cloud, cloud computing

Mass TLC Cloud Summit: Top 10 Key Points from Keynotes

The Mass TLC Cloud Summit, “Doing the Cloud Right:  From the Real Practitioners,” was held on October 8.   A central theme echoed by each of the three keynote speakers was the extent to which cloud computing empowers business users to operate with the speed and agility they need, sometimes in spite of their colleagues in IT.  Here is a summary of each presenter’s discussion, a link to their presentations, and my Top 10 list of their key points:

Ariel Tseitlin, Director of Cloud Services for Netflix, led off the session.  Netflix uses an Amazon based public cloud to deliver 1 billion hours of content per month to 38 million viewers in 40 countries.  Netflix has built a highly scalable and available platform as a service to run this network, and has open sourced it as Netflix OSS.

Netflix is committed to moving all of its corporate systems to SaaS.  Email now runs on Google, instead of Exchange.  Expense management runs on Workday, instead of Concur.  Document sharing runs on Box, instead of on file servers.  Credit card and big data analytics will be the next to move.  Netflix’s reliance on SaaS and open sourcing of their OSS indicate their focus on their core business.  Their core competence is not in operating networks or running applications, but in delivering content.  And now, having made history as the first non-TV network to win an Emmy award (for “House of Cards” director David Fincher), Netflix can also add content creation as a strength.

Here are some of the key points from Ariel’s presentation.

  1. Prevent application failures by designing them right.  With a highly available architecture providing redundancy at multiple levels, Ariel focuses on the high probability failure modes.   Application failures are at the top of the list.  Ariel’s approach to reducing the likelihood of application failures is to ensure that developers run the applications they write, and take responsibility for any failures.   After a few wake-up calls in the middle of the night, application developers learn how to write more robust applications.
  2. Find problems and fix them fast.  Since Netflix has content as its core competence, not network operations, they don’t want to have to scale their 120 member operations team linearly as their service grows.  Pay people to build very smart alerts, not to monitor screens.  Build redundancy into the underlying infrastructure, so you can monitor services, not instances.
  3. Raise efficiency by using batch processing in low  resource consumption periods.   Netflix accounts for 1/3 of all North American peak period downstream internet traffic.  Peaks are about 10 times the trough.  Netflix uses Amazon reserved instances for base footprint and augments with bursting as needed.  They fill the troughs with batch loading.

Allison Mnookin, VP & General Manager of Intuit QuickBase, was next to take the stage at the Mass TLC Cloud Summit.  She discussed how cloud computing empowers business users to respond to customers by doing custom application development on their own, rather than having to rely on IT.   Her presentation built on the concepts of such business users, which Gartner refers to as  “citizen developers,” and Forrester calls “HEROs” (Highly Empowered and Resourceful Operatives).

In her presentation, Allison shared the results of Intuit QuickBase’s survey of 903 information workers in firms with more than 100 employees.

  1. 50% are acting on their own to build their own business applications, up from 33% in 2009.  Those feeling empowered by doing so grew directly from a reduction on those formerly feeling disenfranchised.
  2. Employees would consider switching jobs to find an environment with more freedom to develop.  28% of all employees would consider switching jobs, and 50% of so-called “rogue” employees would.
  3. Do-it-yourself (DIY) custom app development is significantly faster that relying on IT.  68% of DIYers take less than a week to design a custom web app, whereas 72% say it would take more than a month if they were to rely on an internal development team.

Michael Skok, General Partner, North Bridge Venture Partners was the last speaker to take the Mass TLC Cloud Summit stage.  His presentation covered results from the North Bridge 2013 Future of Cloud Computing Survey, conducted with GigaOM Research.

  1. The three drivers of overall cloud adoption, scalability, agility, and cost, remain consistent relative to last year’s survey.  There ARE differences, depending on the type of cloud service.  Organizations focused on agility and innovation are respectively 5x and 4x more likely to invest in SaaS than in legacy infrastructure.  For IaaS, those focused on shifting CAPEX to OPEX are 2.5x more likely to adopt IaaS than to invest in legacy infrastructure.
  2. As for inhibitors to cloud adoption, security concerns are easing (46% vs 55%), but cost concerns are growing (28% vs 20%).  The key concern is total cost of ownership, not just conversion of infrastructure CAPEX to OPEX.   68% say cloud has about the same or better TCO than traditional IT infrastructure, with the cloud advantage being predictability of spend, not necessarily the straight cost advantage.
  3. Cloud is currently used more extensively for business activities than IT activities.   At least 50% of respondents use four business applications (file sharing, business productivity, CRM, social) in a SaaS model.  No single SaaS IT application (backup, security, systems mgmt, help desk) was used by at least 50% of business respondents.  But this is trend will change, as six of the seven highest growing SaaS applications are in the IT area (big data, mobile, systems mgmt, back-up/DR/BC, help desk, security).
  4. The PaaS market is getting squeezed from above by SaaS players and from below by IaaS players as each build APIs to extend the capabilities of their offers.  This trend is consistent with the focus on APIs by both Intuit and Netflix.

What do you think?  Check out the presentations.   If you attended the MassTLC Cloud Summit, did you come away with different key points?  Let me know what you think.

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Managed Services Pricing – Put Your Customer on the Winner’s Podium

Determining the ideal managed services pricing model can be complex.  MSP University summarizes the advantages and disadvantages of six popular pricing schemes, including per-device, per-user, à la carte, and “pick 5.”   MSP Mentor points out that service providers should consider break-even cost, staff expertise, competition, and regulatory issues, along with value to the customer, when determining managed services pricing.

Multiple models and a broad range of factors can be overwhelming, but establishing pricing and packaging is a lot easier when you crisply focus on your customer and the problem they are trying to solve.  For marketers at B2B companies, whose products are the basis of managed services offers, this means thinking along two dimensions.   First, you must help your immediate buyer – the executive or product manager at the MSP responsible for launching the managed service and driving a profitable revenue stream.  Second, you must help the customers of this buyer understand the benefits of the managed service based on your solution.

Marketing to the first buyer goes without saying, but some may question whether it is in their charter to help their service providers market to their customers.  Surely that is the job of the marketing team within the service provider itself, as they are the ones who best understand their own organization’s differentiators, competition, and customer base.  Besides, B2B marketers need to move on to the next campaign, product launch, or demand generation activity.

Put Your Customer on the Winner’s Podium

Age Group Winner, 2013 Ashland Olympic Triathlon
Age Group Winner, 2013 Ashland Olympic Triathlon

Rather than take this narrow view, marketers should put their customer on the winner’s podium.   To win, the service provider must ace the marketing mix as they target their customers.   The 4Ps – product, place, price, and promotion – are tightly coupled for a managed service, and as the vendor, you are in the best position to help the service provider articulate the value proposition and competitive advantages of the technology underlying their managed service.

The podium also reinforces the benefits of a tiered managed services pricing scheme like “Gold/Silver/Bronze.”  Large service providers, such as CSC and Sprint, and smaller providers like Technology’sEdge™ and Beringer Associates use a tiered approach.  Doing so helps in several aspects of the marketing mix:

  1. Resists commoditization:   Unlike per device or per user pricing schemes, which reduce the value proposition of a managed service to a simple cost comparison, a tiered managed service pricing model helps justify premium prices for the extra value of higher tiers.  This helps reduce customer churn and enables more effective up-selling and cross-selling.
  2. Differentiation vs. the Competition:  The product is a combination of the service provider’s staff expertise, SLAs, brand, and the technology on which the service is based.   But every MSP touts its highly trained staff, secure data centers, and redundant power supplies.   It is the software behind the back-up and recovery, monitoring, or security service that can differentiate among providers.   While the lowest tier may provide the base level of service that is common across service providers, the higher tiers can leverage more advanced software capabilities.  For example, in managed network services, “bronze” may provide customer notification of outages, whereas higher tiers can provide proactive notification of degradation, the impending approach of a network capacity constraint, or the ability for the customer to run their own reports.
  3. Differentiation vs. In-house IT:  A prospect’s IT staff is often an MSP’s key competitor.  Although a managed service may free up IT staff to work on more strategic projects, IT leaders often resist giving up control.   Service providers can align their lower tiers of service to the capabilities of their prospects’ in-house IT staff, and use the higher tiers to demonstrate the extra value of more advanced functionality not available with current staff.
  4. Enables freemium business models:   In today’s market, customers expect to be able to try a service before they commit to buying it.  A tiered structure can provide basic functionality for free, as part of the lower tier of service, and time-bound access to higher value, higher tiers of service to entice customers to upgrade.

Although there are many approaches to managed services pricing, the benefits of a podium approach are clear.  What do you think?  If you are a service provider, are you getting the support you expect from the IT vendors on whose solutions your managed service is based?  If you are a vendor, are you helping your service providers find a place on the podium?  I’m interested in your feedback.

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Berlin Marathon Finish Line: An Embarrassing Example of Marketing and Marathon

Run a mile at a 4:42 pace.  Do it again.  And another time.  Repeat 23 more times.   That’s what Wilson Kipsang of Kenya did on Sunday, as he set the world record at the Berlin Marathon, with a time of 2:03:23.    With its flat course and cool temperatures, Berlin is known as the site for world record marathon runs, with eight world record times recorded there since 1998.

Now, however, it is also known as an unfortunate example of guerrilla marketing in endurance sports.   Just as Kipsang approached the finish line, a bandit promoting a high-end escort service on his t-shirt jumped out onto the course and broke the tape in front of him.  The rogue runner was apprehended, but he not only ruined Kipsang’s moment of triumph, he obtained for his business immediate, world-wide awareness. The finish line photos of Kipsang are spoiled by this interloper’s misguided and selfish promotion.  The notoriety the culprit has obtained for his business will surely far outweigh the penalty he will have to pay, while Kipsang’s years of dedication have been marred forever by a marketer’s short term, egocentric awareness campaign.

Take a look at the video of the finish.  As both a B2B marketer and an endurance athlete, I’m ashamed.  Some tactics just go too far.  This is one of them.  What do you think?Where’s the border between outlandish and inappropriate?


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Focus your cloud solutions on your power zone

Delivering Customer Experience Management via the Cloud? Focus on your Power Zone

CRM vendors are turning to cloud computing for customer experience management.  The Gartner Magic Quadrant for the CRM Customer Engagement Center highlights the approaches taken by vendors in this space, and illustrates the challenges in targeting both the enterprise and SMB markets.

Large and small companies have different product expectations for customer experience management solutions.  Comprehensiveness of function, integration with on-premise applications, complexity, usability, and time to value will vary in importance across markets.   But the differences go beyond the product.  Sales  and customer support structures for the enterprise market usually involve personal attention by a number of specialized staff.  Those oriented toward the SMB are more self-service, low-touch, and low cost.   As companies consider both ends of the market for their customer experience managment offerings, they should keep in mind their power zone – their core competencies, competitive advantages, and installed base.

Here are a few examples of vendor approaches from the Gartner Magic Quadrant.

Oracle solves this problem with two different solutions for each market.  RightNow Cloud Service (now branded Oracle Service Cloud), delivered in a SaaS subscription model, is listed in the Leaders quadrant, and is noted for its ease of installation, but it does not focus on industry specific processes.  Oracle Siebel CRM, just over the border in the Challengers quadrant, targets the enterprise market with its comprehensive functional coverage, deep industry expertise, and global network of professional services partner.   At the same time, its interface is considered non-intuitive and a bit dated.

Pegasystems, also listed as a Leader, is touted for its ability to model customer behavior and predict the customer’s next best action to execute in order to achieve goals.  It targets enterprises with a highly scalable platform and a range of best practices that spans industries.  On the other hand,  the rules engine and library of best practices may be more than SMB customers need, especially in markets that are less dynamic and complex.

KANA, listed in the Niche quadrant, addresses this issue with multiple business lines focused on government, enterprise, and the SMB, for which it positions KANA Express, its cloud based solution.   Gartner notes that with four business lines, KANA may be challenged to focus on priority areas.

Focusing on your target market is like finding the ideal triathlon distance.  Although races range from sprints of an hour or so, up to Ironman races of 10 times that, I’ve found that my sweet spot is the Olympic distance.  After a 1 mile swim and 26 mile bike, I still have plenty of speed in my legs to run the 10k at a 7:00 pace.  I’ve always done well at the Ashland Lions Olympic Triathlon, but have never seemed to crack the code on the next distance up, at the Patriot Half, a race twice as long.  There, no matter how conservatively I ride on the 56 mile bike leg, I end up walking a portion of the 13 mile run.  I’ve found it a challenge to train for races of radically different lengths.   With limited time, I can either do the speed work necessary to have a fast run at Ashland, or do the extra miles to prepare for Patriot.   A middle of the road approach to both doesn’t seem to work.

Focusing on your power zone may be a good approach for CRM vendors targeting both the SMB and the enterprise markets for their customer experience management solutions.    What do you think?  I’m interested in your feedback.

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runner mountains-78058_640

4 Reasons B2B Marketing is an Endurance Sport

I have to thank the Kevins.  For both the idea of creating a blog focused on B2B marketing, and for adding ultra-marathon to my world of endurance sports.  The identity of the Kevins is beside the point, but let me justify my claim that B2B marketing is an endurance sport with 4 examples.

1.  Both take disclipline.   Hours on the trails, roads, and pool, constant practicing of the various skills needed to excel in swim, bike, and run.    In B2B marketing, you need discipline to constantly refine the message to address just the right pain point for the customer, to respond to competetive threats, to understand what is needed to move prospects through the customer buying cycle.

2.  One discipline is not enough.  I grew up as a competitive swimmer, and in the early part of my triathlon career reveled in being first out of the water, only to have my euphoria crushed, as runner after runner passed me in the last stage of the race.  Similarly, it’s not enough for B2B marketers to have great awareness campaigns that draw prospects to your site; you have to have the product marketing skills to ensure their first experience with your free download is a positive one – intuitive user interface, easy to understand documentation & support, clearly articulated benefits.    If prospects abandon your free trial, you’ll never get them back.

3.  Hard work beats flash every time.   “Pink Beauty” was what I called my first bike.  It was a neon pink DiamondBack, a regular road bike, with mis-matched wheels and an old-school bolt-on aero-bar.  Nothing satisfied me more than passing people who took the easy road to success – spending big bucks on the latest titanium frame to save a few ounces, rather than getting out on the road and slogging through the miles.  Similarly, it’s easier for marketers to focus on latest technology and tricks rather than doing the hard work to truly understand their customer – the customer persona, their business challenge, the language they speak, and exactly what they need from your product or service to move through the buying cycle.   There’s no short-cut to putting in the time.

4.  Focus on goals.   What counts in a 100 mile trail run is your finishing time.  At the Western States 100, if you break 24 hours, you get that silver buckle.   Your split time at the Foresthill School (mile 62) doesn’t matter if you bonk in the last few miles of the race.   Trust me, I’ve seen it happen.  In B2B marketing, the goal is solving problems for specific buyers and selling your service.  Getting buyers to enter the buying cycle by effectively addressing a need they have, without enabling them to understand the advantages of your offer is like being in first place at mile 3 of a marathon.   Worthless.

What do you think?  I’ll explore these areas, and others in more detail, in coming posts.   Still not convinced?  Give me your thoughts.  It’s a long road and time goes by faster when there’s someone to talk to.

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