Author Archive

The more prospects who choose to register their contact information with you the better. Someone who opts-in to your house list is demonstrating an interest in your message. Some may represent immediate sales opportunities. Others can be inexpensively nurtured over time using email until they purchase, opt-out or are disqualified as a prospect.

To build your house list you need to give your prospects a reason to share their contact information with you. Having a great product or special offer may not be a good enough incentive because many visitors will not be in purchasing mode when they first get to your web page. Most will be in learning mode. Keep that in mind when deciding what incentive to offer.

Here are the most common motivators that entice people to register their contact details on a web site:

    1. To request pricing or other information
    2. To access or download a white paper or article
    3. To see a product demonstration
    4. To attend a webinar (or to view a recording of one)
    5. To attend a telephone seminar (or to hear a recording of one)
    6. To read a research report
    7. To download an e-book
    8. To access a trial product
    9. To subscribe to an e-newsletter
    10. To subscribe to a print magazine
    11. To get special access to VIP benefits
    12. To participate in a forum
    13. To access technical support
    14. To access a peer network such as a user group
    15. To use an online tool or calculator
    16. To get a coupon or discount code
    17. To register for an event such as a trade show or seminar
    18. To receive notifications (e.g. product availability, new listings, etc)
    19. For a customized experience (e.g. to store preference data)
    20. To download an audio file (e.g. a telephone seminar, podcast, music)
    21. To enter a high-value sweepstakes
    22. To join an affiliate program
    23. To join a loyalty program (e.g. airline miles)
    24. To receive a gift
    25. To participate in a survey

Best practices doe choosing the right opt-in motivators

The best incentive for your business will depend on your unique situation. However, in general the following best practice rules apply:

  • Offer credible value-add information related to what the visitor is looking for. Your brochure does not qualify as an incentive to register.
  • The offer should be of value to a prospective customer, not to the general public. Remember you want sales prospects, not just a list of names.
  • Keep the title of your offer relevant to what you sell.
  • The offer should relate to a prospect’s purchase decision process.
  • If possible, provide immediate gratification once the form is completed.
  • Always tell the visitor what is in it for them.
  • Don’t ask for too much information. You can get more information later. At least ask for a full name, company name and an email address.
  • Build trust. Clearly state your privacy policy on the registration page. Tell the visitor what will happen when they register and assure them they can easily opt-out.
  • Keep it simple. The page must look and work simply. Don’t let the programmers over-complicate it.
  • Test different incentives and registration page designs.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

Almost every marketer uses email to keep in touch with prospects and customers. To do that they use a bulk email system so they can send the same message to many subscribers, track who gets what message, who opens the emails and who clicks on the enclosed links.

There are many bulk email applications. They can all send high volumes of personalized email, track open rates, track clicks as well as manage bounces and opt-out requests. So which one is best?

We looked at ten options. Nine were software-as-a-service (SaaS) and one was a software application you install on your own server. We included the ARP Reach software application because we were familiar with it. We used it for years. It’s a great package. However we found it challenging to maintain the server and frustrating to depend on an IT person’s availability. Therefore we wanted to see if a SaaS package could meet our criteria so we looked at Campaign Monitor, ConstantContact, ExactTarget, HubSpot, iContact, MailChimp, MailJet, Salesforce.com, and VerticalResponse.

By a process of elimination we ended up recommending iContact. Here’s our review.

Methodology

Our methodology was straightforward. We believe it was consistent with that of a marketer looking for a bulk email application.

We started with a list of email services that included the well known brands. We then added to the list by searching for lesser known providers. We reviewed each provider’s package as described on their website and, where possible, we telephoned the provider to get answers to specific questions. We eliminated many providers based on the answers to those questions. We tested those that were not immediately eliminated. Out tests primarily looked at email format, personalization of message, and ease of use. We did not test integration with a CRM application or 3rd party applications that may be required to make that possible.

Our review criteria included 5 assumptions and 5 comparison elements. We are experienced email marketers. Therefore some comparison elements were so critical to us we eliminated packages based on poor performance in those areas.

Assumptions

Email Volume: Our sales prospects are organizations, not consumers. We would only email people who opted in online (subscribed) or requested information by telephone or at a trade show. Therefore we would be sending emails to a “House List” that may reach tens-of-thousands, but not hundreds-of-thousands or millions. We’d likely send an email every 4 to 6 weeks to people who had not opted-out (unsubscribed.) We assumed we would have approximately 5,000 subscribers within the first year.

Disqualification: Salesforce.com’s Professional edition includes email campaigns but we disqualified it because it is restricted to 500 emails per day and because opt-outs had to be manually processed.

Email Type: We favor personalized sales letters, not generic newsletters. Therefore the arrays of fancy newsletter templates were not important to us. We wanted our emails to look just like an ordinary email one might get from Microsoft Outlook. Accordingly, the emails must appear to come from our web domain and replies must go directly to the sender. Additionally, the emails must not include the SaaS firms’ branding.

Email Sender: The list manager and the instigator of email campaigns would be a marketer, not a salesperson or IT person. Therefore, that person could learn how to use the email application, they could format a letter in HTML, but they were not expected to maintain a server.

Technical Support: We know that problems arise at the most inconvenient times. Therefore, we expect prompt telephone support.

Standard Features: We expect to monitor bounces, opens and clicks. We also expect the software to provide opt-in forms and to automatically manage opt-out requests. Almost all email applications offer these standard features. Some offer email forward tracking but this feature depends on the reader using a special button/link so we considered this nice to have, but not essential.

Comparison Elements

Ability to Contact: We assumed that a SaaS provider that could not be contacted by a prospective customer could not be reliably contacted by a customer with a problem. Therefore we disqualified SaaS providers if we could not find a phone number for them, if they failed to respond to our email/form inquiry, or if technical support was limited to forms and/or email.

Disqualifications: MailChimp, MailJet and ARP Reach were disqualified because we could not find a phone number and/or because support is by email only. We’d like to say they were immediately disqualified, but we did invest more time than we should have trying to get in touch. Campaign Monitor did call us, but their service was disqualified because technical support is by email only.

Salesforce.com Integration: We believe that every firm needs one definitive source of information about its prospects and customers. One well mainlined CRM system is critical to accurate reporting and therefore it’s critical to decision making. Reconciling multiple data sources is difficult, slow, and prone to errors. We chose the popular Salesforce.com as the reference CRM application, not because we expect salespeople to manage email campaigns, but because we wanted campaigns and responses to be visible to the team.

Integration with Salesforce.com was critical to our review. It did not matter which Salesforce.com package was required so long as a mail list could be pulled from Salesforce.com and bounces and unsubscribe information could be synchronized. In general, SaaS email packages that work with Salesforce.com require the Salesforce.com Campaign features so we used the Salesforce Professional edition as our benchmark. We did not consider Salesforce.com’s Pardot application because it’s in a different league to most bulk email applications and we thought it was prohibitively expensive in the context of this review.

In some cases additional software is required to integrate a SaaS email system with Salesforce.com. We were OK with that so long as integration between the three applications appeared to be reliable and the total cost was not completely out of line with other options.

Disqualifications: MailChimp reportedly integrates with Salesforce.com using Cazoomi. However, online reviews indicated that it did not work to the satisfaction of many users. MailJet reportedly integrates with PodBox, but the combined cost appeared uncompetitive.

ConstantContact was a finalist contender but online reviews indicated that integration with Salesforce.com did not work to the satisfaction of many users. iContact did much better in the integration reviews.

Price: There were differences in subscription rates and how SaaS providers calculated their fees. We were not particularly price sensitive because it was more important to have the features we wanted and because in the overall perspective of a marketing budget, email is not a big item. We anticipated a budget of $1000 to $1500 for the first year.

Disqualifications: MailJet, ExactTarget and HubSpot were disqualified because the pricing appeared uncompetitive with other options. These applications have valuable features, but we did not need all of them.

Piggyback Branding: Most SaaS email packages automatically include their own branding at the end of their customer’s emails. That piggybacking should be unacceptable to a professional marketer that’s paying to use their service. However, upon request most SaaS providers can change the settings to eliminate this piggybacking.

Disqualification: VerticalResponse said they could not exclude their branding from their customers’ email campaigns.

Deliverability: Almost all the SaaS providers promise a deliverability rate around 98%. That’s a great number because 100% is not realistic. Every campaign can expect some undeliverable bounces because subscribers leave, email addresses change. However, the SaaS marketers don’t commit to 98% deliverability to recipient inboxes. Our tests showed that until the sender was white-listed, emails were flagged as SPAM and were delivered to the junk mail folder.

One SaaS salesperson acknowledged our complaint but promised that inbox deliverability would be considerably higher for paying customers because their emails are sent from different servers. Apparently, the free trial customers are assigned to servers that have already been flagged by SPAM mitigation applications. And to be fair, many free trial users may send email that looks like SPAM.

Disqualifications: We could have disqualified all the SaaS applications that we tested. We didn’t disqualify any service because our test was limited to free trial accounts and we emailed our own addresses. It was not possible to conduct a more comprehensive test.

Conclusion

Marketingsage-Recommended-RibbonAfter weeks of reviewing the many bulk email options we ended up with three finalists: iContact, ConstantContact and ARP Reach. We decided to recommend iContact because ConstantContact and ARP Reach had some undesirable traits.

ConstantContact customers did not rate Salesforce.com integration very highly. At the time ConstantContact had an average 2 star rating from 17 reviews. Additionally, ConstantContact did not accommodate personalized subject lines. iContact had an average 4.5 star rating from 160 reviews.

ARP Reach is a great application and because it’s software, you buy it once and email as many subscribers as you like. However, we passed on it this time around because of the difficulties associated with server maintenance. Additionally, they did not respond to an emailed question about Salesforce.com integration.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

CloudBeat 2013 Review: A showcase for cloud success, software defined storage and encryption key management

Posted: September 17, 2013 by David Lamont in Opinion, Reviews, Security, Uncategorized
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Now in its third year, VentureBeat’s CloudBeat September conference in San Francisco consists of discussions, case studies, breakout sessions, and announcements reflecting the growing maturity of the cloud. From what I could tell (from the profiles displayed by the innovative Bizzabo iPhone app. that facilitates networking at the event), the 100+ audience at CloudBeat consisted of entrepreneurs, investors, CEOs and CTOs, as well as business development, sales and marketing VPs/directors.

This conference has an unusual and interesting format that consists of on-stage interviews. Unlike most conferences, the speakers do not present the corporate slide deck. They are interviewed on stage by a knowledgeable host, they answer questions and tell related stories. For example, Ilya Fushman, Dropbox’s head of products for business and mobile, talked with analyst, Paul Miller, about going beyond storage for 10 million users and 2 million businesses to become a platform for application developers.

Audience

The lineup of speakers was impressive. CloudBeat attracted 85+ knowledgeable C-level speakers from established players, start-ups, cloud users and investors:

3Scale, Accel Partners, Adobe, Alchemist Accelerator, AppDynamics, Artisan Infrastructure, AT&T, Axxess Unlimited, Bessemer Venture Partners, Box, Braintree, Canvas, Cisco’s Collaboration Technology Group, CITEworld, Citrix Systems, Cloud Foundry, Cloudability, Cloudant, CloudImmunity, CloudPassage, CloudPulse Strategies, Cloudscaling, Dark Matter Labs, Data Collective Venture Capital, Define the Cloud, Dell, Disney, Diversity Limited, Dropbox, Edmunds.com, Egnyte, Elance, Emergence Capital Partners, Engine Yard, Epignosis, Eucalyptus Systems, Firebase, Foley & Lardner LLP, GGV Capital, GlobalLogic, Harshman Phillips & Company, Hillenby, HP, IBM, Industry commentator, consultant & investor, Internet2, Issac RothShasta Ventures, Jive, Joyent, LED Source, LinkedIn, Metamarkets, Microsoft, MuleSoft, Nebula, Netflix, Norwest Venture Partners, Numecent, Okta, Optimizely, Parallels, Parsons, PayPal, Pivotal, ProgrammableWeb, Red Hat, Relevance, Room Key, Salesforce, Sanmina, SAP Ventures, Scale Venture Partners, Scribe Software, SendGrid, Inc., Silicon Valley Bank, Simple Signal, SimTable, SoftLayer, Spoke Software, SwiftStack, Symantec, Totango, Twilio, Vidyo, Wanelo, Xero, and Xerox PARC.

The event sponsors had tabletop displays outside the main room. I’m not sure the cloud-related vendors expected to generate many sales leads from this event. In at least one case, the vendor was there because it was a local event and one of their marquee customers was a speaker. Having a name-brand customer talk about how they use your cloud product is a good enough reason for a local upstart-up to sign up, especially when the interviews are recorded.

IMG_2556

CloudBeat 2013 Sponsors

Interesting storage and security vendors included KeyNexus, Scality, and SwiftStack.

Scality and SwiftStack provide highly-scalable, software defined, storage solutions to larger organizations. These are object storage systems based on the OpenStack framework. The software takes advantage of commodity servers and hard drives. Rather than use a SAN or NAS for storage these systems pool the storage in each server and make it available in the cloud. Unlike NAS and SAN, the number of processors and network controllers scales alongside the storage allowing the system to support a very high volume of concurrent users. The software then centrally manages data protection (replication) and performance (caching using server-based RAM or Flash). Cool stuff!

KeyNexus launched their cloud-based encryption-key storage and management solution for Amazon Web Services (AWS EC2) at CloudBeat. KeyNexus enables organizations to store, manage, and audit their encryption keys separately from the cloud, addressing the principal inhibitor to broader, faster, adoption of the cloud by enterprises — security!  Here’s how they describe it.

There are three typical cloud security scenarios. First, the key to unlock encrypted data is stored in the same cloud as the data. That’s like locking your house but leaving the key in the lock. In the second scenario, companies employ vendor solutions that host the key in an undisclosed location. That’s like having to call a security guard to access your home and unlock the door (and trusting the security guard never goes in when you are away). Option three involves securing the key on-site within the enterprise, which can be costly. The KeyNexus approach separates the “lock” from the “key” in the cloud, while also promoting encryption interoperability across the public cloud. Using a hardware appliance to create the keys, KeyNexus simplifies the management of remote key rotation as well as the migration of encrypted data between various cloud, SaaS and mobile platforms.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

 

The VMworld 2013 expo was all about storage, cloud (storage) and securing the data (on the storage). I wouldn’t be surprised if a trade show analyst declared this to be the enterprise storage event of the year and a preferred alternative to Storage Networking World (SNW). I’ll expect the same next year because the vendors I spoke with told me it was a good event for them. They said they met more end-users this year and most have exhibited for many years.

All in all it was a great event, but by the time I hit the expo the booth babes were looking a little rough.

Apocalypse

WD says “Apocalypse Never” but they were clearly wrong. This event had more than it’s share of zombies thanks to Bluelock, Sandbox and one other vendor (who deserves credit…help!).

I checked in with the storage-related vendors: Aberdeen, Asigra, Avere, Bluelock, Cloudbyte, Cloudfounders, Codefourtytwo, Commvault, Coraid, Dell, EMC, FalconStor, Fusion-io, Greenbytes, HDS, HP, Maginatics, Maxta, Micron, Nasuni, NetApp, Neverfail, Nexsan, Nexenta, Nimbus Data, Nutanix, Permixdata, Pure Storage, Qnap, Quantum, Racemi, Scality, Simplivity, sTec, Synology, Tegile, Tintri, Violin Memory, Virident, VirtunetSystems, WD, X-IO, Yuruware, Zadara, as well as other neat firms like Brocade, Cognizant, Rapid7, Sandbox, Splunk, Thinking Software and others.

From a marketing perspective it was clear that almost all the vendors had innovative products and if you gave the salespeople a chance they could articulate what makes their particular product special. Frankly, it was important to give them a chance to talk because many booths failed to adequately communicate to passers by what their company was selling, let alone what made their particular product special. It’s easy for marketers to assume that everyone else knows as much as they do about their offering. However, they assume too much. I can name 75+ Vendors Promoting an Enterprise Solution that Uses Flash Memory — that list excludes standard HDD-based storage, and most of the software solutions, including a gazillion backup/recovery products. There are easily 200+ firms vying for the attention of enterprise storage managers, analysts and journalists.

Nimbus Data was clear. They were showing “The most resilient, future-proof flash memory storage ever.” And, it must be fast to set records.

IMG_2502

Nimbus Data: An example of clear messaging.

Coraid’s value proposition was not immediately clear to me from their signage. However, when you talk with Coraid you can learn that their storage uses ATA over Ethernet, rather than iSCSI, Fibre Channel or Infiniband. I haven’t checked the specs., but they told me it was faster than iSCSI and Fibre Channel, it offers parallel performance, and it’s not limited by cable length. I’m sure storage buyers can see the value in that, especially if the price is right and they are open to another interconnect standard.

Coraid Sign

Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (Iaas) pricing models helped differentiate some products. Bluelock offers recovery as a service where they continuously backup data to the cloud and enable failover to the cloud if an issue takes down the primary data center. Asigra also offers recovery as a service. Brocade allows enterprises use networking infrastructure on a subscription basis. Users rent the equipment and can return it anytime. Zadara will also ship hardware to customers on pay-as-you-go terms or you can subscribe to their multi-tenant infrastructure in such a way that the infrastructure used is dedicated and not otherwise shared. As a 4-P marketer I’m always interested in innovative pricing and place-of-sale (delivery) strategies so I’m looking forward to seeing if the hardware rent models work.

Brocade Sign

There were a number of Software Defined Storage and Unified Storage vendors and firms that are betting on a shift from SAN and NAS. Such firms include Cloudfounders, Nutanix, Scality, Simplivity, amongst others. The unified server/storage approach fits well with the development of DIMM-based Flash modules showcased at the recent Flash Memory Summit. Like PCIe Flash drives, the DIMM Flash fits directly into a server (like RAM) taking advantage of available DIMM slots. So with the right software, all the direct attach hard drives across multiple servers can be pooled and managed as a unit while the servers’ Flash is used as a cache for application acceleration.

IMG_2486

Nutanix. Interesting product and great booth (useful whiteboard)

The well known performance issues associated with VDI had all the Flash system vendors and Intelligent Caching products on display. Although most storage systems have some form of caching built in (usually read-only), Pernixdata offers read and write caching at the kernel level for VMs, eliminating latency. VirtunetSystems has a similar VMware enhanced offering.

Cloud storage also had a big presence with the most interesting being Maginatics and Nasuni. These firms cache cloud-based data so it works like the data on your local hard disk. Racemi offers cloud to cloud data migration service and charges only for successful migrations.

IMG_2520

Maginatics Booth. An iPad accessing the Cloud (no rack required)

Of course, all the typical storage product categories were represented — everything from innovative JBOD chassis, to backup/recovery/archive software, to RAID and Flash systems. However, I’ll leave the product reviews to the analysts and journalists and move on to other marketing related topics.

On the promotion side of things, firms love to make make big announcements at trade shows. StorageNewsletter reported 33 storage-related announcements for VMworld 2013. I’m not sure why everyone follows this strategy, other than a trade show is a useful milestone that can get the engineering team to release the product. My PR and lead gen. firm, Marketingsage, has looked at the publicity firms achieve with trade show timed announcements. Unless you are a really big firm with a really big announcement, most firms simply get a mention in a roundup that covers everyone’s announcements. However, if you take Marketingsage’s advice and announce either before or after the event, you can get a nice story all to yourself. It’s simple supply and demand. Provide news when it’s scarce and you’ll get better coverage.

That said, I did have a very amusing encounter with one startup that absolutely did not want to announce the product they were promoting at VMworld. As I approached their booth, a representative spotted my “Blogger” badge and immediately intercepted me, blocking my view. I asked about their product. He answered with a few nebulous words that meant absolutely nothing, despite the information on display on the booth wall and monitor. It was a conversation akin to a cop on TV asking the guy they just pulled over: “Is that your Porsche?” To which he answers nervously “It’s my friend’s. She said I could borrow it.” “What’s your friend’s name?” “I forget, she’s really just a friend of a friend.” “I see you’ve started her Porsche with a screwdriver, didn’t she give you a key?” “No, she lost her key and I wanted to surprise her by getting the car started without it…”

So what would you do if someone blocked your view and said something to the effect of “move along now, nothing to see here.” Precisely! I stayed. It turned out they are planning a big PR announcement when they add a few more customers and did not want to dilute that announcement. I’ve seen that before. Some marketers call it a “soft launch.” It doesn’t work well. The pundits will know about the product, because they see it at the events (or at a briefing). Like me, they may respect the vendor’s request not to go public (as if a trade show is not public). However, soon the so called news is not news to the people who deliver it to the public, so the eventual announcement fizzles. The soft launch becomes a weak launch.

There were two trade show innovations that I think are worth a mention. First, there were several booths with whiteboards (see the Nutanix picture above.) A whiteboard is really helpful when discussing a network or a software stack. The second was HP’s lightbox rack. Sure it’s just a picture, but I’ve always questioned the benefit of shipping a ton weight of equipment worth hundreds of thousands of dollars, then having 2 engineers spend hours setting it up for a so called demo that amounts to a bunch of flashing lights. If it’s a canned demo, why not record it, ship the hardware face plates (blinking lights) and replay it on a screen?

HP Lightbox Rack

The HP Lightbox Rack

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

The August 2013 Flash Memory Summit in Santa Clara had a record attendance estimated at just under 5,000 people. There was a wide diversity of sessions ranging from an introduction to 3D NAND technology, to Flash DIMM components, to SSD enterprise systems, to product differentiation (my Differentiate or Die panel discussion with editors, analysts and VCs). Frankly, there was nothing new on the marketing side from the vendors selling enterprise SSDs. If you took the logos off the slides, one deck could tell the story for them all. They all have fast products, they all have similar use cases (OLTP, VDI, etc) and they all have customer success stories to tell. It appears that most have some market traction as well. Several announced new VC funding allowing them to scale up their businesses.

The fact that we now have 75+ vendors targeting enterprise buyers with products that are remarkably similar made the VC forum session the stand-out session for this marketer. It was a small crowd, probably because most of the vendors have funding and because business capitalization is not a topic that concerns most engineers and marketers. Nevertheless, it was a very valuable session that had many insights that should interest any C-level executive. Some of the same points were raised by Guarav Tehari of SAP Ventures in the earlier Differentiate or Die session. Here are the key take-away points with some added insights for CMOs.

VC Forum

Panel: Bob Witkow of Westwood Marketing, Alex Benik of Battery Ventures, Jacques Benkoski of USVP, Kambiz Hooshmand of Archimedes Labs, Ketan Patel of New Ventures Partners and Roy Hercules of Technology Growth Capital.

Flash market insights

  • The is so much competition that it will only take a year or so for the vendors to achieve product parity. Then it’s a race to the bottom with price. VCs are not seeing pitches that would compel them to fund new entrants.
  • VCs are interested in seeing products that do something interesting as a result of having Flash, but they are not seeing much so far.
  • Large enterprise has already accepted Flash. There are opportunities to sell to the mid-size enterprise.

General VC insights for entrepreneurs seeking funding

  • VCs judge proposals based on the team’s track record, the product and the problem it solves, and the business model.
  • A-Rounds fund product development and beta testing. Currently these rounds are hard to get and the product should be beyond proof-of-concept if it is to be attractive to VCs.
  • B-Rounds fund sales development, but the product should already be with some (beta) customers who will vouch for its value.
  • C-Rounds fund scaling a business that has proven its value and ability to win customers.
  • Entrepreneurs should seek enough funding to get to the next stage (funding round) and anticipate that it always takes longer, and can be more difficult, than initially thought. That means a big A-Round is important.
  • Expect to give up 30% of the company for a sizable A-Round.
  • Each large investor expects 20 to 25% of the stock so it’s important to plan capitalization through to the end. Of course, it often gets contentious.
  • VCs don’t put much value on the analyst charts that show rapid growth and large future markets. They want to see the predictions, but don’t build your funding case solely on them.
  • VCs want to see go-to-market realism and they know how hard/expensive it is to sell to a large number of small and medium businesses (SMB).
  • When presenting, start with the management team. What products have they worked on? What are the successes and failures (with lessons learned)?
  • When presenting, define your customers, the problem, how you solve the problem, and how your named competitors do not solve it.
  • When presenting, define the 3 key variables that drive your business. This is more insightful to a VC than the revenue model.
  • When presenting, specify what you will accomplish before the cash runs out for each round.
  • Intellectual Property (IP) is not seen as critical until the scale-up stage. That does not mean it’s not ultimately vital.
  • If ultimate profitability depends on high volume economies of scale, VCs are not very interested. They recommend seeking strategic investments from the large manufacturers (OEMs).
  • Ask for references from your prospective VCs (when serious negotiations start). Make sure there is a good fit amongst the people involved.

Marketingsage insights for marketers at VC funded startups in new markets

  • You are dealing with a new technology that is still evolving: new products with little or no track record; a yet-to-be-solidified market that doesn’t quite know what it wants; a new firm with VC owners whose goal is to exit profitably within 5 years; a new team that may include executives that have no hands-on marketing experience; market hype that inflates everyone’s expectations beyond reality; and a flood of big spending, noise-making, competitors. That’s as tough as it gets for a professional CMO.
  • Pessimists don’t get funding. Pessimists don’t get hired. You are on the hook for achieving some lofty goals and you may be expected to have a “magic bullet” strategy that delivers a high volume leads/sales, quickly, at a low cost.
  • Your ability to generate critical sales leads largely depends on your discretionary budget (money you can direct at lead-generating programs such as advertising and events). However, by the time you pay for employees, analyst contracts, software, pet projects, and multiple agencies, you may not have enough funds or time to get the required volume of leads. Typical A-Round and B-Round funds usually mean you have to achieve a lot with constrained resources. Of course, leveraging an integrated multifunction agency, like Marketingsage, can help solve this problem.
  • Market hype (see Gartner Hype Cycle) around new technologies results in a low conversion rate for sales leads because lots of people want to learn (triggering an inquiry/lead), but few have actual projects underway. However, the sales team articulates this phenomenon as “marketing only produces poor quality sales leads.” Of course, this can be managed with lead filtering, pre-qualification and nurturing, but it’s not unusual for sales-marketing politics to get in the way of the necessary cooperation and mutual understanding.
  • Purchase decisions can take a lot longer than anticipated, especially if the technology is new, product installations are complex, and/or the prices are relatively high. It’s not unusual to see sales cycles lasting 6 months or more. That means December sales depend on leads generated in June (or earlier).
  • Most firms go through 2, 3, or sometimes even 4, VPs of marketing between start-up and exit. Marketing executives are often last in and first out. The initial VP is highly unlikely to be there for the exit/harvest.
  • Most VPs stay about 2 to 3 years, but employee stock options often vest over 4 years.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

This is a list of positioning statements used by firms who make storage products using Flash memory. For the most part these statements come from the first line of press releases. The list was compiled for a session I was chairing at the 2013 Flash Memory Summit. However, it’s updated periodically when new vendors appear or old ones disappear.

Positioning Statements

  1. Aberdeen — a leading manufacturer of servers and storage
  2. AC&NC — custom designed and pre-configured JetStor plug-and-play storage solutions that meet and exceed each customer’s application(s) requirements
  3. Amax — a leading innovator of Dynamic Enterprise IT & High Performance Computing (HPC) solutions
  4. Assurance — leading The Way In High Performance Enterprise, Cloud and HPC Storage Solutions
  5. Astute Networks — the leading provider of performance storage appliances
  6. Atlantis Computing — the leading provider of Software-Defined Storage
  7. Avere Systems — the leader in network-attached storage (NAS) optimization
  8. Balesio — the leading provider of Native Format Optimisation (NFO) solutions for unstructured data
  9. BiTMICRO — a leading developer and manufacturer of flash-based SSD (solid state drive) technology, products and solutions.
  10. BridgeSTOR — the company Advancing Deduplication to the Cloud
  11. CacheIO — the high performance storage leader for intense media applications
  12. Calxeda — a leader in the low power server market
  13. Coho Data– a leading innovator in web-scale flash storage for the enterprise
  14. Cisco — the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected
  15. Condusiv — the leader in high-performance software optimizing technology, people and businesses
  16. Coraid — a leading provider of scale-out Ethernet storage solutions
  17. DataCore — the premier provider of storage virtualization software
  18. DataDirect Networks — the world leader in massively scalable storage
  19. Dell — listens to customers and delivers innovative technology and services that give them the power to do more
  20. Delphix — the leader in agile data management
  21. Dot Hill — a leading provider of SAN storage solutions
  22. Echostreams — a leading provider of server, storage, and system packaging technologies for today’s fast growing vertical markets such as Cloud, Datacenter, Video/broadcasting and Telecommunications
  23. EMC — a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service
  24. Enmotus — provides users with their critical data when they need it
  25. ExaGrid — the leader in cost-effective and scalable disk-based backup solutions with data deduplication
  26. Fastor — engaged in bringing future-proof solutions to the rapidly growing Cloud and Enterprise SSD markets
  27. Fixstars — Speed up your Business
  28. Foremay — ULTRA FAST, HIGH RELIABILITY, ULTRA LOW POWER, SECURED SSD
  29. Fusion-io — delivers the world’s data faster.
  30. GreenBytes — a developer of full-featured virtual desktop optimization solutions that uniquely support existing infrastructure
  31. Gridgain — a real time Big Data software company
  32. Gridstore — the leading provider of optimized storage for the modern data center
  33. HGST — develops advanced hard disk drives, enterprise-class solid state drives, innovative external storage solutions and services used to store, preserve and manage the world’s most valued data
  34. HP — creates new possibilities for technology to have a meaningful impact on people,businesses, governments and society
  35. Huawei Symantec — a leading provider of storage, networking and security solutions
  36. IceWEB — an award-winning Unified Data Storage appliance provider for cloud and virtual environments, as well as the highly secure, scalable IceBOX BYOD (Bring Your Own Device) Private Digital Cloud Solution
  37. Infinio — inventor of downloadable storage performance
  38. iXsystems — builds rock solid enterprise-class servers and storage solutions
  39. JDV — a cutting-edge developer of innovative enterprise-class SSD server appliances
  40. Kaminario — the leading scale-out all-flash array provider
  41. Kove — a pioneering leader in high performance storage
  42. LSI — designs semiconductors and software that accelerate storage and networking in datacenters, mobile networks and client computing
  43. Marvell — a global leader in providing complete silicon solutions enabling the digital connected lifestyle
  44. Micron — one of the world’s leading providers of advanced semiconductor solutions
  45. Nasuni — a provider of enterprise storage to large, distributed organizations
  46. NephoScale — creator of the NephOS next generation cloud infrastructure services platform
  47. NetApp — creates innovative storage and data management solutions that deliver outstanding cost efficiency and accelerate business breakthroughs
  48. Nexsan (Imation) — a global tiered storage and data security company
  49. Nimble Storage — the leading provider of flash-optimized hybrid storage solutions
  50. Nimbus Data Systems — the leading provider of unified all-flash storage systems for enterprise and cloud infrastructure
  51. Nutanix — the leading provider of hyper-efficient, massively scalable and elegantly simple datacenter infrastructure solutions
  52. OCZ — a leading provider of high-performance solid-state drives (SSDs) for computing devices and systems
  53. Panzura — a leading provider of global cloud storage solutions
  54. Permabit — the recognized leader in data efficiency technology
  55. Pivot3 — a leading provider of converged storage and compute appliances
  56. Proximal Data — the leading provider of hypervisor I/O intelligence software solutions
  57. Pure Storage — the all-flash enterprise storage company
  58. Qsan — making data smart
  59. RAID Inc. — an end-to-end customized solutions provider in HPC, Big Data, and Virtualized Environments
  60. SanDisk — a global leader in flash memory storage solutions
  61. SGI — the trusted leader in technical computing and Big Data
  62. SimpliVity — a provider of simplified IT infrastructure solutions for virtualized environments
  63. Skyera — a disruptive provider of enterprise solid-state storage systems designed to enable a large class of applications with extraordinarily high performance, exceptionally lower power consumption and cost effectiveness relative to existing enterprise storage systems
  64. SolidFire — the leader in all-SSD storage systems designed for large scale cloud infrastructure
  65. Starboard Storage — a provider of unified hybrid storage systems that simplify and consolidate NAS and SAN storage for midsize enterprises
  66. sTec — a leading global provider of solid-state storage solutions
  67. StorageQuest — a global leader in data and archive management software and hardware
  68. StorTrends Performance Storage with Proven Value
  69. SuperLumin Networks — a leading provider of scalable, high-performance media proxy and application acceleration solutions
  70. Supermicro — global leader in high-performance, high-efficiency server, storage technology and green computing
  71. Symform — a revolutionary, distributed cloud backup service
  72. Tegile — a leading provider of hybrid storage arrays for virtualized server and virtual desktop environments
  73. Tintri — the leading producer of storage for virtualization and cloud environments
  74. Violin Memory — provider of memory-based storage systems
  75. Virident Systems — a performance leader in flash-based storage-class memory (SCM) solutions
  76. Virtium — a leading innovator of storage and memory solutions designed specifically to meet the dynamic requirements of embedded systems
  77. WhipTail — the data storage-industry innovator powering faster applications and more energy efficient computing for today’s global businesses via flash storage
  78. X-IO — a recognized innovator in the storage industry

About the Author

David X. Lamont is an accomplished marketer and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

I’m chairing what may be the first ever marketing-oriented session at the annual Flash Memory Summit in August 2013. A lively panel of experts, editors, and analysts will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems. This post is the 3 part of a primer on product positioning. It highlights a dilemma for CEOs, CTOs, and marketers who position their products as part of a new technology solution.

Riding the Solution Wave

It’s very common to position an enterprise IT product as part of an overall IT solution. For example, positioning an SSD or cache as part of a Big Data, virtualization, or Cloud solution. Usually, these solutions relate to trends that get lots of press and analyst attention. There’s nothing wrong with riding the latest wave. It can be great for PR and lead generation. However, sometimes it does not result in as many sales as you might expect. If sales are falling short of expectations, it’s important to understand what could be happening. You may be at the front end of the Hype Cycle.

Gartner Hype Cycle

Gartner Hype Cycle

The Gartner Hype Cycle describes a common occurrence in the technology industry. Early proof-of-concept stories and media interest trigger significant publicity for a new technology. The early publicity produces a number of success stories. As a result, IT people start to download white papers and attend events to learn about this latest breakthrough — triggering lots of sales leads. Some early adopters take action, most sales prospects do not. That results in a low conversion rate from market qualified leads (MQLs) to sales qualified leads (SQLs).

In this case, I believe that Big Data is somewhere approaching the “Peak of Inflated Expectations.” It’s a promising area, but at this time most people are still figuring out how they would use Big Data — more of a business question than an IT question. They need to figure out where would the data come from and when they have the data, what questions should be asked to turn it into actionable information. Those questions need to be addressed before an organization gets to storing and analyzing data. On the other hand, server and storage virtualization was the new, promising, technology 10 to 15 years ago. Many of the issues have been resolved and that technology is somewhere on the “Slope of Enlightenment” with a large number of real customers for virtualization-related solutions.

Misunderstanding the Hype Cycle/new market situation is a huge problem for IT firms, especially start-ups. It frequently results in changes of executive management as the VP of sales and VP of marketing each incorrectly assumes that one or the other is not pulling his/her weight. The sales team wants more leads. The marketers generate more leads. The leads don’t turn into enough deals so something must be wrong. Is it the quality of the leads (marketing is blamed), the quality of the follow-up (sales is blamed) or the product itself (engineering is blamed)? Of course, any of these could be real issues. However, assuming the team is qualified and experienced, and there’s nothing wrong with the product, the problem lie with the market. Put another way, the product is positioned for a young “market” that has a lot of people who are interested in learning, but few actual buyers at its current stage.

It’s not just the VP of marketing and VP of sales who suffer by misunderstanding the Hype Cycle (and the Honeymoon Period.)  I could name one firm that bet it all and lost (sold at a low valuation) by repositioning their product from an intelligent cache to a Big Data solution, despite good advice to the play the cache position. Obviously, this also hurt the CEO, the VCs, and the entire team.

If your product is a critical enabler (must-have, not nice-to-have) then it may be bought as part of the overall solution. However in a new market triggered by a new technology, the early adopters will need some time to figure out what’s really needed to create a working solution.  Many of the early “solutions” will fail, resulting in the “Trough of Disillusionment.” As a result, the number of vendors thins out significantly as they fail to sell product and run out of capital.

The Positioning-Publicity Dilemma

The positioning dilemma is obvious. It’s much easier to get publicity and sales leads when you position your product as part of an exciting new trend. If there is one thing worse than low sales, it’s low sales and no buzz.

Buzz matters because editorial and social media coverage ultimately lowers promotion costs and builds brand recognition. A recognized brand is twice as likely to be selected (trusted). However, you have to be pro-active at creating this publicity, especially when repositioning your products.

Interestingly enough, in June 2013 I listed 50+ vendors promoting an enterprise solution that uses Flash memory. As of writing at the end of July, that list is now 75+ vendors:

Aberdeen, Amax, Arkologic, Astute Networks, Assurance, Avere Systems, BiTMICRO, BridgeSTOR, Cachebox, Cisco, Condusiv, Coraid, DataCore, DataDirect Networks (DDN), DataON, DDRdrive, Dell, Dot Hill, Echostreams Innovative Solutions, EMC, Enmotus, Fastor, Foremay, Fusion-io, GreenBytes, Hitachi Data Systems, HP, Huawei Symantec, IBM Systems and Technology Group, IceWEB, Infinio, Imation, Intel, iXsystems, JetStor (AC&NC), JBOD, JDV Solutions, Kaminario, Kove, LSI, Marvell, Micron, NetApp, Nimble Storage, Nimbus Data Systems, OCZ, Oracle, Panzura, PernixData, Pivot3, Proximal Data, Pure Storage, QLogic, Qsan, Radian Memory Systems, Reduxio, Renice Technology, Runcore SSD, SanDisk, Scalable Informatics, SeaChange, Skyera, SolidFire, Soligen, Starboard Storage, sTec, StorageQuest, Super Talent, System Fabric Works, Tegile Systems, Tintri, VeloBit, Violin Memory, Virident Systems, WhipTail, and X-IO.

Many of the firms that I forgot to add to the initial list were very familiar to me. They were typically 10 to 15 years old and had survived the virtualization “Trough of Disillusionment.” However, to many analysts, journalists, and admittedly myself, they are not perceived to be part of the latest trends. They are perceived by the pundits as HDD RAID suppliers or suppliers of older data management software, even though their products have evolved over many generations to include SSD, intelligent provisioning, real-time de-duplication and caching. That said, I expect they are doing better on the important sales side. Of course, the positioning issues with the pundits could be fixed by a good agency – obviously not one they are using, so I’ll take the opportunity to plug mine — Marketingsage.

In general, it’s smart to position your products for a new trend. Besides the publicity advantages, you may be entering the next big market at a time when you can make a real difference. However, there are some strategic implications, particularly for start-ups whose VC funding and the ability to attract talent is based on a new trend approaching the “Peak of Inflated Expectations.” If those firms do not also position their products effectively for more mature markets, or if they are not funded for the long game, then such firms can, and do, fail.

About this Series on Positioning and The Flash Memory Summit

Join me and a lively panel of experts, editors, and analysts at what may be the first ever marketing-oriented session for CEOs, CTOs, and marketers at the annual Flash Memory Summit. We will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems on Wednesday, August 14, 9:50-10:50 am. This is an Open Session so you can register for free up until 8/11/13.

You can follow this blog by signing up in the left sidebar. You can find related posts like these by clicking the Flash Memory Summit 2013 category:

  1. Flash Memory Summit 2013 Session: Differentiate or Die – Marketing Flash-Based Storage Systems
  2. The Positioning Game: 75+ Vendors Promoting an Enterprise Solution that Uses Flash Memory
  3. Competitive Positioning of Flash-Based Products – A Primer for CEOs, CTOs and Marketers
  4. Market Changes Impacting Flash-based Products – A Positioning Primer for CEOs, CTOs and Marketers

You can suggest questions and discussion topics using the comment box below or by sending me, David Lamont, an email at blog [at] marketingsage.net. If you’d like to support this topic and enhance your own social media reputation, please click the “Share This” and “Like This” buttons below. Your support is appreciated.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

I’m chairing what may be the first ever marketing-oriented session at the annual Flash Memory Summit in August 2013. A lively panel of experts, editors, and analysts will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems. So, as part of a primer on product positioning, I thought I’d explain the concept of positioning as it relates specifically to Flash-based products.

An earlier post, Competitive Positioning of Flash-Based Products – A Primer for CEOs, CTOs and Marketers, explains that your product’s position is whatever your prospective customer thinks it is, not necessarily what you want it to be. Positioning or repositioning is your attempt to influence that opinion. The post also lists the 5+1 elements of a strong position, and gives an industry relevant example.

This post highlights how customer interests change, and therefore positioning must change, as a market matures over time. Understanding this evolution is important because the market for Flash-based products is moving to a new phase. The early customers have bought their first Flash-based products already.  Those “innovators” and “early adopters” have demonstrated that there is a compelling case for Flash-based products in the enterprise.

Here are some of the use cases that gained traction:

  • Software runs faster with Flash, so fewer servers and licenses need to be purchased to support a growing user base. Users are happier, IT costs and support costs are lower.
  • Very fast IT systems give some organizations a competitive advantage in their market so Flash-based storage is mission critical for high frequency traders, some online retailers and even government agencies (think NSA).
  • Virtual servers lower IT costs, but predictable boot-storms and unpredictable surges in demand for data access can slow the system for all users. Flash-based systems make virtualization work better.
  • Flash-based systems require significantly less space and power than hard drive-based systems, substantially reducing the cost of running a data center.
  • Big Data analytics and structured databases, whether real-time or batch processed, deliver information faster when run on Flash-based systems. A batch process measured in hours can re reduced to minutes or seconds.

These tangible dollars-and-cents applications, along with the falling cost of Flash-based products, bring new customers into the market. However, these follow-on customers have different expectations to their predecessors.

Time Adoption of Innovations, Redrawn from Everett M. Rogers, Diffusion of Innovations, New York Press, 1962

Time Adoption of Innovations, Redrawn from Everett M. Rogers, Diffusion of Innovations, New York Press, 1962

Innovators (Enthusiasts): These buyers are willing to try new ideas at some risk. They can be very knowledgeable. They like to test new ideas and may not need a complete product or solution, just access to the latest technology.

There are very few, very hard to find, buyers in this market and they rarely buy in volume. In most cases, a vendor can win the positioning game at this stage if they are perceived to be a technology leader. For example, first with eMLC Flash, first with an Infiniband interface, etc.

Early Adopters (Visionaries): These buyers adopt new products early, but carefully. They seek breakthrough advantages (e.g. High Frequency Trading on the stock market using solid state disks.) They can be respected opinion leaders. They will invest in creating their own complete solution so they may need lots of support.

There are few such customers, but when you find one, you often find more in the same industry. These customers are looking for products, so with a little bit of sales and marketing, they may find you. However, many start-ups are mislead by this market and their failure to recognize the situation sows the seeds of their demise. For more, please read: Storage start-ups: What CEOs, VPs and VCs should know about the honeymoon period.

In most cases, a vendor can win the positioning game with these visionaries if they are perceived to have the lead with a product feature that’s enables the visionaries to achieve their goals. In this case, that might mean they have the fastest product, or the lowest cost per terabyte product. But it also helps to be perceived as experts in a particular application because customers need help building a solution for their particular situation. Today, that situation often involves databases and virtualization.

For those who did not notice, TMS employed Mike Ault, a recognized Oracle Guru to help customers better deploy their SSDs with Oracle databases. TMS (Texas Memory Systems), a 30+ year veteran of the industry and former client of my firm, Marketingsage, was recently acquired by IBM. TMS was very successful in its positioning for early adopters of solid state disks.

Although these Early Adopters may not buy many units, they can be very influential on the large “Majority” market that will buy in volume.

Early Majority (Pragmatists): These buyers adopt before the average firm, but are rarely leaders. They make deliberate, more considered, decisions and they want references. They have a wait-and-see attitude and like to work with proven solutions and vendors.

This is the market phase that drives the high tech industry. Sales grow rapidly because a large number of new customers enter the market. They are buying a new type of product so new vendors do not have to dislodge an entrenched direct competitor (e.g. it’s not like asking a customer to switch their existing brand of backup software). However, these buyers do not want to experiment and they are more risk-averse than earlier buyers, so well known trusted brands often win against the new lesser known brands.

In most cases, a vendor can win the positioning game with these pragmatists if they are perceived to have the best product that’s safe to purchase.

Late Majority (Conservatives): These buyers are keeping up, but not leading. They prefer simple solutions and look to the established standard. They can be resistant to change and are more risk averse.

In most cases, a vendor can win the positioning game with these conservatives if their product is perceived to be an industry standard, plug-and-play, 100% compatible option with a great warranty that’s on sale from their favorite vendor.

Laggards (Skeptics): These buyers avoid change and very risk averse. They may only purchase when there is no other choice. They buy like the Conservatives do, but only when they are forced to (remember all those UNIX gurus who wanted no part of a GUI?).

Although the real market is not likely to be a nice symmetrical bell curve, and it is hard to know exactly where the market is at, there are indications that we’ve reached the “tipping-point” and the enterprise market is entering the Early Majority phase. In this phase, a large number of new customers enter the market. Of course, as demand grows so does supply and competition.

In July 2013 there were 75+ vendors trying to capitalize on Flash-based products for enterprise customers. This list includes some newborn vendors (not yet shipping) and some undead vendors (they look dead, but still might bite.) In general, I excluded those selling only hard disk drive form-factor SSDs (e.g Seagate) and Flash chips (e.g. Toshiba, Samsung), but I included PCIe SSD vendors if they claimed to have a product for enterprise servers. Here’s the list:

Aberdeen, Amax, Arkologic, Astute Networks, Assurance, Avere Systems, BiTMICRO, BridgeSTOR, Cachebox, Cisco, Condusiv, Coraid, DataDirect Networks (DDN), DataON, DDRdrive, Dell, Dot Hill, Echostreams Innovative Solutions, EMC, Enmotus, Fastor, Foremay, Fusion-io, GreenBytes, Hitachi Data Systems, HP, Huawei Symantec, IBM Systems and Technology Group, IceWEB, Infinio, Imation, Intel, iXsystems, JetStor (AC&NC), JBOD, JDV Solutions, Kaminario, Kove, LSI, Marvell, Micron, NetApp, Nimble Storage, Nimbus Data Systems, OCZ, Oracle, Panzura, PernixData, Pivot3, Proximal Data, Pure Storage, QLogic, Qsan, Radian Memory Systems, Reduxio, Renice Technology, Runcore SSD, SanDisk, Scalable Informatics, SeaChange, Skyera, SolidFire, Soligen, Starboard Storage, sTec, StorageQuest, Super Talent, System Fabric Works, Tegile Systems, Tintri, VeloBit, Violin Memory, Virident Systems, WhipTail, and X-IO.

If we wait, most will be gone by the end of the decade. A handful will be gone because they will have won the positioning game with the global players and been acquired so the bigger firm can compete in this market. Unfortunately, most of today’s vendors will just be casualties who could not differentiate themselves in a way that attracted enough customers, or who could not defend their position from competitors claiming the same benefits at a lower cost.

What is the time-frame for success or failure with Flash-based products sold to enterprise customers?

The answer differs depending on whether you are a major global player or a start-up hoping to be acquired. If the history of the IT industry is a guide, I would say that the global players like EMC, IBM, HP, Dell, and NetApp are just getting started and will play for the next 10+ years.  They already have the sales channels, promotion budgets, and customer base in place. They are trusted brands adding a new line of products to complement all the others.

However, if the start-ups and JBOF (just a bunch of Flash) vendors are not hearing alarm bells, they are not listening. The strategic acquisitions, where the large players buy smaller firms for their technology (not customer base), are in full swing and there can’t be more than a small handful of healthy buy-outs left to go in this round. To survive with iterative technology innovations (rather than major breakthroughs) the smaller firms need to get their sales and marketing right within 12 to 24 months (4 to 8 quarters, if they are lucky) — at the time of writing in July 2013, that means they win or lose somewhere between 2H14 to 1H15. In most cases “losing” results in a change of senior management and a zombie company hoping for a reboot before having to sell the IP assets at a loss.

That’s good news for the firms who have/get their marketing act together now, because in 2 years time they will be on more solid footing with fewer competitors in a large market. In this case, marketing means:

Opening new sales channels. A reseller (incl. OEMs and service providers) is only going to sell one or two brands. With 3 to 6 months to sign, and 3 to 6 months to sell, you can see why the time to act is now. Resellers mitigate end-users’ risk (very important in the Majority market) because they already have a trusted relationship with their end-user customers. They also supply complementary products and expertise so the end-user gets a complete solution. For the vendor, they deliver quick access into new market segments without the high capital costs of doing it themselves.

Build a large prospect list. Email marketing allows you to consistently and frequently promote to named prospects, often prior to their brand-selection decision. It’s relatively low cost and effective. However, it only works when your contacts have subscribed (self-identified and shown an interest in what you have to say). Buying or renting a 3rd-party list won’t do it effectively enough so investment in lead generation is important.

Not everyone who shows an interest in learning (e.g. a subscriber downloading a white paper) is ready or able to buy a system costing tens-of-thousands of dollars (or more) so only a small percentage of your marketing-qualified leads will become sales-qualified in any given quarter. Therefore, you need to (properly) nurture that list. The response rate will be a bell curve from “hot” (buy quickly) to “cold” leads (don’t buy), but 6+ months average would not be unusual. As a result, you need to front-load your lead generation efforts to build that list sooner rather than later.

It takes months and quarters to get a lead gen. machine humming so if you wait to add the talent (employees or agencies, like Marketingsage) or wait for an inexperienced team/agency to experiment with tactics you will likely run out of time — your revenue won’t equal your capital burn rate so you’ll get weaker and weaker with each passing quarter as competitors become the hard-to-dislodge incumbent suppliers to both resellers and end-users.

Build your brand. A typical buyer will only consider 2 or 3 products, not 5 or 60+. If they do not know who you are or what you stand for (i.e. your perceived position as the fastest, best VDI solution, lowest cost, etc.) you will not be considered at all. It’s easy for EMC, HP, Dell, etc. to be recognized and considered, but not so for the other 50+ players. Even if they make it to the small consideration set, the recognized brands are 50% more likely to be selected because familiarity and trust often go hand-in-hand. Branding and positioning are closely related.

Takeaway Points

1. The market is evolving. The new buyers of Flash-based products are more risk-averse. To win the positioning game you need to convince a high volume of potential customers that you have the best product that’s safe to purchase for their particular needs.

In this market, “safe” does not just mean a reliable product. It’s is not just about MLC vs eMLC vs SLC technology or redundant components. A safe purchase is also about proven interoperability (e.g. certifications), ease of integration (e.g. same brand as server), warranties, references (e.g. customer case studies), endorsements (e.g. awards), familiar brands names (e.g. firms they read about in the press, see at events and hear about regularly) and trusted suppliers (e.g. vendors they have experience with).

2. Marketing is more important now. If technology innovation remains iterative (not ground breaking) and quickly matched by competitors, sales channel development and marketing promotions will separate the winners from losers.

3. Time is short. If you are not one of the big global vendors, your time frame for success is very limited (I’m predicting 2H14 to 1H15) for most. In this case, success might mean getting acquired or becoming profitable before the initial capital runs out. Of course, profits come from customers. The early winners have the advantage of revenue, references and incumbency.

About this Series on Positioning and The Flash Memory Summit

Join me and a lively panel of experts, editors, and analysts at what may be the first ever marketing-oriented session for CEOs, CTOs, and marketers at the annual Flash Memory Summit in August 2013. We will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems on Wednesday, August 14, 9:50-10:50 am. This is an Open Session so you can register for free up until 8/11/13.

You can follow this blog by signing up in the left sidebar. You can find related posts like these by clicking the Flash Memory Summit 2013 category:

  1. Flash Memory Summit 2013 Session: Differentiate or Die – Marketing Flash-Based Storage Systems
  2. The Positioning Game: 75+ Vendors Promoting an Enterprise Solution that Uses Flash Memory
  3. Competitive Positioning of Flash-Based Products – A Primer for CEOs, CTOs and Marketers
  4. Positioning and Hype for Flash-based Products – A Primer for CEOs, CTOs and Marketers

You can suggest questions and discussion topics using the comment box below or by sending me, David Lamont, an email at blog [at] marketingsage.net. If you’d like to support this topic and enhance your own social media reputation, please click the “Share This” and “Like This” buttons below. Your support is appreciated.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

I’m chairing what may be the first ever marketing-oriented session at the annual Flash Memory Summit in August 2013. A lively panel of experts, editors, and analysts will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems. So as part of a primer on product positioning I thought I’d explain the concept of positioning.

Playing Mind Games

Positioning starts with a product. In this case, products typically include a solid state disk, a Flash-enabled appliance or caching software. However, in marketing, the term “product” can include services, a person, an idea, and a vendor.

I’d be hard pressed to name a service, person or idea that should be included in this specific post, but the 75+ vendors competing for the attention of the enterprise buyer with Flash-enabled storage solutions are definitely relevant.  I’ll narrow the field to those competing for enterprise buyers. In most cases, the solution is a hardware product that uses Flash memory, but not always. Some vendors develop software products that mitigate the need for additional hardware, essentially fulfilling the same customer need. This June 2013 list includes some newborn vendors (not yet shipping) and some undead vendors (they look dead, but still might bite.) In general, I excluded those selling only hard disk drive form-factor SSDs (e.g Seagate, sTec) and Flash chips (e.g. Toshiba, Samsung), but I included PCIe SSD vendors if they claimed to have a product for enterprise servers.

Aberdeen, Amax, Arkologic, Astute Networks, Assurance, Avere Systems, BiTMICRO, BridgeSTOR, Cachebox, Cisco, Condusiv, Coraid, DataDirect Networks (DDN), DataON, DDRdrive, Dell, Dot Hill, Echostreams Innovative Solutions, EMC, Enmotus, Fastor, Foremay, Fusion-io, GreenBytes, Hitachi Data Systems, HP, Huawei Symantec, IBM Systems and Technology Group, IceWEB, Infinio, Imation, Intel, iXsystems, JetStor (AC&NC), JBOD, JDV Solutions, Kaminario, Kove, LSI, Marvell, Micron, NetApp, Nimble Storage, Nimbus Data Systems, OCZ, Oracle, Panzura, PernixData, Pivot3, Proximal Data, Pure Storage, QLogic, Qsan, Radian Memory Systems, Reduxio, Renice Technology, Runcore SSD, SanDisk, Scalable Informatics, SeaChange, Skyera, SolidFire, Soligen, Starboard Storage, sTec, StorageQuest, Super Talent, System Fabric Works, Tegile Systems, Tintri, VeloBit, Violin Memory, Virident Systems, WhipTail, and X-IO.

It’s possible that a majority of enterprise storage products are purchased, not because they are the best, but because they are adequate and have a particular vendor’s brand name on them. The vendor’s reputation is an integral part of what’s purchased.

That said, position is not so much about the product as it is about how the product is perceived in the mind of the prospective purchaser. Your position is whatever an individual prospect thinks it is, not what you think it is. Your position is relative — worst, worse, good, better, best product for the problem the purchaser is trying to solve. Also, your position can change.

“Marketing is Too Important to be Left to the Marketing Department” (David Packard) — Good CEOs and CTOs Step Up

Positioning or repositioning is about trying to influence what others think of you and your product. These tasks usually fall under the purview of the Chief Marketing Officer (CMO). But in reality, positioning is one of the most important responsibilities of the Chief Executive Officer (CEO), whether he or she acknowledges that responsibility or not. It’s the CEO’s responsibility because the engineering department does not report to the CMO.  That’s a key point, because in the IT industry the founding Chief Technology Officer (CTO) has by far the most influence on a product’s positioning. In most cases, the foundation for a product’s position is set long before a marketer is even hired. To succeed in the positioning game, the product needs to be designed to be the best at something — something that buyers care about enough to pay for.

4+1 Must-Have Features of a Strong Product/Position

A successful and sustainable product and/or position:

  1. Is valued by the market. Customers have to want it and be willing to pay for it.
  2. Can be differentiated from similar products. It has to have a unique valued quality that makes it stand out.
  3. Is defensible. Others can’t (credibly) make the same claims.
  4. Is promoted consistently and frequently. People can’t buy what they don’t know about.

There’s one other factor that is almost always critical to a strong position, especially for those selling enterprise IT products. That factor is: Time. It is possible that a product and company can burst onto the scene and immediately establish a strong position, but when this happens it is definitely an exception. Sorry, but that inaugural press release announcing you as “the leader in …” is just the beginning of a long process that usually requires a great product line, as well as consistency and frequency of communication to the right people, at the right time, through the right channels.

In a nutshell: Customers = Innovation x Marketing.™ More realistically, Customers = Innovation x Marketing x Time.

Parameters for Positioning Flash-Based Products

So what product features are valued by enterprise buyers of flash-based storage products? Here’s a high-level list that almost always starts with performance and price:

  • Performance – IOPS, Latency, Cache
  • Price Range – $1K to $100K+, TCO
  • Capacity – TB, Data Reduction (compression, de-dupe)
  • Power – Low Watts, Sleep Mode
  • Persistence (reliability) – Wear leveling, component redundancy, ruggedness
  • Form – PCIe, Rack, Software
  • Interface – PCIe, Infiniband, Fibre Channel, SATA, DIMM
  • Application – Features applicable to Big Data, Cloud, Virtualization, High Frequency Trading, Oracle Databases, etc.
  • Assurances – Vendor, warranty, endorsements

Interestingly, price is not always a key factor for Flash-based products. For some industries, performance trumps everything because high performance is critical to their ability to succeed in their own marketplace. Examples include High Frequency Traders and some online retailers. Persistence, reliability and ruggedness are key for many military and industrial applications. However, as the market grows and matures the percentage of one-feature buyers diminishes. For most, a mixture of performance, price and additional features determines who wins the positioning game. I’ll add more about market stages in a later post.

An Example of Solid Positioning: Texas Memory Systems

Texas Memory Systems (TMS) is a textbook example of strong product positioning, in any market, not just the the solid state disk market. Before they were bought by IBM, TMS marketed themselves (with the help of my firm, Marketingsage) as “Makers of the World’s Fastest Storage.” Here’s how TMS met the essential features for a strong sustainable position:

“World’s Fastest Storage” — Simple as it may seem, TMS said they made storage products. It’s important to inform people about the type of product you sell. Although I suspect some would disagree with me.

Here’s a positioning statement from another firm: “…a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service.” Can you guess what they sell? It’s a big firm. Who are they? If you don’t work there and haven’t looked it up, leave your answer in the comment box below.

Performance is the most valued feature for many SSD purchasers, especially those in the early phase of the market. Being the fastest is the best possible position. It’s a differentiated position because no one else can be the fastest. Most importantly, TMS took steps to defend its claimed position. First of all they trademarked the “Makers of the World’s Fastest Storage” phrase and successfully prevented competitors from using it. However, it takes more than trademarking a statement to hold a position in a prospect’s mind. TMS consistently backed up their claim by releasing product after product with record-breaking performance specifications. They backed those specifications up with independent benchmarks and customer testimonials. Additionally, it helped that they were selling high performance products for over 30 years. It takes time and consistency for a position to stick.

Although TMS claimed the pole position for those interested in fast storage, it does not mean that everyone was aware of them or accepted their claims. In my biased opinion, TMS punched above its weight but could have done better. Promotional budget aside, a stubborn refusal by the owner to adopt some basic marketing practices left them with a website and trade show booth that made them look out of place alongside the principal suppliers of enterprise IT products. This made it unnecessarily difficult for TMS to convince some of the prospects they reached that they were the success they claimed to be.

The medium matters

Cardboard signs: An illustration that the medium matters to the credibility of the message. In general, the message and its delivery should conform to the expectations of the market.

About this Series on Positioning and The Flash Memory Summit

Join me and a lively panel of experts, editors, and analysts at what may be the first ever marketing-oriented session for CEOs, CTOs, and marketers at the annual Flash Memory Summit in August 2013. We will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems on Wednesday, August 14, 9:50-10:50 am. This is an Open Session so you can register for free up until 8/11/13.

You can follow this blog by signing up in the left sidebar. You can find related posts like these by clicking the Flash Memory Summit 2013 category:

  1. Flash Memory Summit 2013 Session: Differentiate or Die – Marketing Flash-Based Storage Systems
  2. The Positioning Game: 75+ Vendors Promoting an Enterprise Solution that Uses Flash Memory
  3. Market Changes Impacting Flash-based Products – A Positioning Primer for CEOs, CTOs and Marketers
  4. Positioning and Hype for Flash-based Products – A Primer for CEOs, CTOs and Marketers

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

I’m chairing what may be the first ever marketing-oriented session at the annual Flash Memory Summit in August 2013. A lively panel of experts, editors, and analysts will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems. So, as part of a primer on product positioning, I thought I’d list the players in the game. In this case, I’ll narrow the field to those competing for enterprise buyers. In most cases, the solution is a hardware product that uses Flash memory, but not always. Some vendors develop software products that mitigate the need for additional hardware, essentially fulfilling the same customer need.

As you can see from the list of 75+ (below), there are enough vendors, products, and brands to make any buyer’s head explode. But if they wait, most will be gone by the end of the decade. A handful will be gone because they won the positioning game with the global players and were acquired for big bucks. Most will just be casualties who could not differentiate themselves in a way that attracted enough customers, or who could not defend their position from competitors claiming the same benefits at a lower cost.

Vendors Promoting an Enterprise Solution that Uses Flash

This June 2013 list (with a July update) includes some newborn vendors (not yet shipping) and some undead vendors (they look dead, but still might bite.) In general, I excluded those selling only hard disk drive form-factor SSDs (e.g Seagate) and Flash chips (e.g. Toshiba, Samsung), but I included PCIe SSD vendors if they claimed to have a product for enterprise servers.

  1. Aberdeen
  2. Amax
  3. Arkologic
  4. Astute Networks
  5. Assurance
  6. Avere Systems
  7. BiTMICRO
  8. BridgeSTOR
  9. Cachebox
  10. Cisco
  11. Condusiv
  12. Coraid
  13. DataCore
  14. DataDirect Networks (DDN)
  15. DataON
  16. DDRdrive
  17. Dell
  18. Dot Hill
  19. Echostreams Innovative Solutions
  20. EMC
  21. Enmotus
  22. Fastor
  23. Foremay
  24. Fusion-io
  25. GreenBytes
  26. Hitachi Data Systems
  27. HP
  28. Huawei Symantec
  29. IBM Systems and Technology Group
  30. IceWEB
  31. Infinio
  32. Imation
  33. Intel
  34. iXsystems
  35. JetStor (AC&NC)
  36. JBOD
  37. JDV Solutions
  38. Kaminario
  39. Kove
  40. LSI
  41. Marvell
  42. Micron
  43. NetApp
  44. Nimble Storage
  45. Nimbus Data Systems
  46. OCZ
  47. Oracle
  48. Panzura
  49. PernixData
  50. Pivot3
  51. Proximal Data
  52. Pure Storage
  53. QLogic
  54. Qsan
  55. Radian Memory Systems
  56. Reduxio
  57. Renice Technology
  58. Runcore SSD
  59. SanDisk
  60. Scalable Informatics
  61. SeaChange
  62. Skyera
  63. SolidFire
  64. Soligen
  65. Starboard Storage
  66. sTec
  67. StorageQuest
  68. Super Talent
  69. System Fabric Works
  70. Tegile Systems
  71. Tintri
  72. VeloBit
  73. Violin Memory
  74. Virident Systems
  75. WhipTail
  76. X-IO

If I missed a vendor, please let me know.

About this Series on Positioning and The Flash Memory Summit

Join me and a lively panel of experts, editors, and analysts at what may be the first ever marketing-oriented session for CEOs, CTOs, and marketers at the annual Flash Memory Summit in August 2013. We will be discussing product differentiation in a growth market in a session called: Differentiate or Die – Marketing Flash-Based Storage Systems on Wednesday, August 14, 9:50-10:50 am. This is an Open Session so you can register for free up until 8/11/13.

You can follow this blog by signing up in the left sidebar. You can find related posts like these by clicking the Flash Memory Summit 2013 category:

  1. Flash Memory Summit 2013 Session: Differentiate or Die – Marketing Flash-Based Storage Systems
  2. Competitive Positioning of Flash-Based Products – A Primer for CEOs, CTOs and Marketers
  3. Market Changes Impacting Flash-based Products – A Positioning Primer for CEOs, CTOs and Marketers
  4. Positioning and Hype for Flash-based Products – A Primer for CEOs, CTOs and Marketers

You can suggest questions and discussion topics using the comment box below or by sending me, David Lamont, an email at blog [at] marketingsage.net. If you’d like to support this topic and enhance your own social media reputation, please click the “Share This” and “Like This” buttons below. Your support is appreciated.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).