Lustratus REPAMA - Strategic Marketing Analysis

Updated High Performance Messaging Report

Just a quick note to say that the updated High Performance Messaging REPAMA Segment Analysis Study has been uploaded to the Lustratus site.  It now contains the reverse-engineered product marketing strategy for TIBCO’s Messaging Appliance P-7500.  Existing customers and Lustratus research subscription holders will already have been contacted with details of free upgrades. 

Following on from the blog entry I made when the first version of the report was released I thought I’d show the updated value proposition below.  As I mentioned in a previous blog entry TIBCO’s primary competitive focus is very unusual – it is TIBCO Rendezvous - one of its own products.  The different approach to the market doesn't stop there as you’ll see from the report extract below.  TIBCO also plough its own furrow by taking a different proposition to the market when compared with most of their competitors.  This one based around green IT and data centre costs (in addition to the obligatory low latency = competitive advantage proposition).

For more information on the REPAMA methodology visit here.

Danny Goodall.

Low Latency Messaging Event

The good people at 29West have asked Lustratus to moderate a panel discussion at their upcoming Zero Latency Tour event in London on Tuesday 19th May.  It promises to be a good discussion as the participants all have solid real-world experience of building and implementing low-latency systems.  We should have a lively debate attempting to answer the basic questions of how close to zero latency you can get and how you go about achieving it.

Speakers include:

• Nigel Woodward, Global Director Financial Services, Intel
• Martin Thompson, Director of Engineering, Tradefair
• George Andreadis , Head of AES Liquidity Strategy, Europe, Credit Suisse
• Mark Reece, eTrading Solutions Architect, HSBC

A similar event is also taking place in New York in June.  Visit the 29West web site here for more information.

TIBCO eats itself

Cannibalization.  You don't get to see that very often unless something strange has happened.  No, I'm not talking about the act of eating the flesh of the same species.  Instead I'm referring to where a vendor eats into its own sales by promoting one of its products ahead of another in the same market.  It is highly unusual for a vendor to be willing to sacrifice sales of one product line to increase another.  In my experience these things usually happen through some form of mistake or oversight in planning.  However, that doesn't appear to be the case with TIBCO's recent announcement of the TIBCO Messaging Appliance. 

As we suggested in our report The High-Performance Messaging Arms Race, we thought that the introduction of hardware into this market would have an impact.  And that certainly appears to have been the case.  In light of TIBCO's new product introduction I'm in the process of updating the REPAMA SAS on High Performance Messaging (where we looked at the marketing strategies of 29West's LBM, IBM's LLM and Solace Systems' Content Router).  As regular readers will recall, one of the key elements of the reverse-engineered positioning statement that we use with the REPAMA methodology, is the UNLIKE section.

UNLIKE (primary competitor or alternative)

This element of the positioning statement is usually used to aim the full power of the vendor's USP at a specific competitor.  However, in my early findings for the TIBCO, the UNLIKE element for TIBCO's Messaging Appliance appears to be:

UNLIKE TIBCO Rendezvous

That's right.  TIBCO sees the Messaging Appliance's primary alternative as TIBCO Rendezvous.  Which begs the questions; why aim the full power of this new product at an incredibly successful existing product?  Why is TIBCO happy to cannibalize sales of Rendezvous for the benefit of the Messaging Appliance?  It appears that the answer could be three-fold. 

1. TIBCO no longer believes in the proposition for Rendezvous (in software). 
2. Extreme competition exists from other software vendors that are able to simply replace Rendezvous and perform far better.  
3. As referenced here in SDTimes, TIBCO sees the advantages of blurring the CapEx/OpEx boundaries through the love that keeps on giving - the annual lease. 

So whilst self-cannibalization of sales is usually the by-product of poor planning, here it appears to be TIBCO's only choice.  Either way it's a risky strategy and represents a big opportunity for software vendors that are able to do what Rendezvous does (IBM, 29West, etc.) and is also a pat on the back for Solace Systems - who had more than a little hand in the production of TIBCO's Messaging Appliance.

Danny Goodall

P.S. Apologies for the image at the top but I usually like to select an image that matches the blog subject.  But having image Google'd "cannibalism", I just couldn't use any of the images!

REPAMA Guide Now Online

Despite being available in "beta" form to REPAMA users for some time, I finally got round to packaging up a publicly downloadable version of the Lustratus REPAMA Guide. This can be downloaded from Lustratus.com for no charge. 

I should say a big thank you to clients, colleagues and everyone else who has provided feedback on the guide, which studies should be included and how they should be presented. So "Thank you"! 

And for those looking to understand the product marketing and go-to-market strategies of TIBCO's competitors in the High Performance Messaging space - specifically  Solace Systems' Content Router, 29West's LBM and IBM's WebSphere MQ LLM - I've also put the High Performance Messaging REPAMA Segment Analysis Study in the store.  I'll be adding the individual reports on each of the vendors in the coming days

Dan.

An "average" marketing strategy

Mean.  It's a great word isn't it.  But what does mean, mean?  If you see what I mean.  It's either hateful, the intended meaning of something or, as I want to use it here - an average.  In this case it's the "average" marketing strategy for a specific marketing segment.  What would be the value of knowing the "average" marketing strategy for any number of strategic marketing elements for the segment in which you compete?

i.e. on average for your market segment who is the ideal target customer organisation? On average what job roles do your competitors target? On average which vertical markets are favoured? On average who does your competition see as their primary competition? etc.

(click the image for a larger version)

(click the image for a larger version)

(click the image for a larger version)

The above Marketing Element Distribution(TM) charts are taken from a recent Lustratus REPAMA(TM) Segment Analysis Study into High Performance Messaging.  The study compared the marketing strategy of IBM's WebSphere MQ Low Latency Messaging (LLM), 29West's Latency Busters Messaging (LBM) and Solace Systems' Content Router.  Whilst the study contains full details for each of these vendor's strategies, the calculated "Market Mean" reflects the mean value of each of the marketing elements across those 3 vendors.

Lustratus produces this intelligence as part of the Lustratus REPAMA Segment Analysis Study and we obviously plot the positions of each of the vendors in addition to the mean, but this is relatively simple exercise to conduct for yourselves.  The question is what do you do once you know the mean?  Do you look to be outside of the mean?  The religion of "differentiate or die" suggests you probably do.  But the idea that what "most" of your competitors are doing must be right, suggests that you might want to simply track them.  Look at the Vertical Market Segmentation chart above and ask yourself whether you want to aim outside of Financial Services?  Well it might be an uncontested space, but at the same time their might be a lot of tumbleweed.

The answer of course is that whilst you can compute an "average" marketing strategy, the right strategy for your organisations depends on many factors.  Aiming at the average vertical market and at the average ideal customer might be valid strategies because it suggests that is where the rest of the segment feels there is opportunity.  But if you attack these prospects with "average" messaging and "average" differentiation it will be death by a thousand ho-hum cuts.

Either way, knowing what your competitors are doing is a good place to start.

Dan.

"We all target the same prospects"

I hear this a lot in the high-tech marketing world.  Organisations tell me that when they are prospecting they and their competitors target the same organisations and the same people. 

I want to highlight how assumptions like this can be very dangerous in competitive marketing.  It's lazy to assume that your closest competitors are saying the same thing to the same people as you are targeting.  

Sure there are major similarities in most highly competitive markets but when Lustratus studies the protagonists and their relative offerings in detail we always find significant clear blue water between them.

We developed the REPAMA methodology to bring a little clearer insight into competitive marketing.  We've recently completed a REPAMA Segment Analysis Study (SAS) on a subset of the High Performance Messaging market.  There are some really interesting things going on at the moment in that market.  Some really clever software and network architecture techniques are being used to remove the delay between one application sending a message and another application receiving it.  In addition dedicated FPGA hardware is now being used to replace software servers.  The primary beneficiary of this capability (minimizing the delay) is the financial markets where saving time exchanging information can literally translate to millions of dollars lost or gained.

We were asked to look at IBM's WebSphere MQ Low Latency Messaging (LLM), Solace Systems' Content Router and 29West's Latency Busters Messaging (LBM).  Prior to starting the analysis we were led to believe that "we all target the same prospects".  Whilst it is true that there is massive similarities between the strategies of the respective competitors, there is also significant, subtle as well as not so subtle difference. 

The image above (click for a larger image) shows the ideal target customer as inferred by the language of the vendor in their outbound marketing activities.  This puts a lie to the argument that "we all target the same prospects".  In reality, there is a great deal of similarity in the industry of the target prospects (with the exception of the channel business of Solace Systems) but the specific targets differ significantly from company to company.  Relying on a lazy assumption would almost certainly result in ceding market opportunities to the competition.

OK so I'll close out with two very interesting charts (well they're interesting if you're a marketing analyst). 

The image above (click for more detail) shows the features and benefits that they various vendors ascribe to their products and services.  As you'll see, there is a high degree of correlation between them.  In fact you would assume that when they are in front of a prospect, each of these individual companies would be saying much the same thing and that their arguments would be indistinguishable from each other.

That may well be true whilst they are talking about the technology and its features.  There is certainly a high degree of correlation.  However, once the vendor interprets these features into benefits that the business would enjoy, the picture shows a different story. 

Here, in the diagram above (click for more detail), we can see significant differences in the value ascribed to the respective products by their respective owners. 

What does this tell us?

Well if the vendors sell on technical features to technical people then there are similarities that will likely only be resolved by comparing the products in detail and perhaps looking at the specific performance through benchmarks or evaluations.  However if the vendor sells based on the value of the technology to the business in business terms, then we can see that the vendors are very different in their approach.  As part of the study we also infer the place where the vendor looks to start the sales process as well as their likely commitment to value-based selling.

So "we all target the same prospects" might be true in once sense but it takes a detailed analysis of the picture to really infer how organisations actually take their products to market. 

Lesson?  Never assume that you know what your competitors are doing just because you know what you do.  They will be different.  Better?  Worse?  Well that depends. But knowing that there is a difference is the first step in building a "better" story and selling more. 

And remember "different" makes it easier for prospects to make decisions.

Dan.

Focus and 8 fingered gloves

I remember using the phrase "You're marketing 8 fingered gloves" with a client a few years ago.  And without wanting to show any disrespect to those unfortunate or fortunate enough to have more than 5 digits on each hand, I think it illustrates perfectly the dilemma that some technology vendors face. 

Imagine you are the VP Marketing for Octodigit Inc.  - a manufacturer of 8 fingered gloves for men.  Your market is pretty small.  Really small in fact.  Getting new customers is quite a chore and involves some incredibly detailed research, focus and a lot of leg work.  However, when you find a prospect - an octodigit (or whatever the term is) male who works outside who has cold hands, he'd buy from you in a flash.  You alone understand his unique problems.  You have the solution (the 8 fingered glove) to his problem (cold 8 fingered hands). 

But then again our friend has other possible solutions.  No, there isn't another 8 fingered glove supplier.  Octodigit Inc. really can claim to be the marketing leading supplier of wool-based hand apparel for the discerning multi-digit male.  However our 8 fingered friend is looking for a solution to his cold hands problem, he's not necessarily looking for a glove.  So he could consider a coat with big pockets as an alternative.  And there is even the option of surgery which would fulfil a life-long dream of being able to wear five-fingered gloves like the majority of the rest of the planet. So our friends at Octodigit Inc. still have some selling to do but chances are they'll be successful - but only once they've managed to find a prospect. 

The original client who prompted the 8-fingered glove anecdote was marketing an object database, the target audience for which were self-selecting.  They were highly technical individuals who were object software fanatics, they needed to persist objects to a store that maintained object properties and object-oriented principles and they needed to be able to carry out lightening fast searches of the resultant database.  However, as is often the case, the business making the purchasing decisions behind these techies just wanted a cost effective solution to store and retrieve complex, related information. And as time went by, plain old relational databases were "good enough" for the task.

The result for my client was that once the fashion of object-orientation had passed, their sales slowed and they had to put their energies into other areas and recognise Object Databases as the 8 fingered niche they really are. 

I admire focus. As an early market software vendor it takes huge courage to turn your back on other potential markets.  As a result I really admire companies that have the self-control and self-confidence to stay focussed on their audience, their value proposition, their messages and their prospects.  The challenge for vendors therefore is to segment the total addressable market in such a way that there is enough of an addressable audience for whom you are a perfect solution but at the same time ensuring that the market size gives enough opportunity for growth. 

And remember that a coat with deep pockets is a valid solution to the problem of cold 8-fingered hands.

This topic came to mind recently when I looked at Solace Systems and 29West who each take a different approach to high performance messaging.  One vendor certainly appears to be marketing a 5 fingered product that appears to a very broad audience, but the other, whilst not sporting 8 fingers per hand, certainly looks like a good 6 to me.  I'll post the details on them both soon.

Dan

Post script.  I know the image has 6 fingers and not 8 but unsurprisingly since Octodigit's sad demise finding a picture of a glove with 8 fingers has proved a little difficult.  I also know that the depending on where you originate from, the thumb may not constitute a finger.