Posts Tagged ‘data storage’

Back to back acquisitions are adding to the excitement in the Flash arena. As Pure Storage pulled in another $150M in Series E funding and EMC was putting the finishing touches to its VNX2 with an all-Flash option complete with controller and software enhancements, even bigger Flash news was brewing.

Western Digital/HGST announced acquisition of PCIe Flash and software company, Virident, for $685 million on September 9. This is the third Flash acquisition the company has made in recent months. After acquiring SSD veteran, sTec, for $340 million, WD/HGST apparently beat Seagate to the punch in acquiring cache company, VeloBit, for an undisclosed sum. Seagate, along with Cisco, was also an investor in Virident.

On September 10, Cisco announced that it will purchase Flash array vendor, WhipTail, for $415 million. Undoubtedly there are folks out there humming along to the tune of the “Hokey Pokey” and wondering how serious Cisco is about storage as it expands its Unified Computing System.

It’s appears that the ability to aggregate, manage and manipulate Flash through software is a good place to be as the market moves towards consolidation.

Fusion-io and Violin will certainly be under increased scrutiny as the industry-wide game of musical chairs progresses. Will Seagate ever manage to snag a Flash chair? What shall we see at Oracle Open World in a few weeks?

About the Author

Agnes 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, security, cloud and enterprise software products. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her 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).

 

FMS 13 Banner

I am delighted to be 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 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.

Product differentiation is a strategically important topic for businesses that develop products using using flash memory. It’s important because there are many ways to position such products, competition is fierce, and the process of positioning (or repositioning) is difficult, costly, and time-consuming. To succeed, these flash-based products must appeal to as many customers as possible. They must also appeal to the press, analysts, and investors.

Are these constituencies looking for the same things? Are they still responding to technology underpinnings such as SLC or MLC, or benchmarks such as latency and IOPS?  Do they focus on features such as on-the-fly de-dupe, reliability and price, or are they more responsive to benefits such as TCO and ROI? Or, are they looking to solve problems with Big Data, cloud, databases, and virtualization?  And in the end, do any of these details matter more than the brand name on the box?

Great Panel of Opinionated Experts

So who can help us answer these questions? It would be great to ask all the buyers directly, but we don’t have that luxury. Besides the logistical challenges, each buyer represents just one viewpoint in a large and diverse marketplace. However, the press and analysts have their fingers on the pulse of the broader market. They communicate with the broader market and they’ve been on the receiving end of almost every vendor pitch. Additionally, the buyers look to these people to help them form their opinions on the best SSDs for their situation. So, we’ve invited some of the most knowledgeable people in the SSD industry to share their opinions on what matters. They include some of the smartest, most experienced editors, analysts and VCs in the industry:

Panel Photos

Rich Castagna, Editorial Director, Storage Media at TechTarget. Rich oversees content for Storage Magazine, SearchSolidStateStorage.com, SearchStorage.com, SearchVirtualStorage.com, SearchCloudStorage.com, SearchDataBackup.com, SearchSMBStorage.com, SearchDisasterRecovery.com, SearchStorage.co.UK, SearchStorageChannel.com and Storage Decisions seminars and conferences. Rich has been involved with high-tech journalism for more than 20 years; previously, he was executive editor of ZDNet Tech Update and Cnet Enterprise; editor in chief of Windows Systems magazine; senior editor for Windows magazine, and senior editor and technical editor for PC Sources. Rich has written more than 600 computer technology articles.

Mark Peters, Senior Analyst at Enterprise Strategy Group. Mark is an ESG senior analyst focused on storage systems. His particular areas of emphasis are block storage; virtualized storage; all types of solid-state storage; and the challenges of power, cooling, and space efficiency in data centers. Mark has more than 25 years of data storage industry experience and has held senior management roles in sales, marketing, product management, business development, and customer intimacy in the U.S. and internationally.

Chris Preimesberger, Editor-in-Chief of Features & Analysis, eWEEK. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager’s Journal and DevX.com and was managing editor of Software Development magazine. Chris has won more than a dozen regional and national awards for his work.

Gaurav Tewari, Director at SAP Ventures. Gaurav is a venture capitalist focused on growth and later-stage investments within Software/SaaS, Internet, Digital Media, Mobile, and Technology-Enabled Services. Prior to joining SAP Ventures he was with Highland Capital Partners and led or was instrumental in their investments in Violin Memory, Criteo, Marin Software (MRIN), , Affine Systems, Beyond the Rack, Cafemom, Coremetrics (IBM), Navic Networks (MSFT), Rent the Runway, StyleFeeder (TWX), and Yipit.  Previously, he was a Corporate Strategy executive at Microsoft, and a management consultant with McKinsey & Company, where he led strategic initiatives for Fortune 500 companies.

Frank Berry, Senior Analyst with IT Brand Pulse, a trusted source of product testing, IT Pro research and industry analysis about data center infrastructure. Prior to founding IT Brand Pulse, Frank was vice president of product marketing for QLogic, and vice president of worldwide marketing for Quantum.

David Lamont, Partner, Marketingsage. I am a marketing professional and strategist with over 25 years of storage experience, including 10 years marketing solid state products. I’ve helped large storage vendors including IBM and Seagate as well as innovative storage and Flash vendors such as Texas Memory Systems, Tegile and GridIron Systems. I share insights on Flash, storage and marketing topics on this blog and on the Words To The Wise section of Marketingsage website. I am a founding partner at Marketingsage, an agency that helps storage marketers with content development, publicity and lead generation.

About this Series on Positioning and The Flash Memory Summit

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. The Positioning Game: 75+ Vendors Promoting an Enterprise Solution that Uses Flash Memory
  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

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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).

Summary: Marketing VPs and CEOs at data storage and data management firms can use these 5 techniques to generate more sales for the same budget by thinking strategically about how they allocate money.

I think it fair to say that most executives take a tactical, rather than a strategic, approach to the marketing budget. For the most part they take last year’s budget and adjust it up or down or they base it on a percentage of revenue. Then they apply the relatively small changes to their existing expenditures. Accordingly, firms set in motion a marketing program that may not provide them with any competitive advantage. And for most, that’s OK. It is good enough not to be at a competitive disadvantage.

However, it’s possible to gain a competitive advantage at budget time. By that, I mean a small sales-centric firm can “punch above its weight” and generate more sales for the same budget by thinking strategically about how it allocates money.

Strategic budgeting also makes it possible to overcome many of the B2B marketing challenges:

MarketingSherpa Marketing Research Chart:

A worthy goal is to maximize the funds that are applied to lead generation and lead management. What’s a lead? It’s not a web page visit, a click, or a rented list. A lead, according to Marketingsage’s definition is “a sales opportunity-related request with actionable contact information recorded by [you].” These actionable requests are reliably generated by paid promotions such as online advertising, trade shows and email campaigns, especially when supported by product-centric PR and highly selective participation in social media.

Another goal, for business with a resale or distribution channel, might be to increase the funds available for sales incentives directly tied to revenue. For example, paying market development funds to resellers only when they meet a set revenue objective.

Regardless of the promotion or incentive, strategic budgeting usually comes down to applying money to programs and campaigns that have a direct, or highly influential, impact on sales. So if your budget is not increasing, you are really making a decision to take funding from something or someone so you can apply the money to something or someone else that may have a greater impact on sales.

That’s why strategic budgeting is tough. Almost all marketing program and campaign will have their merits and supporters. However, the fact that it tough to do is also the reason why it’s possible for some to out perform peers with the same budget.

With that said, I’ll highlight my top 5 techniques for strategic budgeting.

Calculate What your Promotional Budget Should Be

When you have a revenue target, a lead-to-sale close rate, an average cost per lead and an average customer value you can estimate how many leads you’ll need and the required budget.

For example, if you pay the industry average of $60 for an information request type lead (e.g. white papers download), and your lead-to-sale close rate is 0.5%. You can calculate that you need 200 leads per sale and those leads will cost $12,000. If this year’s revenue target is $10-million and the average customer generates $100,000, you need 100 customers. The 20,000 leads you need for 100 customers will cost $1.2-million in promotions.

Of course, a happy customer can be expected to purchase more and the cost of incremental sales to existing customers will be far lower.

When you do this for the first time you may fund the numbers quite sobering. That’s not a bad thing because the strategic marketer will use this calculation to push back on unrealistic expectations and goals or to justify the appropriate budget for the targets set.

Adopt an Opportunity Cost Perspective

The average cost for an information request type lead (e.g. a white paper download) in the data storage industry is ~$60. As such, you’ll find it helpful to think of each $10,000 that is not spent on lead generation as 166 lost leads.  You can translate that into foregone revenue when you calculate your own close rate and expected average value of a customer – $83,000 using the above example (more if customers have a recurring value).

Thinking in terms of lost leads is very helpful when making judgment calls. For example, should you spend $60,000 to upgrade the trade show booth? Yes, if you think it will deliver a return greater than ~1000 leads – $500,000 in new revenue using the above example.

The same question can be applied to the purchase of marketing analytics tools, paid analyst relationships, promotional giveaways, internal sales meetings, custom creative, etc. If you are the CEO, you can apply this opportunity cost perspective when allocating budget to other departments, rather than to marketing.

Invest Early

If it takes an average of 3 months to convert a sales lead to a customer your fourth quarter promotions are driving next year’s revenue, not this year’s. Therefore a strategic marketer will invest almost everything early in the year to drive sales. Early sales success can be used to justify, and fund, the additional budget required to sustain the momentum later in the year.

Although the data storage and data management industry is not as seasonal as bathing suits and snow blowers, it does have some peaks and troughs that should be taken account. For example, summer months tend to be slower and government and educational customers purchase in cycles. Strategically it may make sense to execute the bulk of your lead generating promotions in the first 5 months of the year.

The word “execute” is important here because it takes 4 to 8 weeks to prepare most promotions – longer for trade shows. Add months and quarters if you need to hire staff, plan and/or build consensus.

Think Talent

Executing lead generating promotions on time with sufficient budget is paramount to success. Your ability to do this will depend on having the right skills at the right time. Therefore, strategic marketers think about talent before they decide whether to hire employees, agencies and/or contractors.

Your choices here are critical simply because talent is likely to be your largest single expense. Typically talent expenses, including payroll, annual analyst contracts, and agencies can consume 60% to 90% of a marketing budget so productivity gains can make a huge difference if savings can be directed into sales programs and lead generating campaigns.

Whether you can redirect savings from increased productivity depends on whether your talent expenses are fixed or discretionary. Payroll is essentially a fixed costs so sales-centric productivity is key. If an employee costing $150,000 per year is spending just 20% of their time on irrelevant tasks, you are effectively forfeiting $30,000 worth of leads. Using the above example, that’s 500 leads that could drive $250,000 in revenue.

On the other hand, outsourced talent is typically discretionary so you can use the services for what you want, when you want, for as long as you want. There usually very little, if any, “busy work.”

Therefore, the strategic marketer minimizes fixed expenses by keeping the number of employees to an absolute minimum and ensuring that the vast majority of everyone’s time is spent on activities that can impact sales. Many deliberately under-staff for 3 reasons:

  • Employees, and everyone who demands their time, are forced to prioritize.
  • To get everything done, tasks will need to be outsourced. Therefore the value and cost of the task will more visible and it will get more consideration (see note on the Opportunity Cost Perspective).
  • Discretionary budget can be more easily reallocated to sales programs.

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Of course every situation is different, but based on decades of experience I’ll offer this rule of thumb:

≤60% of the talent portion of the budget should be allocated to employee payroll, bonuses and benefits and tools (including the VP of Marketing). The most productive teams have experienced product marketers with deep knowledge of the products and industry.

Their job is to manage the day-to-day tasks that cannot or should not be managed by outside agencies. These include liaising with customers, vendors, technology partners, resale partners, salespeople and engineers. This interaction allows them to:

  • Define the strategy, budgets, and timing.
  • Define the product and company positioning.
  • Tee-up press announcements and the outsourced development of sales tools (case studies, brochures, video, etc.)
  • Make decisions about product pricing, sales programs and promotional investments (lead quality, the acceptable cost per lead, tactical placements, events, etc.)

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≥40% of the talent portion of the budget should be allocated to outsourced services such as PR, creative services, media buying, event management and strategic counsel – tasks that are performed better by people with broad media relationships, independent perspectives, and specialist skills. For most firms these tasks do not fill a 40 hour week and specialist skills, contacts and tools make it difficult to hire an effective do-it-all employee. Additionally, many of these tasks need to be executed simultaneously during certain periods of the year requiring bandwidth that just not available from a highly productive internal team.

A highly productive small tech firm marketing a B2B product like storage or data management software can compete using an experienced product-centric VP of marketing, a senior marketing manager, and one full service agency (like my PR and lead generation firm, Marketingsage 🙂

Such an organization would typically:

  • Run 20-25 simultaneous adverting campaigns, including creative, landing pages and lead capture.
  • Generate 10-12 press announcements per year and brief press/analysts each time.
  • Run quarterly reseller inventive programs.
  • Attend 6 or so domestic trade shows.
  • Run 8 to 12 prospect lead nurturing email campaigns.
  • Manage the process for 4 or so interoperability certifications.
  • Author and layout 4 or so white papers.
  • Author and layout 6 or so case studies.
  • Produce 20 minutes worth of videos.
  • Maintain the web site.
  • Maintain a corporate blog.
  • Selectively participate in sales-centric social media discussions.

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Fast, Good, Cheap

You’ve heard the saying: You can have it fast, good or cheap. Pick any 2. For a marketer at a small firm in the storage and data management sector the priority is clear:  Fast and good (enough). Cheap is not the strategic option, even for a cost conscious marketer. Here’s why:

Time is your enemy. The market is highly competitive so a better or less expensive product will emerge soon – maybe before you see an ROI on your current development efforts. This could leave you at a competitive disadvantage with unsold inventory, depressed margins and higher promotional costs.  Additionally, if your firm does not yet have a positive cash flow, time is burning up your available capital. Ask the CFO what’s preferable: spending an extra 20% on an agency that can execute now; or burning 3 months of expenses for the whole company while you go through a hiring or orientation process.

Obviously fast and bad will not win you customers. However, don’t let perfect become the enemy of good enough. Good enough is faster and less expensive than perfect. You’re in the B2B IT market, not the fashion market, so let your competitors waste time and money on custom art, billboards, golf sponsorships, and chotskies while you deliver what prospects want – timely information that helps them choose your product over the alternatives!

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).

Summary: A look at the love, launch and lapse phenomenon encountered by many start-ups, what underlies the lapse, and how to mitigate it happening to your firm.

Over the past 20 years I’ve followed the successes and failures of firms in the data storage and data management arena. I’ve noticed a phenomenon that impacts those who sell enterprise software and systems based on new, or potentially disruptive, technology. In today’s market such technology would include systems based on solid state disks (SSD) as well as some cloud enablers, virtualization/VDI solutions and Big Data solutions

The phenomenon is the love, launch, and lapse phases many start-ups experience. In other words, most tech firms experience a honeymoon period that eventually ends. Here’s what happens:

Love at First Sight: The executives and board members are working their Rolodex to sign up beta customers and these initial customers love you. Additionally, analysts and journalists are calling you and you haven’t even come out of stealth mode. If you are out of stealth you may even have been recognized with a “most promising” or “company to watch” award.

Launch Like a Rocket: You hire a PR agency and announce your venture funding and your new product. You get lots of press coverage, especially in the storage media that you read every day. Additionally, your sales team has a bunch of prospective customers. You may even have some noteworthy customers.

Under these circumstances the typical CEO adds salespeople and minimizes the budget for paid promotions like advertising. After all, the prospects in the pipeline were relatively easy to get and PR is driving the funnel. Given everyone’s enthusiasm the plan presented to the board will likely be high on the revenue forecast and low on marketing expenses.

Lamentable Lapse: However, as the quarters pass the vast majority of “hot” prospects turn cold and the press coverage is no longer generating many leads. Other firms now dominate the editorials. The resellers are signed-up, but not selling. There’s little discretionary budget available for promotional campaigns and the few that are tried don’t produce enough results. The marketers are sent on the fruitless quest to find the “magic well” — a single source for high volume, low-cost, purchase-ready leads. The blame game is heating up so office politics between sales and marketing are becoming a drain on productivity. The PR agency is fired. The VP of sales is replaced. The VP of marketing is replaced. Eventually, the CEO is replaced.

What happened?

The analysts and press are always interested in new technology, new products, and new firms. It’s their job to know what is going on in the market. They trade in that knowledge as well as sell their own services to storage vendors. Almost every technology start-up can get their “15 minutes of fame.”

PR agencies know that, so a few storage specialist PR-only firms have built their entire business on the “launch and leverage” model. I prefer to call it the “launch and lapse” model. It’s a great model for PR agencies. News about new technology, products and VC funded companies is in demand so the agency can usually show great initial results to the client (and to the client’s competitors — the PR agency’s new prospects). However, when the launch is done the “heavy lifting” starts. At that point, the PR agency executive that sold the service turns the start-up over to a less influential account manager and moves on to new business (often the client’s competitors.)

Most new publicity (PR or advertising) will release a pent-up demand for information about what’s being promoted. It’s that pent-up demand for certain information that results in an initial surge of leads, followed by diminishing returns. These diminishing returns are easiest to see with some online adverts. The early placements generate more results than later placements (I know, it’s the opposite of print and what the advertising sales rep tells you.) The initial demand is satisfied so when the publication’s audience is not growing at a sufficient rate, the volume of sales leads falls for the same advert. It’s normal!

Of the leads that come in, it’s not uncommon for a technology firm to see a high number of “false positives.” These look like good leads, but don’t close quickly (or at all) so the close rate is very low. False positives result when the hype surrounding a new technology piques peoples’ curiosity. They want to learn about it so they end up downloading the white papers and otherwise flagging themselves as a lead. However, if the new technology has multiple applications (e.g. SSD in consumer and enterprise applications), is complex (e.g. integrates into larger systems and requires buy-in from many people) or is expensive (e.g. beyond the budget authority of the purchase champion) you should expect a long and difficult sales process that can take months, or even years, of nurturing and selling.

What about the happy customers? Beta customers are not the same as real customers, even if they are big names. Many large enterprises are willing to try new technology. The real test is whether they deploy it widely as a result. Additionally, the start-up probably sold the beta product at a big discount (or gave it away) and the tech support people are the best engineers who’ll drop everything to deal with an issue. Lastly, as good as the executives and board may be at at leveraging their executive-level contacts, that sales model is not scalable or repeatable by ordinary salespeople.

STEC stock value after announcing that OEM customers may choose other SSDsUnfortunately, big OEM deals can also result in an eventual lapse. The big OEMs – HP, Dell, IBM, etc. – have annual design cycles for their server and storage products so the components suppliers chosen this year may not be the same as those chosen next year. Big suppliers like Seagate and Western Digital can keep up with the design cycles, but a start-up is typically so overwhelmed with the initial design-in business that they fail to secure the second and subsequent supply contracts. An established vendor that loses a design-in contract will turn to other customers (often through an established distribution channel), but a start-up often goes out of business (or gets acquired at a low valuation). Others, like STEC, may just lose half their stock value.

In fact, it’s often the lucky start-ups that are overwhelmed with fulfilling the demand of a large customer. They are generating revenue and have proven the end-user demand for their innovation. Others sign promising deals with big OEMs (with all kinds of hooks and exclusivity requirements), but the OEM does not sell nearly as many as forecast.

All of these factors assume that a market exists and therefore the sales issues can be overcome. That’s not a given, but I can accept that it is for most data storage products. There is a growing need for capacity, speed, protection and management of data. However, a market is made up of different types of buyers who require different things.

Enterprise SSD is in the Early Adoper Phase

SSD Market 2011

A new market segment is made up of “Innovators.” These buyers are technology enthusiasts willing to try new ideas at some risk. They like to test new things and don’t need complete solutions. They just need access to new technology. These Innovators may buy the product based on its technological capabilities. However, the larger number of “Early Adopters” have different needs.

Early Adopters are looking for a breakthrough advantage in their business and require complete solutions. A solution is not a just box full of Flash or some other technology. Solutions include expertise in the customer’s environment. Therefore, successful firms sell an augmented product that includes more than their raw technology. For example, Texas Memory Systems, a 30+ year old solid state disk supplier, speaks fluent Oracle. They employ an “Oracle Guru” who works with the DBAs that initially identifies the performance problem that’s ultimately solved by the product being sold.

The challenge for the start-up in new market segments is to solve both a technical problem and a business problem. Solving the technical problem can generate a few sales to the Innovators. However, a business problem must be solved to sell to the Early Adopters and many technology start-ups don’t invest enough to market and sell in this environment.

What Really Happened?

The lapse is a result of the executives doing something reasonable. They believed their own eyes and planned accordingly. Unfortunately, they did not recognize that they could be in a honeymoon period so the number of prospects in the pipeline was significantly smaller than it needed to be and the infrastructure to generate leads was lagging.

The initial good news made everyone optimistic when they would have been better served by hoping for the best, but planning for the worst.

Hoping for the best, but planning for the worst

Technology start-ups often establish just one of the 4-Ps necessary for sales success. They establish the product, but do not establish a working promotion, pricing, or channel (place-of-sale) model. In a nutshell, they do not build a working sales and marketing system before the clock runs out. A working system allows you to execute a process and get reasonably predictable results.

Sales leads are at the core of the system. Since people can’t buy what they don’t know about, promotions are used to create market awareness, build brand recognition, and generate sales leads. These promotion-driven sales leads not only have the potential to drive revenue, they are also critical to optimizing your overall marketing. They are the equivalent of an early warning system.

For example, if you know what you are doing and what to expect (as my firm, Marketingsage, does) and it turns out to be difficult and excessively expensive to generate sales leads then you’ve learned something. Your message is not working for the audience you promote to. If the audience includes your customer prospects and your message talks about your product, you may have a positioning issue or need to rethink the offering.

On the other hand, if you are generating leads at a reasonable price it’s fair to conclude that your message is resonating. Therefore if there is a sales issue, you save time and considerable money by investigating product, pricing or channel expectations first. Without a reliable flow of leads, you have to ask if you’ve generated enough awareness for your offering. The only way to answer that question quickly is run many simultaneous promotions. That’s expensive and a big risk for resource- and time-constrained start-ups.

There’s another benefit to building a lead generation system. If you do enough lead generation you’ll end up with a fairly reliable cost-per-lead (CPL) number and a close rate percentage. Those numbers allow you to plan and budget effectively.

For example, if you pay the industry average of $60 CPL and close 0.5% of leads, you can calculate that you need 200 leads per sale and those leads will cost $12,000. If this year’s revenue target is $10-million and the average customer generates $100,000, you need 100 customers. The 20,000 leads you need for 100 customers will cost $1.2-million in promotions. If the sales lead time is 6 months you need all your leads by the end of June. That means the promotions had to ramp up last year. Of course, that’s a little simplistic, but hopefully you get the idea.

Your numbers may be different, but the scenario presented is typical enough. The good news is: When you have data, you can start to drive down the CPL and drive up the close rate to optimize your system. Additionally, happy customers can be expected to purchase more. Therefore, their 3- or 5-year value is often substantially higher than the value of the first year’s sales and the cost of incremental sales is far lower.

There are many ways to generate sales leads (see The Most Effective Sales Lead Generation Methods for Storage and Enterprise Software) – too many to discuss here. However, the difference between a mature lead generation system and ad hoc promotion is typically the inclusion of online advertising.

Done properly, online advertising is effective, cost-effective and relatively predictable. Unlike other promotional methods you can control the placement, timing, message and call-to-action. This control allows you to adjust and optimize in a relatively short period of time. Additionally, it’s scalable!

Bogging, tweeting, cold calling, trade shows, seminars, etc. all require human resources. Consequently, they can be considerably more expensive for the results achieved than just spending a few well placed dollars on advertising.

Bottom Line for CEO’s, VPs and VCs

Recognize that your firm is likely to experience a honeymoon period. Set realistic expectations so you have a chance of success and can justify the necessary up-front investment in lead generating promotions, not just product development.

Realize that the sales cycle for enterprise storage products can be very long. Think 6+ months for today’s enterprise SSD systems and other new technologies in emerging markets. Add months to get promotional campaigns producing. Add quarters if you need to staff-up, build infrastructure as well as get the campaigns producing.

From day-one, build a scalable lead generation and lead nurturing system so you know that you can generate more/less leads as required from various sources.

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).

My firm, Marketingsage, helps data storage and data management firms market to enterprise customers. One of our lead generation services is trade show support so we see a lot of shows. We also use trade show-timed PR to launch products and to seek quality speaking engagements for our clients. Therefore, we though it might be useful to maintain a list of top trade shows for marketers of enterprise storage and data management products.

The following shows attract the same vendors year after year — a good sign that the show produces results for them. They also attract a reasonable number of like vendors. That’s important because sales lead results are often better when a firm is among a cluster of competitors rather than on its own.

The list is far from comprehensive. There are a host of vertical shows that would be of interest to platform-specific or industry-focused vendors. I’ve just listed the bigger, more well known, shows frequented by enterprise storage and data management firms.

Note: The start dates and locations listed can change from year to year.

4Q USA: October, November, December

  • Interop – Early October, New York, NY. Billed as “the most comprehensive IT conference and expo.”
  • Oracle OpenWorld (OOW) – Early October, San Francisco, CA. Billed as “most cost-effective and efficient way to stay ahead of the technology curve.”
  • Storage Networking World (SNW) Fall – Mid October, Orlando, FL. Billed as ” transforming the information infrastructure.”
  • PASS Summit – Mid October, Seattle, WA. Billed as “the premier conference for SQL Server professionals.”
  • SC Conference – Mid November, Seattle, WA. Billed as “the international conference for high performance computing, networking, storage, and analysis.”

1Q USA: January, February, March

2Q USA: April, May, June

  • FOSE – Early April, Washington, DC. Billed as “the choice for government IT education.”
  • National Association of Broadcasters (NAB) – Mid April, Las Vegas. Billed as as the show “where content comes to life.” Listed as one of the Top Trade Shows (see below) with the highest Net Buying Influence (91%) and highest Total Buying Plans (59%).
  • COLLABORATE – Late April, Las Vegas, NV. Billed as “the technology and application forum for the Oracle community.”

3Q USA: July, August, September

  • VMworld – Late August/Early September, San Francisco, NV. Billed with “Your Cloud. Own it.” Listed as one of the Top Trade Shows (see below) with the highest Net Buying Influence  (91%) and highest Total Buying Plans (55%.)

Top Trade Shows Notes for NAB and VMworld (4/12 update).

Exhibit Surveys Inc. produces an annual Trade Show Trends report and highlights are usually published in the April issue of Exhibitor Magazine. The report compares various industries so it’s limited in its coverage of any one industry, such as IT. The IT-centric events in the 2011 survey included CES (consumer electronics), NAB (broadcast technology), RSA Conference (data security), Supercomputing and VMworld (virtualization). These are all good shows, but hardly representative of all good shows frequented by IT buyers.

The Trade Show Trends report looks at many factors, but the two most useful are the Net Buying Influence and Total Buying Plans statistics.

The Net Buying Influence number indicate the percentage of show attendees who have the power to recommend or make final purchasing decisions. The average Net Buying Influence for High Tech shows was 84% in 2011. That’s 3 points above the overall average of 81%.

The Total Buying Plans number represents the percentage of attendees whom plan to buy within 12 months of a show. High Tech shows rate better than most in this category with an average of 46% in 2011, just below the overall average of 47%.

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).

IDC has just released its Worldwide Disk Storage Systems Quarterly Tracker for Q2 2011. The shipment of 5,353 petabytes in total disk storage systems capacity for the quarter represents a 10.2% increase in Q2 revenues compared to Q2 2010. Only Dell and the many hundreds of “Others” saw a decline in revenue.

It’s cheering to see some tangible evidence of prosperity and an uptick in IT spending. However, it behooves not only Dell and Oracle (Sun), but the smaller, emerging companies in the storage arena to pause and think strategically about how they can compete against EMC, IBM, NetApp, HP and Hitachi who jointly won 74% of the market in 2Q11.

Technical innovation is only a partial answer. When considering access to market, the conundrum is whether to try to beat them or join them.

Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Second Quarter of 2011 (Revenues are in Millions)

Vendor

2Q11 Revenue

2Q11 Market Share

2Q10 Revenue

2Q10 Market Share

2Q11/2Q10 Revenue Growth

1. EMC

$1,621

28.7%

$1,287

25.6%

26.0%

T2. IBM

$771

13.7%

$680

13.5%

13.4%

T2. NetApp

$720

12.8%

$572

11.4%

25.7%

4. HP

$619

11.0%

$567

11.3%

9.1%

T5. Hitachi

$459

8.1%

$372

7.4%

23.3%

T5. Dell

$444

7.9%

$472

9.4%

-5.9%

Others

$1,009

17.9%

$1,080

21.5%

-6.6%

All Vendors

$5,643

100.0%

$5,031

100.0%

12.2%

Source: IDC Worldwide Disk Storage Systems Quarterly Tracker, September 2, 2011

Press release: http://www.idc.com/getdoc.jsp?containerId=prUS23012911

Report: http://www.idc.com/getdoc.jsp?containerId=IDC_P4435

About the Author

Agnes 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. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).

In Scott Shane’s book “The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By,” there’s a chart showing data the four-year survival rate for technology businesses at 38% – poor compared to other industries. Given the competitive and fast-paced nature of technology, that’s not too shocking. Great ideas and great people are not enough to ensure success. Time is, as they say, money.

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Too often, consultants can only advise on strategy and content, but can’t produce the actual materials, effectively increasing their client’s workload. Typical PR and creative agencies can’t create content from the ground up, articulate meaningful differentiation, nor create detailed prospect profiles because they don’t have the necessary depth of product and market knowledge. Working with multiple specialists and agencies is not only unwieldy, but far too expensive for a start-up who may be facing the imminent prospect of raising venture capital.

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About the Author

Agnes 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. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).