Influence of SaaS on SAP Pricing
Today SAP announced “flexible pricing”, allowing customers to effective pay for SAP software in a similar fashion as subscription style or SaaS pricing models. The rational presented was the current economic climate, however, I cannot believe this is the only factor. The pressure of SaaS vendors on the “traditional software” providers pricing and implementation models has to also be a contributor. Of course with SAP “SaaS” pricing the customers still need to buy hardware, support the Oracle databases and infrastructure, but also have the ability to customize.
Other companies I have seen have offered “SaaS” products in their marketing that turn out to be simply SaaS pricing, with traditional behind the firewall software.
Do these tactics increase customers and market share? It does offer more choices which is always good.
Positioning Consistency
Creating strong positioning takes effort and is fundamental to your marketing. Once the positioning is created then the next challenge is to deliver it consistently via the various communications channels (web site, PowerPoints, blogs, etc.) In general the consistency across these vehicles tends to decline over time.
So how consistent is your positioning. Please take the poll. I will publish later with any conclusions.
No Software – Makes Great Positioning?
Salesforce.com is the enterprise cloud-computing company.
Salesforce.com is one of the best marketing technology companies on the planet. Why?
1) They use simple but compelling messaging
2) They make grand statements
3) They back up what they say
4) They re-enforce their message with consistency
Go to their home page and their messaging is quite simple, “The leader in customer relationship management (CRM) & cloud computing”. On their company page the simply state, “the elevator pitch…” (captured above). They back up what they say with facts such as 63, 200 customers, 1000+ appplications on the app exchange. They are now reaching way beyond their SaaS CRM roots taking claim in being THE clound computing company. this really represents a fundamental transformation. Will they succeeed?
i2 or Me Too
Now that the i2/JDA merger is back on it reminded me of the “glory days” of i2 and their thought leadership and visionary marketing. In fact a year ago when they were first going to merge I wrote a story on how i2 was a great marketing company.
Now I look at their web site and it seems so boring. No differentiation. Let’s take a look at their primary message on their home page:
As a full-service supply chain company, we help clients in the manufacturing, transportation, and retail sectors achieve world-class business results
How many software companies can fit into that category? When coming up with such a positioning statement (see my earlier post on positioning) you really need to capture what you do, the value you provide, and your differentiation. When I say the value you provide “achieving world-class business results” is a little too vague.
Hmm…maybe the positioning is not on the home page. Are there nuggets elsewhere? Here is another statement that appears in a few places:
For more than 20 years, i2 software and services have helped companies optimize key business processes for maximum profitability
Got it. i2 is now me too. Luckily there are some new players who have taken the lead in excellent marketing, positioning, and messaging. I will look at the better examples over the next few weeks. What are your best examples?
Great Quotes …
From colleagues I respect, some serious, some humorous:
“This place would be a lot easier to run if it weren’t for the customers and employees”
- CEO
“Wow..we can’t even shoot ourselves in the foot properly”
- Product Manager
Engineer: “The project is too ambitious. You are asking us to fit 20 lbs of shit into a 10 lb bag”
CEO: “Dehydrate the shit”
“Before we do that, let’s make sure we can do this once in a row”
- CEO
“The best deodorant is money”
- engineer
“There are two problems in companies: sales and everything else”
- VP of Engineering
“Marketing is common sense”
VP of Marketing
What are some of the great quotes you have heard?
Death of Legacy High Tech Boom?
Dell Buys Perot, Oracle Buys Sun, HP Buys EDS…what’s going on? What happened to stick to your core competency?
OK ,when you are growing at 30-50% it is easy to say stick to core competency. Hardware companies should be hardware companies, and software companies should be software companies, system integrators should be system integrators. Well now at 5-10% growth it is mature market growth, time to go after someone else’s market.
Is this another sign that “traditional high tech” is growing up?
In the boom days of the nineties there were 3 seperate pillars driving enterprise applications: hardware (HP, Sun, IBM, Dell), software (Oracle, SAP, Peoplesoft, Baan, etc.) and integrators. IBM led the way showing how an in house consulting shop can drive revenue through boom and somewhat succesfully – busts. Others above have followed.
Where does this leave SAP? Do they need a hardware partner? SI? Does IBM need more enterprise applications? What’s next mixing in the network providers?
Are You Bilingual?
OK. So when I grew up in Montreal, being bilingual meant you needed to speak english and french. So what’s that got to do with marketing and messaging? Quite simply one of marketing’s jobs is to clearly engage customers and prospects, guide them to your value proposition, and deliver messages and tools to ensure they buy your product or service. In order to accomplish this in high tech you really need to speak multiple languages: Technical and Sales.
In my experience it is rare that you have people on your team who can effectively engage with engineering while simultaneously position, message, and embrace sales to win customers. To do this effectively they need to be “bilingual”
So how do you assess candidates on their ability in these two dimensions? I always like it when people can boil things down to a simple concept (another good marketing trait). One time when I was interviewed as a product manager the interviewer said, “OK you go to a company party. Sales is on one side of the room, engineering is on the other side. Which group do instinctly go hang out with?” This was an excellent question.
Another time I was looking to get product marketing training for my product management team. I explained why I needed it to a colleague, and he said,” OK, you have great guys who know how to build product, you need to teach them how to sell it.”
Another dimension is can you talk to the executives and the worker bees? Heavy Hitter has some good quotes on on exectutives expect.
Are you bilingual? Hang with sales or engineering? Prefer to build it or sell it? Talk to c level or b level?
Messaging – Black and White
The world is full of grey. One of marketing’s job is to create messaging that makes it black and white: clear value proposition. This is much harder said than done. How do you know is your messaging is clear, or better said “black and white”? You need to ensure that you have consisent messages across the various communications tools to use to reach customers (web sites, press releases & coverage, sales reps, etc.)
Here are the steps you can use to assess your black and white messaging score:
1) Do you have a positioning statement and supporting messages written down? Minimally you should have a set (3 to 5) of messages for your corporate brand as well as a set for each product. My experience is many companies are product or corporate focused and do not have both. 10 points if you have corporate messaging written down, 10 points for product.
2) Ask a sampling of your sales reps for the slides they use during a sales call. Review the messaging across the samples. Give yourself 15 points is the messaging is perfectly consistent.
3) Review your web site – is your corporate and product messaging consistent with your positioning? How does your home page align with the “About…” page, how do your product pages support your messaging? Score yourself between 0-25.
4) Re-read the last 10 press releases and coverage. If your core messaging comes through give yourself 2 points for each article or release in which this is true.
5) How does your collateral support your message? Case studies, product brochures, corporate overviews, etc. Perfect alignment scores 20.
Where do you stand?
BTW – This simply enables you to know your messaging consistent and clear, making it unique and effective as a whole other ballgame. This requires effective positionining. See recent post on competitive positioning on Write That Down.
Is Marketing Common Sense?
Someone I worked with and have a lot of respect for once said marketing is common sense. Of course another colleague has a great quote, “Common sense is the least common resource on the planet.”
The simple question and subsequent responses on LinkedIn are quite interesting.
Marketing & Business Success
Which enterprise software companies are the best marketing companies? Is this directly correlated to their business success?
Marketers tend to believe they are the most ”strategic” and “important” function within a company. After all we define the market, create the messages, build the product requirements. Without us engineering would not know what to build, sales would not know what to say.
How does one measure the effectiveness of marketing. Of course there are basic parameters such as leads, cost per leads, pipeline conversion, etc. But how do you measure brand awareness? A good brand is obviously the best attribute marketing can build. Successfully building your brand leads to preferential treatment when customers go to market to buy your solution.
Interestingly, I was looking at AMR’s The Global Enterprise Application Market Sizing Report and was surprised to the companies and their position, gievn my opinion of their marketing. Of course stack rank by revenue is not the best measure of success, since things like profit, growth rate also need to be incorporated. A few of my surprises
- Sage – Surprisingly #3 given their generally lower profile. I attribute this to both their success outside the US and conversely less visibility within US. Also given their focus on the mid market, it is a broader set of customers so harder to focus marketing dollars on. Alternatively NetSuite which is 5% their size certainly has their brand awareness within the US.
- Dassault – Again low profile. PTC has a higher profile with half the revenue
- Agresso – Who? OK I am showing some US centric ignorance
In my opinion best marketing company on the list is salesforce.com. The growth to #10 is impressive since they are probably 1/2 or 1/3 as old as almost every company ahead of them.
Of course marketing and brand building need to be integrated and aligned with the other functions within a company. Typically technology companies are oriented around a particular function most often either sales, marketing or engineering. In reality in today’s world a company has execute well in all areas. There is no room for error.
