The Impact of the Cloud-Subscription Model on B2B Software Marketing

When you talk about digital disruption on businesses, the music industry, television and movies usually come to mind.  You can subscribe to music services and subscribe to media channels to get your content on-demand and in a pay as you go model.  Which is all very friendly for the customer and end-user.   Think Spotify, Netflix and Hulu.  As enterprise software moves to the cloud, that same subscription model comes into play.  Enterprise customers pay as they go and can leave at any time.  Trying out cloud software is often a very easy proposition making the evaluation of an online application a five minute commitment and some convenient clicks away.  

Think about the benefits being ascribed to cloud software: easy to use, low/no software maintenance costs, no infrastructure commitment needed.  Red Hat and its Enterprise Linux support contract follows a subscription model but the cloud takes it one step further.  And in this customer-friendly software model, the business and marketing implications are huge. 

The days of slick marketing with product sheets and lavish screen shots along with over-promising features and benefits have passed.  I remember back in the days of the first dot.com boom.  Vaporware and bug-ridden software in pretty boxes being marketed aggressively and with little regard for facts.  At the core of the cloud and subscription model is the shift of power to the customer and end-user.  Any gaps or weaknesses in your offerings and the marketing behind it will be uncovered quickly once the prospect tries your cloud software out.  And if not discovered through the customer trial, it will happen after purchase resulting in negative customer feedback available on social media and other online forums.  How long do you think that customer will stay with you if you inaccurately market your offering?  

The cloud software business is really about a new customer-centric software delivery model.   And in the end, it really makes a lot of sense.  Better products designed to work more effectively for customers and delivering promised results.  And there’s no hiding as your customer moves through the consideration and purchase cycle.  You have to earn their business every day, before, during and after purchase.  That includes all stages of your marketing and a refreshed emphasis on software consumption and customer retention plans. 

Earning your customer’s trust isn’t always easy but in today’s world of cloud-based software, it’s never been more important for B2B technology marketing….  

Ron Wen

www.linkedin.com/in/ronwen

Persuading the Financial IT Buyer and Influencer Persona

In the world of open-source software, you’ve got an interesting marketing challenge.  You’ve got a near commodity product that’s freely available online.  You add a layer of customer services and support on top of it to monetize the software for the business.  But as you can guess, the traditional open source customer is pretty frugal.  Linux often entered the workplace though the back-door with techies trying it out and as they test out the platform, it slowly embeds itself into the organization and becomes a valued part of the IT infrastructure.  At that point and time, Linux is now a production platform and requires enterprise support (Red Hat Enterprise Linux) and the associated tools. 

But if I could distill the traits of the typical open source customer its: bright, demanding and cost-conscious.  These are techies that were ambitious enough to try a new technology, smart enough to find its value with the expectation of getting things to work at little or no cost.

In my role as a Product Marketing Manager for Red Hat’s Systems Management team back in 2009, the challenge in front of me was to convince Red Hat customers to upgrade their environment to Red Hat Satellite, a Linux system management tool that they would pay for.  Tricky, huh?  The customers barely want to pay for the software and associated support.  How can we get them to now pay for more advanced tools?  

Linux system administrators have all sorts of free, hand-made tools at their disposal. And while they do work, they aren’t built for larger Linux environments and don’t scale well.  But Red Hat Satellite system management is built to work well in enterprises.  The tool had a great reputation from a technical standpoint but how do we convince customers to purchase?  While social proof can be powerful and influential, I knew there was need to convince the financial IT persona.  Most likely an IT Director with sign-off authority for $25 – $50k.  Enter IDC Analyst group!

IDC is a well know IT analyst group that covers a variety of technology areas and also creates custom whitepapers for companies.  Over the course of four to six weeks, we engaged IDC and contracted them for a whitepaper covering the ROI of Red Hat Satellite System Management.  IDC had a published methodology of pain-stakingly interviewing a set of customers to determine time saved and the appropriate dollar amount that could be attributed to this time-saving tool.  Working with the Red Hat customer reference team, we introduced IDC to our larger customers who engaged their IT teams for interviews.  Work on the body of the whitepaper continued separately with a subject matter experts while I managed the overall project.  

By late 2009 we were wrapping up production and the final draft of this whitepaper and it was impressive.  Savings with Red Hat Satellite were significant and now quantified in a whitepaper from a well-respected third-party group through data from independent companies.  Financial proof from a wide variety of successful companies who would mirror our potential customer base.  An asset that a director could take to his/her VP to secure budget for the purchase.  And IDC had another published piece of their authoritative knowledge in the Open Source system management realm, wins all around.  

I remember when we first started up this project with IDC and my boss Bret asking me whether we needed to spend a 1/4 of our yearly marketing budget on this piece.  To which I replied, absolutely yes.  After my departure from Red Hat, I heard this ROI whitepaper had become a key marketing asset for convincing the financial IT buyer at Red Hat and had closed numerous deals over the past two years.  Yes, sometimes you can get a great marketing story for the price of a candy-bar.  Other times you need to pony up the money and pay for a marketing asset with an analyst group that will return its own ROI, many times over.  Technology is only as good as how much it improves a business initiative or saves money, especially for a fiscally prudent IT buyer.  

Ron Wen

www.linkedin.com/in/ronwen

The Benefits of NOT Being the Smartest Person in the Room

Back when I was in business school at UNC Kenan-Flagler, I distinctly remember one day heading over to my locker to put away some of my gear.  Kneeling on the floor, next to my locker was one of my classmates and she had her head in hands, crying.  She had just gotten a C on an exam and it was the first time in her life.  And she was crushed.  Understand that in most business schools we’re talking about an academically competitive environment.  The average GMAT score at UNC KFBS was about a 660+ and the very top MBA programs average close to 700.  We’re talking about a roomful of classmates that are EASILY qualified to be members of MENSA.  In some cases maybe ALL of your classmates are at that level of academic achievement. 

My classmate was one of the younger MBA students in the program (24) and after years of being the smartest kid in her class, didn’t feel so smart any more.  I re-assured her that we all felt the same way in B-school and it was absolutely nothing to be embarrassed about.  Maybe it was my real-world experience that taught me that brains aren’t everything and sometimes you’re blessed to be working with smarter people than yourself.  She wiped her tears away, picked herself back up and I know that she would become emotionally resilient and things would improve for her over the school year.  

My experience after business school has been interesting in the fact that sometimes I run into people that WANT to be the smartest person in the room.  Everything about their presentation and demeanor speaks to trying to project that aura.  These people are rarely the most effective members in the organization.  I consider it a case of ego over-riding effectiveness.  By believing that you’re the smartest person in the room, you’re rarely capable of listening to others, learning from others and improving yourself.  And it’s rare when an individual can drive an initiative without the help of teammates and ideas from their side. 

Some people say that if you’re the smartest person in the room, you’re in the wrong room!  And I’d have to agree because it means either you’re not going to grow in the organization and/or you’re unwilling to see the value in your teammates and learn from them.  And maximizing the value of your teammates is key to extremely effective organizations in today’s highly competitive world.  

In marketing where we are in the midst of working with many groups (Product Management, Sales, Creative, Finance, Customers) it’s really important to LISTEN, learn and lead with those around us.  We usually aren’t the smartest person in the room and that’s ok.  And if you are the smartest person in the room, you should still listen and learn.  Everyone knows a little more than you about something!  Teams that put their egos aside and collaborate effectively are often the most productive. For anyone not named Stephen Hawking, it’s probably in our best interest to NOT be the smartest person in the room.  

 

Ron Wen

www.linkedin.com/in/ronwen