92,200,000. Clearly 92 million is a lot of results, but the 2.5x difference seems to indicate a belief that Social Media is Free. It is not - there are costs.

For the most part, these social media costs fall into the following general buckets:

Internal Resource Costs - specifically the personnel costs required to initiate, monitor and respond to social media conversations; and the personnel costs required to create the content that is used. We are starting to see both new roles being created to focus on this area (e.g. social media coordinator, community managers, engagement specialists, etc.), and additional responsibilities being added to existing resource's plates (leading to a reduction of focus elsewhere).
External Resource Costs - agency costs associated with supporting and advising social media activities, and the creation of content.
Technology Costs - the tools needed to Monitor, Contribute and Measure social media conversations. Many basic tools are free, but premium and integrated suites like Radian6 or Hubspot have fees associated. (Shameless plug: to get up-to-date info on social media technologies, follow my daily Twitter feed for the "Social Marketing Apps - Clutter Buster Daily Tweet" @ www.twitter.com/grahamlubie or do a search on #socmktgapps)

Companies are beginning to realize that there is a cost to Social Media. According to a recent Social Media and Online PR Report by Econsultancy, 54% of companies identify "the biggest barrier to better social media engagement is the lack of resources. Now the key issue for companies to address, is where will the Social Media budget come from? Existing programs or an expansion of marketing budgets?

Official Transcript from Steve Ballmer and Rupert Murdoch's meeting

2009-11-27T09:57:00.000-08:00

On Wednesday, the Internet was buzzing with the news that Steve Ballmer of Microsoft, and Rupert Murdoch or News Corp, were discussing an agreement that would allow Microsoft exclusive access to News Corp content. Here is the transcript from the Ballmer / Murdoch conversation that led to this announcement.

Ballmer: "Rupert, we both have a problem and I think we can help each other. Google is leaching your revenues away by indexing your content for free. If you let it go on much longer, your Media Empire will be as profitable as a bunch of high-school newspapers. Google is a thorn in our side as well. I am okay with giving them search advertising, but they are using those revenues to compete with Office, Outlook, Windows Mobile, IE and everything else we do. So here's my idea - let's cut the legs out from under Google. I will buy the exclusive rights to index your News Corp content, and then show it as online search results. It reduces the value of Google's results, you make money, and we benefit. Frankly, were making no money on search advertising now and can only improve by having better content."

Murdoch: "I like the idea. We will charge search engine providers to index our content. No pay - no content. Hey, I spend a fortune on all those Wall Street Journal people and Google simply goes ahead and indexes the content, and then charges for ads on the search results pages. This way, I make money and you reduce Google's value and associated revenues. If Microsoft gets my Wall Street Journal content and maybe a couple of other Financial site's content, why would anybody with interest in financial information, every use Google? Brilliant."

Ballmer: "So Rupert, here is where we get a bit of revenge as well. Google and the other search engines will be forced to pay for premium content, and then either pass the costs on to their advertisers, or they will need to take a hit in their margins. If this idea reduces the market value of all search providers, too bad. Either way, I don't care. Advertising in over 90% of their revenues and under 10% of ours. Let's see them try come into our business sectors without their big advertising revenue stream."

Okay - so the transcript is not the official one from the Ballmer and Murdoch meetings, but you have got to admit, it does make business sense for both of them. It will be interesting to see how the discussions continue, and how Google counters.

Social Marketing Apps - Clutter Buster Daily Tweet

2009-11-19T10:04:00.000-08:00

New Social Marketing apps are popping up every day, and it is tough to keep track of all the different players. So, starting today, I am sending a once-a-day Tweet highlighting an innovative Social Marketing app. Here's the general format: [AppName]-[Bit.ly URL]-[Type] #socmktgapps.

Break through the clutter.....click the "I Tweet Follow Me on Twitter button" and hear about the best and most innovative Social Marketing applications available on the market. 1 app will be highlighted Monday through Friday. So, sign-up and follow me on Twitter. My Twitter id is http://twitter.com/grahamlubie. You may get a couple of other tweets occasionally, but only a handful at most.

See today's Tweet about a great, real-time conversation monitoring application. It's very cool.

(BTW - I am tagging these as Social Marketing vs. Social Media apps since they are specifically related to the marketing function. I believe that "Social Media" is broader in range and can address functions outside of just marketing and PR).

Outside The Box Thinking - Improv Training For Your Marketing Team

2009-11-18T07:32:00.000-08:00

A recent Facebook post by Hubspot (inbound marketing SaaS provider) described how their marketing team was going through improve training. My first reaction was "Huh, improve training?" Could I understanding send a Product manager to a Pragmatic Marketing class? Yes. Would I send a Direct Marketer to a Marketing Sherpa Lead Gen Summit? Yes. But improve training?

After thinking about it a bit more, it makes sense. Given Hubspot's "inbound marketing" philosophy and their hypothesis that content is king, training your employees to improvise and create great content is valuable. Producing great content isn't easy and Hubspot produces a LOT of content like webinars, slideshares, podcasts, articles, whitepapers, videos, etc. So, given the large amount of content being created and the value of keeping that content fresh, it makes sense. It is also a great team building exercise.

Hubspot is not the only company that has tried comedy as a way to get their message recognized. About a year ago, Serena (developer of an enterprise mashup server) launched a video titled "Is Mashup a dirty word?". It has gotten over 1.2 million views on YouTube. IBM has also started doing humorous videos to push Mainframes. Yes - MAINFRAMES, and they have gotten almost 250,000 views of their YouTube skits.

So, while the videos are humorous, I do wonder about the value of them. How many of the viewers of these videos are actually in a position to buy a million dollar mainframe or mashup server? Probably a very, very, very small percentage. Do these videos makes sense from a marketing $ allocation standpoint or are they just another form of shotgun advertising? I don't know the answer for any of these three organizations, but I would suspect that their web analytical teams can tell if there is value, and if there wasn't any, they wouldn't continue to do them.

Micro ISVs are the Garage Bands of technology

2009-11-11T09:57:00.000-08:00

Balsamiq (see prior post) bills itself as a Micro ISV. Until a couple of weeks ago, I had never heard the term "Micro ISV" so I decided to dig a bit deeper. My findings in a nutshell: Micro ISVs are a very interesting concept and are viable because of the seismic changes that we are experiencing in marketing and technology.

Here's a basic definition: "A Micro ISV is an Independent Software Vendor (ISV) that has just a handful of employees and is bootstrapped. Typically the software is distributed online and has a Freemium or Try-Then-Buy business model". The appeal of Micro ISVs is pretty much like being part of a Garage Band. You work on your songs, get a couple of gigs a month, and next thing you know, Rolling Stones is calling for interviews.

The cost of being a Micro ISV is now lower than ever before. Rather than spending a lot of $$s upfront, it is possible to deliver great software using a combination of open-source plus SaaS offerings. Here are some of the components, by function, that a Micro ISV can draw upon:

Product Development

Open Source development stack (Linux, MySQL, etc.). Free
Source control, issue tracking, roadmap management, test automation, etc. (Altassian) $10 a month.

Operations:

Virtual Instances of the application on Amazon (EC2, S3, SQS, RDS). There is no upfront hardware to buy and it covers both website hosting and operations. Nominal fee. Usage based.

Support:

Community driven support forums, wikis, peer2peer support (GetSatisfacition + ZenDesk) <$30 a month.

Finance

Online sales and subscription management (Spreedly). $20 a month + 1 to 3% of billings

Sales & Marketing:
Lastly, but most importantly is marketing and sales. Most Micro ISVs sell either single user software or SaaS, and have either a Freemium (ie. basic app is free, but premium features cost more) or Try-Then-Buy (ie. get 30 days free and then start paying) business model. So, the basic marketing and sales strategy is to (1) connect online with high volumes of users, and (2) get them to try the software. There are no sales teams out in the field, and marketing needs to leverage inbound interest, rather than traditional (read costly) outbound lead generation. To accomplish this, Inbound Marketing is key. By using social media (eg. blogs, SEM, Facebook groups, Twitter, etc.), viral marketing (eg. tell a friend options in the app, etc.), and online advertising (eg. PPC), it is possible to get tremendous exposure and generate revenues on a shoestring budget.

Balsamiq is a poster child of Micro ISVs. They have embraced system thinking and have generated tremendous online exposure. Within 12 months, they were generating over $1m in revenue with just 4 employees. Pretty impressive.

BTW: [I am currently advising a Micro ISV on their go to market strategy and product marketing approach. Expect to hear a lot more about them, and our Social Media techniques over the next few months.]

A Good Wireframe's Worth More Than A 1,000 Words

2009-11-05T06:33:00.000-08:00

If you've ever designed a software product or built a complex website, you've gone through at least some of the following steps:

Gather Requirements
Brainstorm & Conceptualize using Wireframes
Do the Design
Develop
Test
Deploy

Well, step #2 of creating wireframes has gotten a whole lot easier with Balsamiq. It's a great tool for quickly creating wireframes and mockups. Balsamiq has a pallet of design components that allows you to do traditional client software, web-apps and mobile app wireframes. I recently used it to brainstorm an iPhone mobile app with a client. In just a couple of hours we were able to collaboratively do 80% of the screens and evolve how the different components would interact with one another. Having predefined iPhone images made life so much easier than having to create them one by one. Here's an example of how a screen gets laid out in Balsamiq.

Balsamiq is definitely a keeper.

The Best Marketed Software Ever!

2009-11-03T12:56:00.000-08:00

I have recently been advising a client on how to improve their marketing and sales effectiveness. The company is a very innovative manufacturer of industrial equipment and despite the economy, they are in rapid expansion mode. One of their key goals is to implement an integrated marketing and sales platform to more quantitatively manage direct sales, channel sales and marketing activities. The company has decided to move forward with Salesforce.com, a decision I wholly endorse, and a platform that I have led the implementation of twice in the past. But I digress, this post is not about the criteria for selecting an integrated sales and marketing platform, rather it is about excellent marketing.

After (re)evaluating the current features of a handful of CRM competitors like SugarCRM and Microsoft Dynamics CRM, Salesforce.com takes the cake. Their feature checklist keeps them in the game, but it is their marketing, sales and positioning that really makes them standout. Can't say it's surprising. Since Salesforce.com burst onto the enterprise software scene in the late 90's, they have year-in and year-out done an excellent job of positioning their solutions, defining value props and making it easy to try then buy. First, it was "No More Software" and "Lower TCO", then it was extendability within their ecosystem with AppExchange, now it is about "the Cloud" and the volume of success stories (1.5million success stories and counting) using their service.

Effective Positioning (Product Marketing & Product Management) is obviously critical, but the Promotion (PR, Product Marketing and Field Marketing) then Sales (Direct Sales / Indirect Sales) is where Salesforce.com really shines versus their competitors. They are the company getting the awards, driving the industry buzz, showing up everywhere and growing at an industry leading rate.

I guess if you are the segment leader in CRM, it is almost expected. So how could you replicate Salesforce.com's success? A good team and strategy is important, but Marketing & Sales spending is where the difference really comes in. Microsoft, CA and Intuit all have strong teams, sound strategies and are certainly no slouches on the Marketing & Sales front, but the discrepancy in marketing spend is astounding:

Sales & Marketing as a % of Total Revenues From Most Recent Financials:
Microsoft spent $12,879m on $58,437m [22%]
Intuit spent $927m on $3,183m [29%]
CA spent $1,214 on $4,271m [28%]
Salesforce.com $534m on $1,076m [49%]

What is even more remarkable, is that Salesforce.com is essentially a one trick pony (i.e. CRM). All the others have broad portfolios of products and services.

Bottom Line: While business success requires excellent Marketing and Sales execution, outspending your competition and blowing the doors off of industry spend comparables, certainly doesn't hurt.

Good list of social media Do's and Don'ts

2009-11-02T15:29:00.001-08:00

Dave Nelsen of Vistage has written a good list of the 10 Do's and Don'ts of Social Media. I highly recommend it for anybody thinking about getting started in Social Media. Check it out.

Design Thinking: 1+1+1=5

2009-10-28T07:35:00.000-07:00

Tim Brown of IDEO recently delivered a tremendous presentation at TED on "Design Thinking" or System Design and System Thinking. His ideas focused on design "interactions" versus just individual design "points". Basically the system is more than the sum of the individual components. The concept really resonates with Rule #5 for successful Social Media: Be Excellent . Let me explain.

In today's world of 360 degrees of transparency and millions of eager bloggers and tweeters ready to broadcast their complaints in 140 characters or more, any design inefficiencies or breakdowns are public knowledge. Rewind just 10 years and things were very different. If a product was badly designed and failed, customers had very few options. They could call customer support, they could get a lawyer involved or they could "deal with it". Today, consumers have much higher expectation levels and a design (product or service) doesn't have to fail for there to be an instant outcry. If a design does not meet a user's expectation levels the outcry is on Facebook, Twitter, Stumble Upon, and all rest.

Looking more broadly, effective System Design has contributed to many leading technology organization's success.

Salesforce.com's low-cost, high-volume business model is dependent on customers subscribing and using the system without a lot of human intervention. To facilitate this, Salesforce.com has a very easy sign-up process, an intuitive interface, great user help documentation and lots of recorded training. Could Salesforce.com be successful without all these System Design component in place? I don't think so.
On the other end of the business model spectrum is SAP. A notoriously expensive and complex application to implement, SAP has focused on big ticket sales with significant revenues going to consulting partners. To make their partners successful, SAP provides significant training, certification and extensive configuration options.
It is impossible to discuss design thinking without including Apple. iPod / iTouch + AppStore + Physical Store + Genius Bar combine to deliver a system nobody can match. Apple takes Design Thinking and System Design to a totally different level than Microsoft Mobile and Blackberry come close to.

Different businesses and different models, yet all three have been successful through great end-to-end System Designs. Want some more examples? Here's a handful of smaller companies (strangely they are all SaaS) that embody design thinking and deliver excellence:

Spreedly - online subscription billing
Get Satisfaction - customer support community
Less Accounting - SMB accounting package
Balsamiq Mockups - software mockup tool (very cool and future blog posting)

Bottom Line: Design Thinking is the way to go. The sum of the parts result in competitive differentiators and a greater whole. Half-baked solutions just won't survive in a world of complete transparency and instant feedback.

5 Steps For Steering Rolling Boulders (and your Social Media activities)

2009-10-19T17:52:00.000-07:00

So how do you guide the Rolling Boulder of social media? In my last post I covered why marketers have lost control of their brands. Now what? First, lets take the "glass is half-full" approach. As a marketer, you may have lost some control, but you now have significantly more tools to get your message out than ever before. If you are a corporate exec, you are closer to your customers and you can get much more info from them real-time. Great - now let's talk about how you can implement a social media program and steer the online conversation.

As a framework for your social media program, I suggest using the 4 steps of "OMMI" + 1 bonus rule. OMMI stands for "Objectives - Measures - Methods - Initiatives". Let's see how OMMI translates into practise:

1. Set Your Social Media Objectives

Unless you know what you want to achieve, you social media initiatives will drift. So, determine your Objectives first. Naturally the objectives or a well established consumer brand will be quite different from those of a marketing agency or "brick and mortar" business.

Here's are some examples: I am working with two very different companies on their social media programs; a growing industrial equipment company and an international child safety products company. The industrial equipment manufacturer has the following two social media Objectives: (1) establish themselves as "the most innovative company in their segment", and (2) build their online brand presence for their target demographics. In contrast, the child safety products company's objectives are: (1) any time somebody researches "car seats", they want feedback on their products from across the web to show prominently in the search results, (2) any valid, negative online feedback of their products need to be addressed with a company comment, and (3) they want their brand to be associated with being the safest seats out there.

2. Identify how you will Measure success.

Tracking your efforts using KPIs to quantitatively measure your progress is critical. The effectiveness of different Social Media mediums need to be evaluated using different metrics. If you aren't sure which KPIs to use or don't have the resources, consider a specialty analytics agency like Maass Media.

As you experiment and iterate, you will generate quantitative data and be able to refine your campaigns to increase demand, increase satisfaction, reduce costs, etc. It is quite likely that your KPIs will evolve over time as well.

3. Implement the Methods (People, Process and Technology) to achieve the Objectives.

Identifying all the possible Methods for managing your social media activities is beyond the scope of this post, but here are a handful of conversation starters:

Technology
There are a variety of different technologies that can be deployed to enable and monitor your social media initiatives. In fact, some of the technologies will be part of your social media campaign. This posting can't cover all the different technology components, but there are a few "minimum requirements":

To track your metrics you need tools for Monitoring and Measuring

Omniture or Google Analytics for your website visits, blogs and microsites. They also can be used to track which social media outlets are driving the most site visitors
Twitter Search allows you to search for keywords or phrases. You can also setup realtime alerts using tweetbeep when someone mentions your particular keyword/phrase/product/etc
Google Alerts allow you to setup your Dashboard widgets and emails to track your particular keyword/phrase/product/etc
Track everything in one place with Squidoo's - Brands In Public tool
Monitor with services like Nielsen's Blog Pulse

To drive the conversation you need tools for Community Engagement (beyond the social media sites themselves)

Get creative and co-opt the conversation - build plug-ins and widgets that your customers can embed in their blogs. For example, Huggies released a “Baby Countdown” widget for customers to add to their desktops. Guess what brand of diapers they will be thinking about when they go to make a purchase.
Timberland built an iPhone app that has a compass, click to talk, provides trail maps and other cool stuff that reinforces their brand using social media.
The American Cancer Society has a Facebook page with over 1 million fans that participate in their promotions. Don't want to build the promotions yourself? Use Wildfire to do the heavy lifting for you.

To make it easier to contribute to the conversation you can use Social Media Enablement tools like:

Process
Your Social Media activities cannot be addressed ad-hoc. There has to be a structured, process-centric approach. From a process standpoint, there are proactive and reactive components that need to be addressed:

Proactive Actions - establish the tasks that need to be performed on a consistent, scheduled basis. For example, weekly blog posts, daily comments on industry articles, hourly Tweets and periodic LinkedIn answers to industry relevant questions.
Reactive Actions - establish how negative issues will be addressed and then implement a process to make sure that plan is followed. For example, if there are customer complaints, what's the decision tree cycle on when to respond and how to respond to the complaints. You might not want to respond to all online complaints individually (that would circumvent your customer support processes), but if there are a lot of similar issues, use a template response to ensure consistent communication. You could even host a community forum with a recorded video (on YouTube of course) to discuss how the issue is being addressed.

People
Social media (guiding the boulder) is NOT just a marketing and PR function. Let me repeat.....social media is NOT just a marketing and PR function. It is a corporate function. Product Management must take customers feedback and incorporate it into the product, Support must know about issues and work to proactively resolve the issues, Finance (if publicly traded) should know about the online buzz as well. Marketing must be the leader however.

So, to be successful, you need to build an organization that can manage your social media processes and respond to changing dynamics. Each company will need to figure out which structure meets their own needs best - whether its a Chief Community Officer and a team of Social Media Ambassadors, whether it is 100% outsourced (which I don't recommend), or some other structure, there needs to be an organizational mindset that goes beyond just marketing and PR.

4. Initiatives
We are so early in the Social Media cycle that there are no right or wrong approaches. However, if you don't get started, execute on a few initiatives and learn from your own results (?mistakes?) your learning curve will just get steeper and steeper. Like any initiative, track success against your metrics and aim to get 360 degree feedback from customers, employees, partners and pundits. Then evolve your campaigns and processes based on the results, experimenting and testing is a lot cheaper online than offline - do it.

And finally, Rule #5 for guiding your Social Media initiatives: Be Excellent

Lastly, but probably most importantly, BE EXCELLENT. As with all great brands and reputations, excellence is critical. It doesn't matter how much you invest in guiding the online conversation, if your product or service in not excellent, you will not be able to succeed. With social media your strengths are magnified, but so are your weaknesses.

Reinforcing this idea of Excellence as the foundation of social media comes from online guru Dave Evans: "... Marketing sets the expectation, marketing creates demand, marketing helps a consumer differentiate why one choice is better than another choice. Operations delivers. Any gap between the two drives a conversation on the social Web."

If your product or service is not excellent, the conversation can quickly turn into an incident.

The Bottom Line: We are very early in the social media lifecycle and there are no industry wide best practises. So, experiment, iterate and chart your own course.

Rolling Boulders and Social Media

2009-10-05T14:32:00.000-07:00

If you are a marketer, it's time to face a hard truth.....the world has changed and you have close to zero control over your online brands. This is a big contrast to the good old days of advertising and communications, circa 1998, when you could still exert tremendous brand control through advertising, promotions and PR.

Am I exaggerating? Maybe a bit, but let me use a rolling boulder analogy to explain. Here are two scenarios:

Flat Ground - image a big boulder sitting in the middle of a nice flat lawn. To move it, you simply push that rock in the direction that you want. The more people (or $) you throw behind the effort, the further and faster you can get the boulder to move.
A Hill - now imaging the same boulder perched on the side of a hill. Once you get the boulder rolling, gravity is in charge. You can maybe guide this big rock with a nudge here and a push there, but as it gains momentum you lose true control.

Controlling rolling boulders is not too different from trying to control brands and your online image in today's social media world. With the gravity of bloggers, tweeters and all the other social media options, it is practically impossible to maintain control over your brand, there are just too many possible alternative viewpoints and inputs. So, your brand is no longer just what you say it is, your brand is what the social media crowd influences your brand to be. All is not lost.....being a part of the online conversation is good and you can still guide it.

The Bottom Line: If corporations, agencies, marketing / communications execs have no true control of their online brands, what can they do? Well, that's a billion $ question and the answer is "5"... as in come back soon to read my next post on the Five Rules For Steering Rolling Boulders (....and guiding your Social Media programs).

Google Wave - The Opportunities Are Tremendous

2009-10-01T12:57:00.000-07:00

I just previewed Google Wave and the opportunities for extension & integration are tremendous. I am excited to see the apps from B2C developers (Lonely Planet already has a cool tool) while B2B SW companies have an awesome new platform / capability to integrate and extend their functionality (and value props) with.

Starting out, SAP and Salesforce.com have developed two elegant apps for BPM and Customer Support respectively. The SAP BPM solution raises the bar on competing BPM designers and workflow tools, while the Salesforce Robot concept is very innovative.

There is tremendous value for B2B SW apps that require sequential tasks to now be done collaboratively in real-time. Once you add in voice integration and text transcription capabilities that Ribbit has developed, you can get a really differentiated solution (until the competition catches up). For example, if you need to design, review and iterate something, Google Wave now makes it possible to do the three steps at the same time. Off the top of my head, the following companies can (or will need to) leverage Google Wave like functionality to deliver an enhanced user experience:

iRise - application designs and interactions can now be developed and reviewed real-time with playback;
Pegasystems / Lombardi / etc. - SAP is raising the bar on collaborative process design. These BPM companies will need to match capabilities;
AutoDesk / PTC / Dessault - developing and reviewing engineering blueprints can now be done more interactively;
Adobe - real-time reviews of visual deliverables and copy will be tremendously valuable when the editors and reviewers can all work on the same information.

It will be interesting to see how Google Wave evolves and how B2B and B2C developers leverage the platform.

Cloud Computing is THE SaaS killer...with a little help from some friends.

2009-09-14T08:59:00.000-07:00

Did the title make you go "HUH"? Let me explain.

First a couple of definitions:

SaaS or Software as a Service [from Wikipedia] - "is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand." Key characteristics:

network-based access to, and management of, commercially available software
activities managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
application delivery typically closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
centralized feature updating, which obviates the need for end-users to download patches and upgrades.

Cloud Computing [from Wikipedia] - "is a paradigm of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet.^[1]^[2] Users need not have knowledge of, expertise in, or control over the technology infrastructure in the "cloud" that supports them. Cloud computing customers do not generally own the physical infrastructure serving as host to the software platform in question. Instead, they avoid capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use. Many cloud-computing offerings employ the utility computing model, which is analogous to how traditional utility services (such as electricity) are consumed, while others bill on a subscription basis. Sharing "perishable and intangible" computing power among multiple tenants can improve utilization rates, as servers are not unnecessarily left idle (which can reduce costs significantly while increasing the speed of application development).

SaaS has differentiated itself based on being more cost effective and easier to deploy than traditional SW tradeoffs are that all customers (tenants of the SaaS infrastructure) are updated at the same time, customers are locked into the deployment and customization is virtually impossible. Now there is a way for Independent Software Vendors (ISVs) to deliver the ease and cost effectiveness of SaaS without many tradeoffs. How? By combining three evolving technologies: Cloud Computing + Software Appliances + Automated Provisioning Management. Let's call this solution combination: Cloud Application Deployments or CLADS.

How CLADS can work is pretty simple:
1. As part of a standard Software Lifecycle, a Software Appliance would be developed for each released build.
2. These Software Appliances would be made available for distribution
3. For a "SaaS Like" distribution, the Software Appliance could be automatically provisioned to a Cloud Computing provides like Rackspace or GoGrid.

Here are just a couple of ISV business use cases where CLADS levels the playing field:

Providing Demo / Trial Accounts: 'Free Demos' are a staple marketing component of SaaS providers. For ISVs, creating demo and trial accounts is often difficult, time consuming and costly. There are multiple components and ISVs typically do not have the hosting infrastructure expertise that a SaaS provider has. Also, creating demo environments based on a dedicated physical infrastructure can be very CLADs. With CLADs, ISVs benefit because:

Hosting is provided by a 3rd party with infrastructure expertise
Costs are variable based on actual usage - you only pay for what you use
The ISV can maintain strategic focus

Deploying Implementation Environments: Enterprise deployments (ie. non-SaaS) often require multiple environments for development & configuration, for staging, for issue validation and for production. Each of these environments requires upfront setup and then on-going maintenance. With CLADS, ISVs benefit because:

Customers can get their different environments provisioned and ready to use very quickly with minimal effort
Upgrades to customer environments are easier since they can be done when the customer choose to have the upgrade, not when the SaaS provider chooses to do the upgrade

Bottom Line: With Cloud Computing + Software Appliances + Automated Provisioning and Management, ISVs (open source and closed source) are able to eliminate many of the advantages that SaaS providers have used to differentiate themselves without losing the benefits that ISVs have traditionally had. The next logical conclusion is that without their differentiators, many SaaS options (see my blog post on different SaaS types for why I say "many" not "all"***) will be at a competitive disadvantage versus traditional ISVs.........and that's how Cloud Computing (with a little help from some friends) is THE SaaS Killer.

*** Note: SaaS will not be going away as a delivery model. However, undifferentiated offerings (ie. those that don't bring a special sauce" will have a very tough time going forward.

Enterprise B2B - It's all about the Value Proposition.....feature/function just gets you into the game.

2009-08-20T06:40:00.000-07:00

I have been helping a former colleague (Mark) create the marketing plan and product roadmap for a new product concept that he is working on. Without revealing the details of the idea, it is a very innovative B2B SaaS solution for Cloud Computing management.  Along the way, one question has consistently driven him crazy. Here is a paraphrasing of how the conversations typically go:

Graham:      So what is the business value of the solution?
Mark:         It will help customers make the management of their Cloud Computing initiatives a lot easier.
Graham:      How?
Mark:         By giving the administrators more information and tools.
Graham:      How will the "information and tools" cut costs or increase revenues?
Mark:         I don't know but there is a lot of really good functionality.

OR

Graham:     Why would somebody buy this solution?
Mark:        Because it will make life easier when managing multiple Cloud Computing initiatives.
Graham:    Compared to other alternatives, will it save time? save money? reduce risk? increase uptime?
Mark:       Yes
Graham:    What's the typical ROI?
Mark:       Hmmm

These two conversations are pretty typical of the gap between a feature/function product concept (often in engineering*) and a go-to-market strategy with value based positioning (in marketing & sales). In Enterprise B2B feature / function positioning just doesn't cut it anymore. Buyers are more savvy than even a decade ago and are driven by bottom line considerations. Buyers are asking: "How is this going to help my business and how am I going to get approval to spend the money?" You need to have an answer and your product management / marketing team needs to make sure that it is a good one.

The Bottom Line: when selling a B2B product, you absolutely need a baseline set of features to "get into the game", but the business value proposition is what closes the deal (and supports higher price tags).

*Note: I have found this conversation typically happening when Product Management is aligned with engineering and "feature / function" focused versus business focused.

Twitter? Show Me The B2B ROI

2009-06-20T10:28:00.001-07:00

A colleague of mine recently asked if we were doing anything with Twitter, and she was shocked when I said "No". I proceeded to explain that while I am always looking for new ways to get exposure for IQ, I can't justify the expense (yes I know it's free - but as with any other communications initiative, it does have a content creation and internal "maintenance" cost) without an ROI. All my other tactical marketing programs have an ROI expectation, Twitter would be no different.

There is so much hype about Twitter right now, that the need to quantify actual business value is getting overlooked. If there is no value (measured by return on investment), why do it? If you Bing "Twitter ROI" you get about 535,000 hits with Dell's $3m total revenues as being the ROI poster child.....not too impressive given Dell's multi-billion dollar annual revenues and that they have been Tweeting for 2 years.

For B2B marketing, especially of enterprise applications, there is an even bigger hurdle to Tweeting.....sales dynamics. Who is going to follow you unless they are either in a search and selection mode, or they are a competitor? If a potential customer is looking for your type of product, they will engage you directly. Where is the value to them to get Tweets from you every 20 minutes? The information they need to make their decisions is coming from a sales rep directly at a very different pace. Other information will be gathered online via search, from analysts or from references.

So, I have discussed Tweeting with both my Marketing and PR agencies and neither can provide a compelling reason to take the jump. It will be interesting to see how the medium evolves.

Inspired By Excellence

2009-03-23T16:04:00.000-07:00

In my last post I mentioned Kiva and Mint, two organizations that I have recently chanced upon and have been impressed by. Let me add another one called Project Jing - it is a screen capture software product by the makers of Camtasia. Basically it adds a "small sunburst circle" to the top of your screen that you can click on when you want to take a picture or record something on your screen. When you are done recording, it saves the image / recording to an online server - you can then email a link to the recording or embed it in an IM or blog. See how it works by clicking this link: http://screencast.com/t/CaOFQrtS - it is a recording of me writing this blog. Background music is courtesy of Pandora.

There is a commonality to each of these products: EXCELLENCE.

they are unique concepts and valuable solutions that are facilitated by technology;
their messaging, visuals and branding are concise, consistent and powerful;
their User Interfaces are elegant, easy to use and very well done (Project Jing is especially unique); and finally
their execution is flawless across the board.

Excellence does not happen by chance. It requires planning, teamwork, creative thinking, determination and lots of hard work. While I have always considered myself to be creative, highly motivated and successful at most things that I put my mind to, I am still inspired by each of these products to truly deliver excellence.

Giving Back: Part 2 Messaging and Branding

2009-03-13T12:42:00.000-07:00

In an August 08 post I mentioned the Taproot Foundation, a pro bono marketing organization that I volunteer for as an Account Director. After completing a Messaging & Branding project in January for Youth Build Boston, I recently visited their website. It was extremely gratifying to see the messaging and branding work that we delivered incorporated directly into their whole site.

Cool Rethinking - Rethinking Cool

2008-11-05T19:05:00.000-08:00

Giving Back

2008-08-12T18:39:00.000-07:00

While living in Atlanta and working for Accenture, I did a ton of volunteer work for Hands On Atlanta (HOA). HOA is an amazing non-profit organization where "Every day, Hands On Atlanta volunteers serve with more than 400 community-based agencies and schools throughout Atlanta.". Since moving to Boston, I haven't taken the time to give back and that has been concerning me. Well that's changing...

I recently became involved in Taproot Foundation, a non-profit organization that provides pro bono marketing services (strategy, branding, positioning, websites, brochures and annual reports). There are a couple of main things that attracted me to Taproot (1) I can bring marketing expertise to the non-profit sector and have a significant impact in an accelerated time frame, and (2) Taproot has done a phenomenal job of creating step-by-step process methodologies for each of their project types. Being a total project and process "geek" I really appreciate the benefits that a well structured methodology delivers to Taproot, the account directors and the non-profit.

So, I am getting ready to kick-off my first Taproot project as an Account Director. Once I get into the swing of the project I will write another update.

A SaaS Go-To-Market Segmentation Framework

2008-05-10T12:52:00.001-07:00

While SaaS is a relatively new deployment option (since ~1998), it is still governed by the fundamental rules of B2B marketing: understand your customer (research), make sure that you connect with them (lead gen), and then provide them with a value proposition that they can't refuse (product positioning). Sort of like the Godfather movie but without the terminal consequences. It's a terribly summarized overview of B2B marketing, and one that my old marketing professors Kottler and Sawhney would probably raise their eyebrows at, but fundamentally it's true There are however a number of twists in marketing SaaS that distinguish it from traditional SW sales.

To start with, SaaS is just like installed SW in that there is no one-size-fits-all solution. Different SaaS applications will appeal to different customer demographics. The functional and technical requirements of a 5 person consulting organization are vastly different from those of a $5B bank. For example, the consulting organization probably does not need LDAP integration while the bank will need LDAP (or equivalent) integration into its security infrastructure. The bank will most likely also willing to pay for process refinements and user training as part of a standardized rollout methodology. The Net Net is that any SaaS go-to-market offering needs to be designed for the specific segments that are being targeted.

I have developed the following segmentation framework to analyze and plan a SaaS go-to-market program. Specifically, it is focused on strategic product positioning based on the deployment of the SaaS solution - it does not address any of the tactical marketing / lead generation programs. Also, I am making an assumption that the solution itself is solving a material business problem -- if you are not solving a problem and meeting a need, all the positioning in the world is not going to make a difference.

The following images provide a fairly self explanatory overview of the framework.

(1) Defining the Organizational Impact of the SaaS solution:

(2) Defining the Technical Impactof the SaaS solution:

(3) Using the Technical Impact / Organizational Impact structure, here is how some existing SaaS players stackup:

(4) Breaking the segmentation up a bit further, you get Three Tiers of SaaS Go-To-Market Options:

(5) SaaS Go To Market Actions By Tier:

*When it comes to compensation, SaaS sales introduce complexity. How do you compensate the salesperson? On the total contact value? On a per sale value? What if you are in Tier 1 and offer a 30 day free trial? Or Tier 2, a 90 day paid pilot? Or Tier 3, a 1 year subscription with a service based cancellation clause? Lot’s of interesting topics for another post.

So, this post has been a bit more extensive than most, but it does give a good idea of the structure that I have defined and implemented at IQ as part of our segmentation and go to market strategy. This structure works for us and there is a good chance that it is flexible enough to work for you. At the very least, it is a starting point for how to do your own segmentation and frame your own strategy.

Only Possible With SaaS.........

2008-04-27T22:03:00.000-07:00

In a couple of my past posts, I pointed out that SaaS is not a one-size-fits-all deployment option. However, I do believe that there are some types of solutions that can only be effectively delivered as a SaaS solution - call it the "SaaS only" option.

Typically, "SaaS only" is applicable when the software/service meets one of four functional criteria:

(1) "SaaS only" solutions require significant deployment and operational resources to be effective. The Celarix logistics visibility service is a good example of this. To achieve supply-chain visibility, you need at least 20 interfaces to logistics providers. Setting-up those interfaces is extremely costly and time-consuming. Managing them going forward is also complicated with hundreds and thousands of inbound transactions every day. With over 300 predefine interface as part of their service, Celarix can provide customers with the visibility they need significantly faster and more cost effectively than any other alternative.

(2) "SaaS only" solutions include data that requires constant updates. There is a brilliant new service being launched that can only be successful in a SaaS model - let's call it LeadDB. It's not the services' real name, but it is still in Beta and under-wraps. IQ is participating in the Beta. LeadDM provides a list purchasing service unlike any others that I have encountered. Once you have logged-in to their service, you can enter your segmentation criteria and they will return target names that meet those criteria. You can then buy specific names one-by-one or in bulk. Fast forward to their new offering - by adding a couple of lines of code to your website, you can receive contact names (that meet your segmentation criteria) for the companies that are visiting your site. Set a monthly budget and distribution rules and each day you will get a list of potential prospects for your lead gen activities. It's a great way to bridge the gap between people that complete our online forms and those that just visit. Given the timeliness of LeadDBs data and the complexity of updating their contact database, there is no way this type of solution would be possible in any model other than SaaS.

(3) "SaaS only" solutions provide information that is only available by aggregating data across their customer base. Google has just rolled-out a new capability in their Analytics tool called Benchmarking. Basically you can use it to benchmark yourself against your peers and see how your site performs in 6 different categories (IQ currently outperforms in 5 of 6 and our next website release should address #6). It would be impossible to do this type of analysis in non-SaaS analytics packages.

(4) "SaaS only" solutions include a value-added component in their service. Constant Contact (CC) is a great example of this. The CC service has a few main components: (1) email creation, (2) list management, and (3) email distribution (with SPAM management, SPAM compliance validation and white listing). Of these components, #3 is most useful to me. I can easily replicate components #1 & #2 using an installed product, but having a level of assurance that my domain won't be black-listed as a spammer is a major benefit. A benefit that CC provides as part of their SaaS model and one that I could not easily replicate.

So, anybody thinking of deploying a new software solution (or re-deploying an existing one) in a SaaS model should really evaluate if their solution meets one of the four "SaaS only" criteria, or if the change is simply a "buzz" driven decision.

Next up is a model for identifying SaaS go-to-market strategies (i.e. marketing, sales, services) based on target customer profiles. Stay tuned.

SaaS, Governance & The IT Bypass

2008-04-15T06:42:00.000-07:00

My last SaaS posts were mostly about SaaS from a SW company's strategic perspective. This one is as a SaaS consumer - from the viewpoint of business and IT users.

As a business user, SaaS represents a wonderful opportunity to find and start using new applications that make my job easier. All I need is a credit card, a computer and an internet connect. Great - after 10 minutes I can hit the ground running with my free trial. One monthly price and I have no IT budget hassels (hence the bypass), no servers to install, no backups to worry about and no datacenter costs. Personally, at IQ, I use a variety of SaaS solutions and wouldn't want it any other way. Neither would our technical team - they are too busy building innovative technology. So, for a small to mid-sized business or department of a large organization, the model is cost effective and works well.

The picture is not so rosy for larger IT organizations. Imagine this very real scenario: Mary in accounting needs a better way to organize and store invoices, so she get a SaaS subscription to InvoicesAreUs (a SaaS startup) for herself and 5 other team members. Bob in marketing wants to store his collateral online and make it available to the sales team, so he gets a Google Sites account and creates a quick intranet. Meanwhile, the CIO has just paid $10 million dollars for an enterprise Documentum license. Fast forward 3 months, InvoicesAreUs goes out of business and Bob gets fired? There is suddenly a crisis. Nobody has a record of the invoices, since Mary scanned the hardcopies into InvoicesAreUs and then destroyed them (naturally the InvoicesAreUs database is no longer available); Bob still has access to the online Google Sites since nobody has revoked his authorization (there is no tie-in to a central LDAP or similar security directory); and the CIO suddenly has to figured out why employees are paying monthly fees for something that he has already bought.

Could this fiasco have been avoided? Well, yes with 3 main governance components:

(1) All SaaS purchases must be approved to ensure that there is no overlap with existing or planned systems that the purchaser is unaware of;

(2) All SaaS user accounts must be authenticated against a central LDAP (or similar) directory so that users can have their access to the systems withdrawn;

(3) All SaaS data must be provided on a backup schedule with a mechanism to view and manipulate the data outside of the SaaS application.

So, what's the bottom-line? SaaS can be incredibly useful, valuable and cost effective, but to be successful, SaaS vendors need to support coporate IT's governance and security requirements.

Nucleus Research misses the mark on Saas vs ASP

2008-04-04T09:28:00.000-07:00

I have been an interested reader of the Nucleus Research's studies since they launched. For the most part their analysis is insightful and balanced but they really missed the mark in their "Hosted versus on-demand" study.

http://nucleusresearch.com/research/notes-and-reports/hosted-versus-on-demand/

If you have ready any of my other posts on Software as a Service (SaaS), you will realize that I consider SaaS to be a strong business model and a great deployment option, but I do not consider it to be the best model or the death of SW as we know it. It will be a delivery model, but not the only delivery model available. Yes, this runs contrary to a lot of pundits (like Nucleus Research), but let's face it - there are a variety of attributes that make a product successful in a SaaS model, while there are other attributes that would make it less successful. For example, highly integrate applications are not well suited to SaaS given volumes, latency, etc. On the other hand, services with additional value-add components like GSX / Celarix or Constant Contact are perfectly suited. Also, hell will freeze over before government entities and a lot of large organizations use SaaS as the only delivery model for their applications. There are just too many compliance, legal and security issues that they would have to overlook or ignore to make it feasible. For many organizations, economics is also not a good reason - the US Government and Fortune 100 companies each have significant enough data center expertise and economies of scale that very few, if any, SaaS providers can compare to.

Most importantly, just providing a solution in a "multi-tenant architecture" is not enough justification for a SaaS model. Multi-tenant architectures work well, that is how we deployed Celarix, but they also have downsides (which Nucleus forgot to mention). Everybody has to get upgraded at the same time, regardless of organizational change management impacts or interfacing issues. If the application is down or performing slowly, everybody is impacted. I have experienced these issues at Celarix (fortunately very seldom). At IQ, our applications are provided either on-site or on-demand (ASP / SaaS). Each customer gets their own virtual instance of their application run from a cluster of blade servers. The cost economics work well AND the customers can define their own backup, interfacing and security requirements. The choice of deployment option is up to our customers (which is where it should be).

At IQ we use a variety of SaaS solutions such as ADP, ConstantContact and GoToMeeting amongst others. Each of these solutions deliver financial value - I don't need to get servers, communication lines setup or IT resources involved. Each of these solutions also deliver unique business value (e.g. ConstantContact takes care of message delivery and SPAM compliance), but that doesn't mean all applications deliver additional benefit from a SaaS model. That I believe is the fundamental issue I have with Nucleus' report - software that delivers unique value as a SaaS solution should be delivered as one. Otherwise give the customer a choice.

Wow!!! What a brilliant philanthropic idea.

2008-02-24T11:47:00.000-08:00

While reading the March edition of Fortune, I came across Kiva, a philanthropic "company" that is truly brilliant. I am seldom wowed by an innovative concept or business but this has been a good week. First I stumbled across Mint (http://www.mint.com/) to manage personal finances, and now Kiva.

Using a network of Micro finance organizations, Kiva enables individuals to fund specific entrepreneurs around the world. I liked the idea so much that I have just invested in a handfull of individuals. Not only is the Kiva concept impressive, but so is their execution - everything from their homepage through loan payment is well done.

A couple of paragraphs on this blog cannot do the concept or organization justice -visit http://www.kiva.org/ to learn more and participate. You can also click the banner link on the side of this blog - it's not advertising, just a way for more people to get involved.

Become a loaner - I did.

Nicholas Carr Grades Out At A "B"

2008-02-13T11:00:00.000-08:00

I recently read an interview with Nicholas Carr of "Does IT Matter?" fame. His general position, is that as Utility Computing takes-off, IT will become redundant.
http://www.cioinsight.com/c/a/Expert-Voices/Nicholas-Carr-Why-IT-Will-Change/

All in all, I think that he is going for headlines rather than taking into account the distinction between "powering IT assets" versus "delivering computing resources and applications". Powering IT assets has already changed, and IT organizations already use external providers to "power" their technical operations.

Using IQ as an example, our SaaS offering is used by a variety of Fortune 1000 customers and we run it from a third-party data center. In each of the sales to these customers, an IT representative had to bless the deal, knowing full well that they are 2 degrees removed from the actual applications. From an internal perspective, our production websites are run by a specialized service provider as virtual instances. I would much prefer to have them take on the responsibility for bandwidth and HW capacity provisioning.

In each of these examples, the production assets are managed by an IT operations group. So, the staffing of these IT resource may shift somewhat from service users (i.e. business users) to service providers (i.e. grid computing providers), but they are not going away.

Sharpening The Saw Ends In Spider Webs

2008-01-21T20:41:00.000-08:00

An old mentor of mine has always preached that life is a journey and that you need to constantly "keep your saw sharp", implying that periodically you need to pick your head up from the grindstone and learn about evolving strategies, trends and techniques. Given the incredible pace in which options for marketing promotions [Kotler's P #4] are evolving, his advice is an absolute requirement to be effective.

Over the last couple of months [mostly between Xmas and New Years] I did a deep dive into the most current thinking on SEM and SEO. Gotta love Marketing Sherpa, Marketing Experiments, vendor white papers and easy access to thousands of online opinions. Well, it was encouraging to see that the techniques we have been using at IQ are current and in some cases "leading edge". We have moved beyond focused website optimization and scoring, landing page testing, conversion tracking and lead nurturing.

I see one 'gap' in current online practices.....current B2B approaches seem to be focused on either Instant Gratification or Long-term Nurturing. There is very little attention on the step after Instant Gratification but before actual sales team engagement. For IQ, given our sales cycle, a sales person is always involved in the purchasing process. So, let's compare a Typical B2B Lead Capture Best Practise (current IQ approach) to what I will call a Spider Web (potential IQ approach).

Typical B2B Lead Capture Best Practise

Marketing campaign run [online / offline]
Prospect is sent to a landing page with analytics tracking
Landing page has a focused call-to-action (CTA)
Prospect enters their information
Prospect information is added to CRM system [lead scoring may happen]
[Instant Gratification]
Screen shows a "thank-you somebody will be in-touch" message
The End

An Alternative Spider Web Approach

Marketing campaign run [online / offline]
Prospect is sent to a landing page with analytics tracking
Landing page has a focused call-to-action (CTA)
Prospect enters their information
Prospect information is added to CRM system [lead scoring may happen]
[Enter The Spider Web]
Screen shows a "thank-you" message + contextually relevant additional information for the user to click-on / learn more about
The End

What's the big difference between Spider Webs versus Typical B2B Lead Capture Best Practises? Maybe the following points can illustrate them:

1. When a prospect lands on a landing page, the message is tuned to where they are coming from (i.e. what campaign were they targeted with? what keyword did they click on?)

2. Once they have entered their information into your online capture form, you have additional knowledge of who they are (i.e. role, organization size, geography, etc.).

3. With this additional information, contextual content can be presented, engaging the prospect to learn more and to be better informed, ideally accelerating the sales cycle once the sales person speaks to them. For example, a person that self-identifies themselves as working for a manufacturing company, will be presented with a manufacturing specific case study.

Spider Webs are nothing more than a concept of mine but I feel strongly that success comes to those who innovate [and work bloody hard]. My IQ team still needs to refine how we implement and test the Spider Web concept, but the bottom-line goal is increasing the efficiency of our marketing campaigns. Test data will quickly identify whether it is a worthwhile concept or not.

Google - the amazing perpetual revenue engine

2008-01-05T22:05:00.000-08:00

Google is truly an amazing revenue generator. In the last six months, our PPC advertising costs on select key-words have risen almost 300%. So, in order for a specific key-word to show on the first page of search results in positions 3 - 10 we are now paying $3.50 per click versus ~$1.20 in July 2007.

The cost increase can be attributed to Google's AdWord tools that prompt advertisers to optimize their campaigns and increase their positioning. Typically, all this means is that you need to increase your per word spend. Each time an advertiser optimizes their campaign, all other advertisers in the category suddenly need to re-optimize theirs. To add insult to injury, the optimized results are typically broad matches with inefficient campaign structures. A bit of a vicious and expensive cycle.

From a business standpoint, the efficacy and cost-effectiveness of Google AdWords is starting to go down. Given Google's higher CPC we have begun to shift advertising $$$ to other vendors and other mediums. While there are oversight and reporting costs of managing campaigns across multiple engines and mediums, financially it makes sense. Over time, I would expect a similar reaction from other advertisers. There is no such thing as a perpetual motion engine and given the alternatives, I don't expect Google to become a perpetual revenue engine either.

SaaS - One Size Does Not Fit All

2007-12-20T20:00:00.000-08:00

While getting my MBA from Kellogg, I co-founded a supply-chain and logistics software company (Celarix) that delivered the "software" as a web-based service. We launch the company in 1998, and we were one of the first in our space to offer a solution as a hosted application. When setting the strategy and defining the delivery model, I didn't realize the buzz around SaaS that would come a decade later. At the time, the unique approach made strategic sense, provided a compelling model to customers and resulted in the company being acquired around four years later.
For Celarix, SaaS was the best and only viable delivery model. In a nutshell, the service provided visibility to global supply-chain activities by integrating with hundreds of the world's leading logistics providers. Given the effort required for each integration, it would have been very difficult for any customer to replicate the network that we could develop. By offering the solution via SaaS, we were able to provide software + valuable logistics data.

Today, I see a lot of hype around SaaS but not a lot of business models that provide value beyond just the backend IT blocking and tackling. While there are benefits to SaaS, there are also issues and it is not as a one-size-fits-all option however.
SaaS Benefits
1. Somebody else takes care of the technical "plumbing"
2. Barriers to switching are low
3. Costs can be spread over a longer period of time
4. Time to value can be accelerated

Saas Issues

1. Everybody is up or everybody is down
2. Everybody must run the same software version
3. All change management is on the vendor's schedule
4. SLA's are still scarce - (even Salesforce.com, the poster child for SaaS doesn't offer them)
5. More expensive over the long-term
6. Corporate governance takes a back-seat [i.e. backup, disaster recovery, archiving, SOX compliance, etc.] are mostly outside your control
7. Capabilities for integration into legacy systems is still not widespread
8. Vendor "sustainability" and access to the application is not guaranteed (i.e. with installed SW, if the vendor goes out of business, you still have the SW to run. With SaaS, you have limited recourse)

For some, SaaS is a great options, while for others, on-site deployment is a better alternative. The dogmatic industry drum-beat that SaaS is the best solution for everybody is downright wrong.

IQ Website Launch - Results Exceed Expectations

2007-11-16T16:01:00.001-08:00

About 6 months ago I hired a Marketing Production team in Bangalore (see June 1 2007 posting) to do website development, collateral creation, SEO, SEM, online advertising, etc. Their first main project was to develop a new "customer network" concept for IQ; very Web 2.0 and extremely promising. The team delivered the prototype with flying colors and the "project" is expected to be launched in 2008. Their next initiative has been the redesign of the IQ website as well as a completely new collateral package that includes new product positioning, customer case studies, Podcasts, recorded demos and more.

For a number of business and schedule reasons, the website launch has been split into 3 phases:

Phase 1 - Re platform the website so that marketing can make content changes without engineering input. This will accelerate content creation and increase efficiency / cut costs. We are migrating the aspx website to a CMS system (Joomla) with integrations to SugarCRM. Other items in scope include additional content, more detailed analytics and significantly more targeted landing pages (squeeze pages).

Phase 2 - Redesign the homepage and include new events, Call-To-Action options, PR and product information. This will coincide with the 3.0 launch of an IQ product in Q2 2008.

Phase 3 - Update the website to support on-going marketing activities.

Phase 1 has been completed and we launched on Nov 1st; the first two weeks of metrics have exceeded my expectations. When comparing the old site to the new site for the same period in the current and prior months (Oct 1 - 15 vs. Nov 1 -15) the results are very encouraging:

Avg Time on Site +199.95% (good)
Bounce Rate -13.89% (good)
Average Page Views: +31.04% (good)
Goals (new leads) +42.86% (good)
Absolutely unique new visitors -32.66% (not so good)

At first glance it is a negative that our number of absolutely unique new visitors has dropped by 32%. While I never want to see a drop in visitors, it is actually a good thing. When we launched the new site, I initiated an online advertising review that ended-up reducing the number of words that we are paying for - essentially cutting out the lower performing "garbage" words but paying more for the high-value words. The 32% reduction in visitors is a result of this......and so is the 42.86% increase in conversions. All in all a good trade off.

Marketing Organization Structure 2.0

2007-10-10T12:59:00.000-07:00

For the last decade or so I have successfully used the same marketing organization structure. With all the changes going on in marketing (e.g. new mediums, metrics driven evaluation, etc.) and the internationalization of my team, I've decided to spend some time analyzing and validating the structure.

I organize based on the following work breakdown structure:

Corporate / Group Marketing:

Strategy
Positioning
Branding
Website [including SEO]
Metrics & Analytics
Tools

Marcom / Communications:

Public Relations
Analyst Relations
Online Exposure / Digital Outreach [this is a new responsibility and includes coordinating online feedback, blogging, message boards postings, viral exposure, directories etc.]

Field Marketing:

Lead Generation Campaigns
Advertising (online & offline)
Marketing Campaigns (nurturing and upsell)
Sales Team Support
Events

Product Marketing:*

Product Positioning
Collateral Development [brochures, cutsheets, whitepapers, case studies, etc.]
Sales Tools Development [ROI calculators, positioning sheets, presentations, etc.]
Competitive Monitoring & G2

Product Management:*

Product Roadmap
Business Case Development
Requirements Gathering
Solution Validation
Sales Expertise

* (Note: Product Marketing and Product Management responsibilities can often blur. Depending on the organization and resource capabilities, Product Management can shift from marketing into engineering or its own stand-alone group. With IQ, the Product Roadmap, Requirements Gathering and Solution Validation lie in either the engineering team or marketing team depending on the product and resources.)

So, I started out this posting to validate if my tested Marketing Structure has held-up, and it has. There are a couple of newer responsibilities in PR (online based), and Field Marketing has additional mediums (e.g. SEM) that are evolving very quickly, but all-in-all the structure works. Also, depending on the company size, these activities and responsibilities can either be assigned to individuals, or in larger organizations, spread across different teams. Does this structure apply to all organizations and industries? Nope -one size does not fit all- but it does work well for on-premise Software companies, SaaS providers and online information based services. I am sure that at some point I will evolve and change the structure, just not yet.

The Grass Is Pretty Green ....

2007-09-02T23:23:00.000-07:00

I recently helped a "Green" manufacturing company launch their website. It sure was fun to deal with marketing issues outside of the technology industry for a while.

Let me give some background here - his company is about a $20m manufacturer of on-site chemical generation machinery that has no full-time marketing staff, no full-time IT staff and a budget for marketing slightly more than zero. They had a website that was done about 3 years ago and had not been updated since then - it showed. Without a CRM tool, website lead capture, analytics, outbound marketing campaigns or advertising programs (they do some trade shows) it is an absolute testament to their product and sales abilities that they have gotten to the revenues that they have.

They recently won a number of major deals and had gotten a lot of interest in their products. The management team felt that the time had come to build-out their web-presence and marketing programs. That's where I come into the picture - as the "brother that runs marketing for a SW company" I was asked to help-out and provide guidance.

I agreed to coordinate the activities and took the project on as a "consulting hobby". In under 2 months (part-time) we accomplished:

Selecting the Content Management System (Joomla)
Contracting a joomla engineer to do the development
Coordinating flash and graphics work with a freelance designer
Selecting their new hosting site
Managing the process
Editing the content
Implementing an online advertising program (Google AdWords)
Implementing the analytics package (Google Analytics)
Selecting the CRM package for web-to-lead capture (Appitas CRM - http://www.appitas.com/)
Successfully launched the site

While it is always fun to get into the trenches (it helps me to better understand some of the tasks that my team does) the greatest reward is seeing the results.

Since launching the new site (with a rebranded domain name), a limited advertising budget and some guerrilla marketing, the traffic has gone from 10 users per day to hundreds per day [yes not a huge number but remember the segment and budget] with global visitors and leads being captured in their CRM system. They now have a platform for expanding their marketing activities with tracking and analysis.

Pretty cool to be able to help-out and see the results so quickly.

A Marketing Geek's Fantasy - the be all, do all Marketing Engine

2007-08-18T13:19:00.000-07:00

Do a search on Google for "marketing software" and you will get about 385,000,000 results; "marketing saas" gets over 2,000,000. With all these results, I still can't find my ideal "Marketing Engine". Let me explain this be-all-does-all "application": put simply, it is an application that ties all of my team's strategic and tactical marketing information together in one place, across products, projects and processes. The underlying value proposition is that it can help repeatably drive our marketing activities from start to finish with lower costs and higher success rates.

The requirements list isn't that long or difficult to deliver on:

the engine must support the sequential steps of marketing strategy creation through tactical execution: Plan > Segment > Revise Plan > Create > Execute > Measure > Improve > Plan
it should be possible to manage individual segments, mediums and product lines - or roll them up for consolidated management
Processes (planning, budgeting, SEO, lead scoring, etc.) and Projects (product launches, events, individual campaigns, etc.) must both be supported
real-time with reporting, dashboards and decision support from 50,000 feet down to ground level
a pro-active recommendation and optimization capability that can statistically evaluate all campaigns, segments and outcomes to provide the optimal future spend structure with what-if decision making
Lead scoring before hand offs to sales
100% web based
able to integrate with CRM tools (gotta bring the sales team to the party)

It's not asking too much is it? As a consumer it would be Nirvana. As a marketing team responsible for defining and rolling it out, it would be pretty awesome as well. You could create some really interesting UI, logos, collateral and revenue generation campaigns ? As far as I know there is nothing out there that does what I want my Marketing Engine to do. Until one comes to market, I will have to make do with the five or six stand-alone applications that I have come to rely on: IQ's project / process automation platform, planning spreadsheets, our CRM package (SugarCRM), website analytics reports, adword reports and finances budgeting reports. If anybody knows of something like the Marketing Engine that I have described, let me know - I would love to check it out.

Making Distributed Teams Work

2007-07-21T18:16:00.000-07:00

I recently read an article by Matt Asay of Alfresco about their highly virtual organization and some of the fundamentals that make them successful. It is hard to question his credibility in this area - Alfresco is doing a superb job strategically and tactically so something is working. They have defined their market (Enterprise Content Management), structured their business model (commercial open source) and are hitting it out of the park in a number of important metrics (downloads, customers, etc.) Still, I am a bit sceptical about the "all is rosy" picture that he paints.

http://weblog.infoworld.com/openresource/archives/2007/05/building_an_onl.html#comments

Here is why I am sceptical. At IQ, our marketing team is split between Massachusetts, USA and Bangalore, India. I have experienced the cost benefits of offshore teams, but I have also had to overcome the downsides of virtual teams. There are a few main obstacles to making teams work: (1) team cohesion, (2) communication friction, and (3) specialized knowledge. Let's explore them:

(1) team cohesion - I believe that communication is a cornerstone of effective teams. When you are spread across the country or around the world, communication is very difficult. It is a challenge to build effective teams when they can only communicate for two or three hours each day via conference call or IM. On-site visits and get-together certainly help but can never really replace hallway conversations.

(2) communication friction - anytime that you have virtual teams, you will inevitably have communication friction. Just being in different timezones and needing to schedule calls around different team's schedules introduces friction. I typically have calls to my virtual team from 7:30am - 10:00am every day. It works, but I would definitely prefer to have them down the hall for ad hoc discussions.

(3) specialized knowledge - where specific market knowledge or market activities are required in a geographic area, virtual teams do not work. My team in India is focused on marketing production (e.g. website creation and management, Flash development, collateral creation, SEO) and campaign execution (e.g. direct mail, SEM, online advertising). Market specific activities such as collateral creation, webinars, etc. require specialized knowledge and have to be done by local (USA based) team members.

Virtual teams can work, but they come with a cost.

Off-shore marketing production - a new twist

2007-06-01T13:21:00.001-07:00

I recently formed a "Marketing Production" team in Bangalore that includes a marketing manager, web-developer and graphics specialist. There are a number of reasons for starting the team but the main one is budget. Essentially this team is an alternative to a marketing agency but at a fraction of the cost.

The team in India is responsibile for web-site development, collateral creation, SEO, online advertising / SEM, Flash production, campaign execution and CRM administration. Activities like strategic planning, content creation, customer interations, event execution and PR will remain in the US.

While off-shore marketing and off-shore development are clearly different, I expect that the 5+ years of experience I have gained working with off-shore development teams will pay dividents. I feel that there will be a couple of critical success factors: diligent hiring, constant communication, well defined processes and clear objectives. Right now I have all of them in place.

It will be interesting to see if the issues of location, time-zone and a lack of industry expertise can be overcome. I am confident that they can. Time will tell.

Competence Party

2007-05-08T10:24:00.000-07:00

Over the last few years I have enjoyed reading Bob Lewis' weekly article "IS Survivor". His advice and thoughts may be focused on IT, but they apply just as well to pretty much any other function. This week his article deals with competency and accountability. Some highlights of his tongue-in-cheek Competency Party Platform:

"We will know what we want to accomplish, be clear in how we describe it, and know why it's a good idea.

We will concentrate our efforts on a small number of important goals, recognizing that if we try to accomplish everything we'll end up accomplishing nothing.

We will be realistic. We will choose courses of action only from among those possibilities predicated on all physical objects obeying the laws of physics, human nature not somehow changing for the better, and what has gone wrong in the past having something useful to teach us.

Our decisions will always begin by examining the evidence. And we will recognize that when our cherished principles collide with the evidence, the evidence wins. Every time.

With new evidence we will reconsider old decisions. Without it, we won't.

We will never mistake our personal experience for hard evidence. Personal experience is the evidence we know best. It's also a biased sample.

We will think first, plan next, and only then act. The only exception is a true emergency, where making any decision in the next two minutes is better than making the right decision sometime in the next several days.

We will never mistake hope for a plan. A plan describes what everyone has to do, in what order, to achieve a goal. Vague intentions and platitudes don't.

We will sweat the details. Vague intentions and platitudes don't have any, which is why those who stop with them always fail.

We will put the most qualified person we can find in every position. We'll find some other way to reward high-dollar campaign contributors. Also, if we find someone is not able to succeed at what we've asked them to do, we'll replace them with someone who is.

We will never blame anything on the law of unintended consequences. Our job is to foresee consequences, which we can usually do if we think things through. "

Bob makes some very good points to manage by. A couple of additional ones that could be included:

We will implement repeatable processes and constantly improve them. Business success and scale depends on process success.

We will measure our progress and improve accordingly. Metrics and measurements let you know how you are performing and react accordingly.

Coming Full Circle Back To Custom Applications

2007-04-29T06:22:00.000-07:00

As with all technology cycles, we are in for a reversal. The trend of buying packaged applications has been very strong for the last decade +, but is about to change directions. I predict (yes you can quote me) that over the next 24 months (possibly 36 months) we will see a new shift towards enterprise application development.

There are a few forces driving this shift:

Labor is less expensive - with off-shore development there are large groups of developers that are available to do application coding at a low cost (no duh comments on this one - I realize that off-shore development has been going on for quite some time).
The core functionality stack is already in-place - in most organizations, the large functional components (ERP, SCM, MRO, CRM, etc.) already exist. Still the complex differentiation requirements of modern businesses are not met by these packages. There is a need to extend and expand functionality to pull ahead of the pack.
80% foundations exist already - this final factor is probably the most important. In the past, companies had to build complete solutions from scratch. Today they have a major advantage. With open source solutions available in almost every category, and with the components (web server, reporting, database, etc.) available for free, significant portions of solutions already exist pre-built. Customizing the functionality (which is never trivial) is all that remains.

So, if you are an in IT or are a corporate business user rejoice and celebrate the new opportunities......maybe; there is a reason that SAP, Oracle and the others seemed so inviting that you were willing to pay millions.

Off Shore Development - Shoe-horning a SWOT Analysis

2007-04-27T13:28:00.000-07:00

A friend of mine has recently been considering off-shoring a portion of his development organization, this post is a synopsis of my thoughts and experience....

Off-shore development has been going of for more than a couple decades. When I started with Accenture (then Andersen Consulting) in 1994, engineers in the Philippines were being employed to do off-shore development - simply missing the ubiquitous moniker. Only with India's tremendous growth in this area and the exposure of outsourcing in Friedland's book "The World Is Flat", has off-shore development truly started to be universally discussed.

Despite all the hype, observations by media pundits and the reality of off-shore development don't really jive. India will not take all US IT jobs, China will not replace India as the preferred destination (in the Short Term) and the cost savings won't last all that much longer. Having managed a 40 person on-shore / off-shore product development and marketing organization (based in Bangalore, India) for the last three years, I have come to understand some of the capabilities and drawbacks of this development model along with some ability to cut through the hype.

Off-shore Model - Various Editions
A brief synopsis of 3 different models that can be used to analyze the various development structures.

Wholly Owned Subsidiary- The off-shore development organization is owned by the parent company and all 'workers' are employees. This structure is typically used by Multi-nationals that have the ability to staff a large organization, deploy the required processes, invest in the necessary tools and have a low enough overhead:delivery ratio to make it cost effective. Microsoft, Google, SAIC, IBM, EDS, etc. have successfully deployed this model.
3rd Party Development Organization - The off-shore development organization is owned by a third-party organization and all the 'workers' are employees of the third-party organization. Typically the 3rd party will be responsible for the processes, tools, staffing and delivery. Tata, Infosys and Wipro are the pioneers of this model and are constantly evolving to be more like traditional consulting organizations rather than just low cost development organizations.
Body Shop - At the most basic form, Body Shop organizations provide workers and space without the management and oversite. Process development, tools, etc are left up to the customer. Body Shopping will not be addressed in this posting since I don't believe it is a particularly effective method of off-shoring compared to the other two models.

Model Analysis

Analyzing business models is always subjective and difficult to structure without some form of a framework. While not ideal, I am "shoe-horning" a SWOT Analysis since it is close enough and better than any alternatives that I considered.

Model 1 : Wholly Owned Subsidiary

Strengths

Direct control over all aspects of development and delivery
Your costs do not include their Margin
As employees, you are able to provide unique incentives (e.g. options) and perks (e.g. rotation programs)
Overhead costs associated with managing their manages do not exist

Weaknesses

Your costs include your overhead expenses - unless you are a multi-national you will never have the same overhead:delivery ratio that a large outsource company will have
All HR initiatives are yours and your HR department must be prepared to support the local initiatives and regulations.
Engineers want career paths (especially in India) with specific milestones. Your organization must be large enough to support growth and their career paths.
It is easier for "Name Brand" companies to hire top talent - if you don't have the brand, the Tata's, IBM's and Accenture's of the world will have a foot-up in recruiting.
You are responsible for developing your processes and making sure that they work.

Opportunities

Your off-shore management team must be integrated into your local management team. I have been fortunate to work with an exceptional country manager. It makes all the difference.
While cost savings are going away, there is still a pretty significant value proposition. As of April 2007, the loaded cost per employee, per year is approximately $17,000. This is for a 100 person development organization and includes HR, Operations, Finance, Management and IT resources in the total number. Additional costs such as

Threats

Costs are rising rapidly - this is especially true in Bangalore and other Tier 1 cities. When compared to the US: Salaries are lower, Telecommunications is higher, HW is equivalent or higher, SW is equivalent, Power is higher, Space is equivalent in Tier 1 cities though lower elsewhere, Admin Overhead is lower.
Attrition is a significant factor when working in India.

Model 2 : 3rd Party Development Organization

Strengths

You do not need to "deal" with all the legal, HR and regulatory issues of managing an off-shore subsidiary.
They can bring the processes, tools and best practices from day 1. This should not be overlooked.
If you go with a large organization, they can provide the career paths and incentives that staff in India require. However, you have less control over the types of incentives that you can provide to their employees.

Weaknesses

Your costs include their Margin.
Their processes are fairly rigid.
You have limited control over the resources that get added to your project.

Opportunities

If you don't have world-class development processes in place, working with a CMMI-5 company is a good way to develop them.
The Golden Rule applies. If you are a SME, you will always be a second tier customer - focus and priority goes to the customers that generate millions of $ in biling revenues.

Threats

If product development / IT delivery is a core compency to your company, by off-shoring you lost control.

Critical Success Factors

Your processes (or partner's processes) and associated tools must be rock solid.
Metrics for tracking project success must be in-place.
Your team must clearly segment activities and responsibilities between locations.
HR needs to be a tremendous focus - hiring, growing and retaining talent can make or break an off-shoring initiative.
Communication is critical
Communication is critical
One more time - communication is critical. Daily conference calls, online chat sessions, midnight Skype sessions and regular trips for in-person meetings are all absolutely critical to success.

Summary

Difficult for SMEs to do it themselves
Risk is compounded due to distance and time
Cost justification for India is going away
If your development processes are not solid you will have major issues.
There are some great resources in India - skills extension for your team can be a great reason in itself.

Library

http://www.solovatsoft.com/softwaremethodology.html : some good white papers though tilted towards their approach.

http://blogs.msdn.com/architectinsight/archive/2007/03/12/globalisation-clinic.aspx : a Microsoft blog that addresses a number of valid points.

Online Marketplaces ...Back To The Future

2007-03-22T13:25:00.000-07:00

InformationWeek has a very interesting article on Red Hat's move to having an online marketplace. This is consistent with the IQ strategy and certainly highlights that our approach and positioning are on the leading edge of the market. Other notable early movers include SugarCRM (SugarExchange), Joomla (Joomla Exchange) and Salesforce.com (AppExchange). Each of these companies have identified the value of leveraging their brands and user communities for growth - sort of like judo for nenw technology companies. I expect that we will see a lot more companies launching these types of initiatives. Having an Exchange is almost a requirement for Open Source companies but I also expect others such as Quickbase, Basecamp and even heavyweights like SAP to enter the fray.

Red Hat Talks Up Online Open Source Marketplace
Linux leader looks to certify the growing number of open source programs for its operating system and middleware platform. http://www.informationweek.com/story/showArticle.jhtml?articleID=198001606

Developing an Exchange / Marketplace strategy is one thing, being able to fund, execute and deliver on that strategy is quite another (sounds very late 90s .bomb) . So, what are the critical success factors? I believe that there are at least 5 :

Strategic Positioning - how does the marketplace contribute to making customer's existing investments even more valuable? how will the "owner" company benefit from the Exchange? Salesforce, SugarCRM and F5 have all done great jobs of launching Exchanges that are complementary to their core products. From what I have seen of the Red Hat Marketplace, they are missing the mark. Their marketplace is a venue to purchase a limited number of products that you can purchase directly or download for free with an extra click or two. Without value to the end customer, I don't forsee much traction.
User Base -the larger the user and partner base, the higher the probability of success. It stands to reason that the more consumers there are, the more developers are inclined to spend time building solutions that they can profit from.
Community - I draw a distinction between User Base and Community since one does not imply the other. To be successful there needs to be a vibrant Community which can add new applications (free and for a fee), post answers to user questions and most importantly refer others to the product / service / marketplace.
Ease of Engagement - ease of engagement is probably the most important aspect of building a dynamic community and network. If it is difficult to "engage" - customers and partners won't. In a world of distractions and countless alternatives, engaging and captivating customers and partners is critical. From sign-up through documentation to online chat and user forums, engaging customers and partners is the critical challenge.

Will there be a first mover advantage? Will established players such as Microsoft, SAP and Google enter the market and provide superior alternatives? We are in the early stages of an exciting time - traditional software, open source software and SaaS business models are colliding, business models are evolving and revolutionary new players are entering the marketplace (lousy pun...couldn't be avoided). I look forward to seeing how the first crop of Exchanges 2.0 take-off and evovle.

Why managers need leadership and leaders need management in indivisible, mutual partnership

2007-03-21T06:39:00.000-07:00

I am a big fan of Robert Heller and Edward de Bono - two management, strategy and leadership "wonks". The following article is thought provoking. My comments are in Yellow.

From Robert Heller: The Leading Manager
The sovereign truth about leadership and management is that the key to success lies in choice [and the ability to play to your natural strengths]. Choose an an activity which is not the most apt for your talents - innate or acquired - and you will fail, either relatively or absolutely. By the same token, so will all those unfortunates who work under your leadership. For that is where leadership and management join hands. Both depend on the ability to persuade others to deploy their own talents and know-how to achieve the goals of the organisation. Good managers have long known that failure, properly studied and exploited, can lead to exceptional success. Indeed, trial and error - one of the major engines of progress - very obviously embodies failure, as a possibility and an experience. But that perception is hard to build into a systematic, scientific programme that can be taught and replicated. Defects of personality mean that leader/managers often find human relations extremely difficult to manage. Nothing is more basic to effective leadership than the ability to relate tellingly to others, from one's close colleagues to the most distant new employee. [I wholeheartedly agree - communication and dialog, (scheduled or informal) is so important. When teams are virtual and separated by timezones and cultures, it becomes even more so.] Yet I've dealt with leaders who fail the most elementary human tests - like one individual who told me that he didn't know how to say thank you, that most useful of all verbal pairings. But he was still a great success. Had he been a better communicator and man manager, though, he might well have been more successful still.

The great leader needs to judge his or her performance more rigorously than anybody else. Try the following eight questions on yourself:
* Leadership: do I lead effectively myself and enable others to lead just as effectively in their spheres?
* Challenge: do I continuously scan myself, my colleagues and the organisation to identify and exploit areas of significant potential improvement?
* Decisiveness: do issues get identified speedily and resolved as fast as possible and with due diligence?
* Actions: do decisions get converted into deeds and feedback with no undue delay?
* Communication: does everybody know what I am doing and why - and do I know the same about them?
* Change: have I created a climate in which everybody welcomes change and knows how to implement it?
* Basics: have I identified the key success factors and do I know for certain that they are working well?
* Objectives: have we formed high and potentially rewarding ambitions that govern all our work?
* Credibility: do I have the credibility by leading from the front and setting an example that others value and want to emulate?

Never forget that nothing stands still. The revision of strategy and tactics is a most powerful tool for positive change. At the same time, its neglect spells disastrous performance; whether you call it bad management or bad leadership hardly matters.