Lustratus REPAMA - Strategic Marketing Analysis

Standards-based marketing - the homogeneous effect of software standards - Part 2

A History Lesson

Continuing on from this blog entry, I've decided to create another mini series of blogs, this time looking at the difficulty of differentiation in markets where software standards have created homogeneity amongst the offerings of the protagonists.   

So first a little bit of a history lesson...

I surfed the wave of middleware resurgence in the early stages of the new millennium and had great success marketing various technologies. Initially, working with some of the best people in the industry, I introduced SonicMQ to the world while at Sonic Software (now Progress Software).  This was a market proposition that was heavily based on standards. Well at least we made sure that the debate was about standards - JMS in this case.  My ex-colleague Dave Chappell was talking to developers all over the world and writing books that led the debate on JMS and other standards.  We de-positioned the competition as being complex and proprietary and we enjoyed great success. Obviously the competition reacted by introducing their own JMS-based products, a move which we expected but by then Sonic had introduced the Enterprise Service Bus (ESB) and had moved the debate on to standards that enabled a service oriented architecture (SOA).

All the while I was creating marketing programs that stressed Sonic's commitment to standards and, by implication, I was de-positioning other vendors' technologies as being the Devil's spawn due to their reliance on proprietary features. "How," we asked "would organisations ensure interoperability between their, and their trading partners' infrastructures if they didn't conform to the emerging standards?"

Sonic enjoyed great early market success with this strategy as did the other vendors in the JMS and related markets such as Fiorano, Cape Clear, PolarLake, et al.  These vendors punched above their weight and went into battle and won against some of the industry's heavyweights.  All of this was made possible by their commitment to standards.  These companies existed because a) standards made it easier for them to build software and b) customers wanted to move away from vendors' costly and proprietary solutions and ran with open arms to this new breed of standards-based middleware.

For a while the old school vendors held out.  Claiming that their incredibly feature-rich offerings justified their proprietary methods and high price tags because they could do more "stuff".  But the slow move towards standards gathered pace and eventually turned into an avalanche as, helped by maturing software standards, first the least established proprietary vendors and then latterly the market leading EAI vendors validated the market by introducing their own standards-based products.  Sonic had won the battle.

But then the problems became obvious.  When your product is based around freely available specifications and built with the help of common libraries that are available to others, how can you differentiate when your competitors are using the same specifications and standards?  If the software must conform to these standards, differentiation, at least at the product level, becomes a challenge.

Obviously not all animals are equal so some degree of difference exist between standards-based products.  During customer evaluations these come to the surface.  In fact in the sales situation where prospects can be engaged in detailed discussions about a technology and the company that is behind it, it's actually not too difficult to draw distinctions between different approaches.  But within the marketing organisation, where we're tasked with creating a credible, unique space in our prospects' minds by placing 130 words on a web site, how can you do this?

It's not easy and there are no hard and fast rules or guarantees but I'll take look at some of the techniques that can be used to achieve this in upcoming blogs.

Danny Goodall.

An ESB is an ESB is an ESB - n'est pas?

As the saying goes, if it looks like a fish, smells like a fish and tastes like a fish then the chances are that it is a fish.  Likewise by any measure the products in the recent REPAMA study into the ESB market segment certainly appear to be ESBs but why then is none of the vendors content with describing their products simply as an "ESB".

As the REPAMA Marketing Element Distribution (MED) chart below shows, the ESB vendors in the study (Microsoft ESB Guidance 1.0, Oracle Service Bus, Progress Sonic ESB, TIBCO ActiveMatrix Service Bus) used the following adjectives, qualifiers, modifiers and euphemisms to describe the offer category of their "ESB".

• A loosely-coupled messaging environment
• A comprehensive Enterprise Service Bus offering
• Architectural guidance, patterns and practices
• Messaging-based Enterprise Service Bus
• Enterprise-class SOA Enterprise Service Bus
• High performance, scalable SOA integration backbone
• Lightweight Enterprise Service Bus
• Mediation Layer
• Enterprise Service Bus

Words are wonderful things and marketing organisations as experienced as these wouldn't use words without a reason.  As mentioned previously in this blog entry, when a category becomes as ultra-competitive as the ESB space, vendors will attempt to segment and re-segment the market on their terms and the product category is the first place they start.  

As a result, there is a raft of valuable competitive intelligence in this simple list of words above (visualised by wordle.net).  Why is each vendor modifying the product category in this way?  Answer that question and you'll gain an insight into the particular position within the ESB segment that each vendor is trying to own.

Danny Goodall.

Enterprise Service Bus (ESB) REPAMA findings published

Just a A quick note to say that the REPAMA Segment Analysis Study into the Enterprise Service Bus (ESB) has been published on the Lustratus.com site.  The ESB is a segment that Lustratus knows well as we've carried out strategic marketing work for most of the key protagonists at some point.  That said, there were a number of surprises - chief amongst these was some of the competitive differentiation strategies that we saw as well as the markedly different approach taken by Microsoft.

The study reverse-engineered the go-to-market strategies of the following vendors and products:

• Microsoft ESB Guidance 1.0
• Oracle Service Bus
• Progress Sonic ESB
• TIBCO ActiveMatrix Service Bus

In reaction to client feedback, we've published two sets of reports with this particular study   I've created a summary report that contains a management summary of the state of vendor marketing strategies in the ESB market segment as well as the results of the full-blown REPAMA Segment Analysis Study. 

Danny Goodall.

Part 8 - The "OUR PRODUCT [has this unique selling proposition] element from the positioning statement

Throughout this series of blogs I've been examining the format of the positioning statement that we use in our REPAMA consultancy and analysis services.  In this final entry in the series I'm going to close out by looking at the pay-off, the crescendo, the exclamation mark at the end of the positioning statement - the USP or unique selling proposition.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A [product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

The USP is one of those over-used terms that has found friends at all levels of responsibility throughout sales and marketing organisations.  I've heard everyone from line of business managers, to sales people to CEOs use this term.  Everyone feels they have a handle on it and over time the term has come to generically mean "differentiator".  Whilst I'm in favour of strategic marketing concepts finding friends throughout an organisation, there is a considerable amount of subtlety and craft missing from the "common" understanding of the USP.  So let's start with some definitions and perhaps a little bit of history.

Rosser Reeves - what a great name.  He sounds like he should have been some shady 1940s London underworld gangster.  But he wasn't.  Instead he was an advertising man, one of the first in fact and it was he who brought us the concept of the unique selling proposition.  For him, its use and definition were rooted in (print) advertising and as such the formal definition assumes that the USP is being used in some form of promotional campaign.  There was also an implied assumption that we were dealing with business-to-consumer advertising too.  Since then we've broadened the definition to think of it as any general proposition made via any medium (adverts, web site, emails, phone calls, face-to-face conversations, etc.) whether that be business-to-business or business-to-consumer based.  Whilst the use of the USP may have changed, the disciplines and thought processes used in its creation are still valid today.

The definition below is taken from the book Differentiate or Die (survival in our era of killer competition) by Jack Trout and Steve Rivkin.  In this book the authors refer to Rosser Reeves' 1961 work Reality in Advertising from which they quote Reeves' three-part USP definition:

1. Each advertisement must make a proposition to the consumer.  Not just words, not just product puffery, not just show-window advertising.  Each advertisement must say to each reader "Buy this product, and you will get this specific benefit."
2. The proposition must be one that the competition either cannot, or does not, offer.  It must be unique - either a uniqueness of the brand or a claim not otherwise made in that particular field of advertising.
3. The proposition must be so strong that it can move the mass millions (i.e. to pull over new customers to your product).

As I mentioned above, whilst many of these disciplines are still valid, there is now so much competition in just about every market category, segment and sub-segment that being "unique" is increasingly more difficult.  So it's no surprise that many of the USPs I see when reverse-engineering vendor's positioning statements are often just SPs - with little or nothing unique about them.

When looking at the USP in the context of the positioning statement its important to remember that the "OUR PRODUCT" positioning element is typically paired with the "UNLIKE" section.  The UNLIKE element sets up the main alternative and the OUR PRODUCT element describes the USP that the alternative doesn't have.  As shown below:

UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition]

The biggest challenge in defining this element of the positioning statement is in defining that unique space (number 2 on Rosser Reeves' list above).  With product categories, segments and sub-segments so granular across many markets and with ultra competitive competitors competing within each of those segments, finding a position that only you can own is not the work of a moment.  In addition its important to remember that we're not just trying to find a unique space, but a unique space that has compelling value to the consumer/customer as outlined in Reeves' point 1 above. 

In reality what tends to happen (in my experience of the infrastructure software space) is that the first entrant to the market (first mover) aims for something unique which is then "flatteringly" copied by later entrants to the market.  To later entrants this makes sense as they want to have some of the pie of the first movers and are happy to trade uniqueness for being perceived as similar to the market leaders.  Understandably it makes sense to "look" like the first mover.  This tends to lead to what I call "standards-based marketing" and simply creates a homogeneity of messages and propositions amongst the market protagonists.  This leads to little real differentiation and leaves prospects studying highly technical features to really understand the differences between products.

Examples

• OUR PRODUCT removes up to 20% of data centre costs whilst reducing your carbon footprint
• OUR PRODUCT starts reducing risk from day one.
• OUR PRODUCT not only integrates with your existing systems but also provides comprehensive management capabilities
• OUT PRODUCT ends world hunger (Well maybe not - but you get the idea)

Real world example

(If you have a specific interest in the SOA and ESB market you might find this section interesting...)  In our latest REPAMA Segment Analysis Study we looked at how a number of ESB vendors approach the market.  The vendors and products studied included Oracle's Service Bus, Progress Software's Sonic ESB, TIBCO's ActiveMatrix Service Bus and Microsoft's ESB Guidance.  Reverse engineering these vendors' positioning statements gave some interesting insights and as an example I've listed Microsoft's USP section below:

OUR PRODUCT provides a superset of ESB functionality, extending the ESB pattern to include modelling and execution of business rules, workflow, and adapter integration.

Here Microsoft selects a pretty strong USP.  They claim that UNLIKE other ESBs they provided extended functionality.  Whilst other ESBs may legitimately claim that they also offer extended functionality, they are not actually making that claim.  So this certainly passes Rosser Reeves' test above. 

The basis for this claimed USP is that their ESB Guidance is underpinned by their BizTalk product - which features broader functionality than other "simple" ESBs.  I think this is a pretty well constructed USP - despite the fact that the rest of Microsoft's marketing for the ESB Guidance is pretty poor.  Perhaps this is a function of the non-product nature of ESB Guidance.

In summary when defining the OUR PRODUCT element we're looking to communicate a specific benefit that will be delivered that none of the competitors or alternatives are able to offer, all of this couched in language that compels the prospect to take action.

So that's it for the OUR PRODUCT element and for the positioning statement series too. <More information can be found in the Lustratus REPAMA Guide here>

Danny Goodall.

BTW It should be borne in mind that Lustratus' focus is on the high-tech software industry and whilst positioning as a concept will transfer to just about any business to business industry, many of the classifications we use assume that we're dealing with a technical audience for infrastructure software.  So please bear that in mind for your own industry.

Book recommendation

I'd like to recommend a book today.  I came across it a couple of weeks ago and whilst I don't know the author, it felt like it was written by someone I knew.  It's well worth a read if you're in product marketing, product management or strategic marketing planning.  It's called quite simply "Product Marketing for Technology Companies" and it's written by a guy called Mark Butje. 

If you're in a hurry then it's a simple as that.  Go buy the book.  You won't regret it.  If you want to know why I recommend it.  Read on.

I've been developing marketing strategies for many companies for many years.  My thinking, methods, exercises and strategies have been influenced by many fantastically talented people over the years but probably one of the earliest influences on my thinking was a guy called Tim de Boer.  Why?  And how is all this related to a book by Mark Butje?  Well I'll tell you.

"I used to be a software development manager but I moved into marketing when I realised that despite developing the best software in the world, I was still having to let people go.  I couldn't reconcile having fantastic software without commercial success.  I wanted to change that."

I'm paraphrasing so apologies for the quote marks, but that's roughly what Tim de Boer told me when I first met him about 10 years ago.  I could relate to this completely having found myself in marketing from a technical background and also having had less success than I had expected with some pretty excellent software.

Tim is the Dutch CEO of the international marketing consultancy Pleon.  When we first worked together Tim was working for a company called Schoep and van der Toorn, which later became Brodeur which in turn became Pleon. I was working as European Product Marketing Manager for Progress Software at the time and Tim's company was helping us with internal business and strategy planning.  We were also helping some of our software partners to develop better business strategies.  Tim and I ran a number of planning workshops together and I really enjoyed the experience.

Anyway, as I was reading the book by Mark Butje I remembered thinking that some of the contents were very familiar.  I conduct a lot of similar exercises with our clients that he advocates in his book.  I couldn't figure it our until I read the foreword where Mark thanks a certain Tim de Boer.  It appears that Mark also worked for Brodeur and presumably for/with Tim.  So that explains it.

A good book full of practical exercises and detailed processes that will help anyone planning offensive, defensive or business-as-usual product strategies. 

Dan.

Running the REPAMA rule over mainframe SOA

I've just finished the REPAMA Segment Analysis Study and Marketing Efficacy Assessment on High Performance Middleware.  It's just going through our buddy checking process at the moment so now I can get on with the next project.  We're about to start looking at vendors of integration and SOA solutions on the mainframe with the REPAMA methodology. 

It's really interesting (well if you're a marketing analyst) when you start a new project.  You have to leave a lot of your preconceptions behind.  If you're reverse engineering the marketing strategy from a vendor's go to market material, it's quite wrong to form firm opinions about the results before you even start the analysis. 

I mean, if I were to ask you who you think would be the typical target organisation and audience for a vendor of mainframe integration and SOA solutions, you might think that they'd be in the picture above. 

That said, from the work I've done so far this image couldn't be further from the truth.  The mainframe; the only truly secure and reliable platform for some organisations, or the incumbent legacy platform that it isn't cost effective to move away from for other organisations.  Either way it's a bottleneck for truly effective SOA projects. 

With so much data of record and critical processes residing on the world's mainframes, an organisation's ability to bring the mainframe into broader integration and SOA projects in as quick, simple and cost effective way will determine the success or otherwise of many broader, non-mainframe SOA projects. 

The mainframe is now at the hub of many SOA projects as is the software that makes it possible to securely integrate the mainframe world into "mainstream" enterprise computing.

Anyway the vendors on the long list so far include:  

IBM (CICs, IMS, WebSphere, RD for System Z)
DataDirect’s Shadow (Progress Software)
GT Software’s Ivory
SOA Software’s SOLA
Hostbridge
Software AG
Microfocus
Rocket Software

Some of these might not make the cut as we're aiming to look at about 4 of them in total.  I'll keep you posted on the early findings over the next couple of weeks.

Dan.