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.

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.

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!

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.

The positioning statement

Positioning

Happy 2009! I've been in debate with a number of correspondents about the layout and format of the positioning statement that we use in the Lustratus REPAMA-based research.  So I'm going to dedicate the next few blog entries to the positioning statement.  I hope to answer the following questions. 

• What is the positioning statement? 
• Why use a positioning statement? 
• What is the value of a positioning statement? 
• What is the format of a positioning statement?

The first thing to say is that over the years, having worked with some of the best product marketing people in the industry, I've seen many different approaches to positioning and equally many different formats for positioning statements. Each of them, to a greater or lesser extent has been valuable.  Most positioning statements that I've seen and used have had a very similar structure.  Although I have seen some that have been very different, in fact more like a what I would refer to as a value statement or a value proposition.  Perhaps I will revisit them in a future blog but here I'm going to focus on the classic positioning statement.  So as I've mentioned there is no single way to construct a positioning statement but Lustratus has settled on a specific format that captures and conveys the seven key product marketing elements and it is this format that I will concentrate on here.

What purpose does the positioning statement serve?

It's probably best to start with a definition for positioning first.  And if positioning statements are contentious then the the broader subject of positioning is even more so.  Whilst there are many views on this, for me, positioning is about creating a unique, compelling and defensible space in the minds of your prospects where your product/service and only your product/service sits.  Your ideal prospect must feel that you created the product/service for them alone to answer their specific problems and very importantly they must understand exactly how you are different/better that the alternative/competition.  Most product marketing professionals understand this well but as mentioned above, the development of positioning strategies and the statements that captures those strategies can take many different forms.

In my experience most positioning statements are designed to be internal tools for the development and then internal communication of a unique and compelling market proposition.  The positioning statement seldom gets used externally (with customers or prospects) in its raw format.  External marketing communications strategies are typically developed using the internal positioning statement as a guide. 

The positioning statement conveys the following seven product marketing elements:

1. The Ideal customer
2. The main pain that the ideal customer has or the negative situation they find themselves in
3. The name of the product
4. The name of the product category - the generic way to refer to the class of product (I often see this omitted)
5. The main benefit that the product provides and the key reason that the prospect should buy the product
6. The primary competition or alternative
7. The unique selling proposition (USP)

The format of a positioning statement

A positioning statement is natural language-based and should read fluidly and easily as a single sentence and yet should contain all seven of the marketing elements above.  This sounds like a complex task and to aid us in that development we use a specific structure for the statement.  This is shown below.

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].

So the "for", "who", "our", "is a", "that provides", "unlike" and "our product" elements give our positioning statement the structure it needs. 

An example positioning statement

An example positioning statement is shown below. It is taken from the upcoming Lustratus REPAMA Segment Analysis Study into the Enterprise Service Bus (ESB) market segment. In the study we reverse-engineer the seven marketing strategy elements of positioning statement (as well as many others) used by a number of the vendors in the ESB space - in this case the products examined were Microsoft ESB Guidance, Oracle Service Bus, Progress Sonic ESB and TIBCO ActiveMatrix Service Bus.  In the example below we've attempted to capture Microsoft's position and proposition in the ESB market.  

FOR Microsoft BizTalk Developers WHO are building solutions that leverage the SOA pattern OUR Microsoft ESB Guidance IS A loosely-coupled messaging environment THAT PROVIDES an infrastructure for enabling a service-oriented architecture UNLIKE traditional ESBs OUR PRODUCT provides a superset of ESB functionality, extending the ESB pattern to include modelling and execution of business rules, workflow, and adapter integration

It's notoriously difficult to be precise when reverse-engineering a vendor's positioning statement and sections like the "that provides" and "our product" are especially difficult to define precisely.  But hopefully it shows how an organisation like Microsoft might set about defining its approach to a particular market segment.

In the next several blogs I'll expand on the positioning statement and cover each of the seven elements in a bit more detail.  <More information can be found in the Lustratus REPAMA Guide here>

Other posts in this series

The Positioning Statement
FOR... positioning element
WHO...positioning element
OUR...positioning element
IS A...positioning element
THAT PROVIDES...positioning element
UNLIKE...positioning element
OUR PRODUCT...positioning element

Danny Goodall.

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)

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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.