© Dwight Foster, Insightly CRM
NEWS AND INFORMATION
© Dwight Foster, Insightly CRM
As global markets change and become more "local" so the demands on B2B will increase to meet these new opportunities. However, do it right and the reward of increased sales can be achieved. Consider some of these ...
© Saxum Commerce
With cloud, mobile, social and big data advances all happening at once and at lightning speed, how will shifts in technology impact the way software businesses are run?
Ginni Rometty, CEO of IBM, recently made a prediction that three key areas will change everything. These three areas are:
- Data analytics will drive business decisions
- Social Networks will impact on value delivery
- Individuals will no longer be aggregated
Here is a look at how these may affect the modern software vendor.
Data Analytics – “business decisions and opportunity creation”
As potential customers use technology more and more in their assessment and purchasing processes as opposed to traditional face-to-face sales relationships, so the use of data will become more important to understand markets, drive content delivery and to predict futures.
Data will also be used to understand what customers have already consumed and where there are opportunities for complimentary products and services.
For example, a customer may have purchased a financial ERP solution but they are a manufacturing organization so they should also have MRP applications in their solution mix … where they do not currently have this, so analytics would highlight the opportunity.
This could be reinforced by analyzing the movements of individuals in the organization as they review content on a site … they would be downloading brochures, reviewing certain products, viewing videos, etc. If this happens to be MRP related material, then the analytics would increase the rankings of the opportunity.
While these networks in years past were predominantly used in the social lives of individuals, as those people start to permeate into the business world, so is the use of social networks becoming integral to their day-to-day business activities.
These social networks will be used for finding information, rating products and services and getting feedback from existing customers.
Business software vendors will need to drive more of their content to these social networks so that it is readily available to their potential customers.
Individuals – “the depreciation of aggregation”
Rometty put it like this ... “What you will see with rapid data and social sharing is the death of the average and the introduction of the era of you”.
As opposed to using aggregated segmentation to target customers, the data and social changes together with the emerging technology to use these will allow business to interact at an individual level and cater to their specific needs and wants.
In the business software arena this is desirable and necessary as no two businesses are identical and so the solutions created need to be unique for each customer. As such, the successful sale demands this “individual” approach.
These changes will need a cultural and mindset shift as well as the adoption of new technologies and systems (for example Ecosystem Management Platforms) to support the business software vendor through these changes.
While the challenges would exist, the opportunity to unearth new opportunities would be substantial.
© Saxum Commerce
While In-App purchasing is a growing and successful sales channel in the mobile consumer world, is it a viable strategy for enterprise software vendors?
To keep this article in context, we will define an enterprise system as one where it is in use by a business and there are 5 or more users of the application.
Well the jury is out on this … and based on early evaluations, with the different drivers surrounding enterprise software, it is unlikely to be as effective. What is more, if this is done at the exclusion of having a traditional product marketplace, then the sales model is more of a risk than an opportunity to the vendor.
Here are some of the reasons why:
New deals: For new customers that do not currently have any of the vendors products they cannot do any In-App purchasing as they have no App in which to do it! Where the solution requires a mix of products of the vendor and add-on products, then a marketplace rich in content and information is essential for any hope of selling to this customer.
The purchase process: At the time that an application is required, there is typically a requirements process that is completed. Once done, then a search and evaluation exercise will get underway from which a purchase decision would be made and the internal purchase workflow would come into play. This does not augment In-App as a sales channel.
Who makes the decision: The user is, in most cases, not the person that will be making the decision about a purchase and is also not likely to be the person looking for new functionality. As such, the In-App adverts are wasted on this user.
Trusted advisors: Where the enterprise uses a vendor’s partner for their purchases, implementation and support, they will in most cases turn to them as their trusted advisor for assistance in finding, selecting and purchasing new applications.
Volume: Typically, In-App adverts deliver products relevant to the section of the system in which the user is currently working. Any number of products could be available to enhance this part of the system and so the sheer volume and lack of the ability to filter this based on the users defined requirements would render the adverts ineffective. It is likely that the user would still navigate to a content rich marketplace to exercise a selection process.
A frustrating distraction: If there is an “off” button, it is highly likely that users will turn off the distracting adverts. If there is no “off” button, then it is likely that the help desk will be receiving a few calls to find a way of doing it.
In-App purchases of enterprise solutions may generate some demand by catching the right user at the right time with the right message but given the challenges, would need to co-exist with other sales channels and models and is unlikely to be the model that actually generates the enterprise add-on application sale.
© Saxum Commerce
This is being driven by a changing landscape in which the industry is seeing new sales channels, new deployment methods, new revenue drivers and new business models which in turn are affecting the rest of the business operations including marketing, channel management and accounting.
Once the vendor has recognized their need for an ecommerce solution to manage their changing business, they then face the challenge of figuring out which of the myriad of options out there best suites their business.
This is especially difficult for vendors that have an established and complex ecosystem of resellers, ISVs, end-users, distributors and skilled resources as the ecommerce solution selected needs to keep these entities involved in the transactions.
The following chart shows the types of ecommerce features needed by a channel focused vendor and the ability of different types of systems to deliver them.
|Self Help Portals supporting the whole ecosystem including partners, distributors, ISVs, end-users, branches, “crowd”|
|Multi-Channel Sales model support including Web, Mobile, In-App, Channel|
|Multi Party Transactions to include multiple trading partners in a single transaction||
|Multiple Product Types including Mobile, On-Premise, SaaS, Hosted, etc.|
|Complete product collateral including video, PDF, HTML, presentations, spreadsheets, etc||
|Fully integrated across all components i.e. each of the features listed in this table should be integrated with each other to provide a single cohesive solution|
|Ecosystem monetization e.g. membership fees, product placement fees, skills search, advertising etc.|
|Ecosystem activity integrated to social networks|
|Drives traffic back to the vendor|
|Vendor shares in revenue|
© Saxum Commerce
While the promise of new and large revenue streams for business software vendors is driving huge investment into developing cloud strategies it seems that there is much being overlooked in the process.
Building the cloud product strategy is just the starting point with a number of areas being sorely neglected and which will come back to haunt technology executives in the near term
As a part of a comprehensive roll-out, the following represents some of the items that should be addressed …
Most vendors will have existing legacy customers that will take time to cross over to cloud and there will still be a substantial demand from new customers that wish to stay with on-premise solutions.
The challenge here is how to build a hybrid sales channel that caters for both cloud and on-premise customers and where the customer can engage in an individualistic way.
For example a customer may want to review, test and purchase an on-premise solution through the web whereas another may want the same solution but wishes to engage a channel partner from the outset. The end result is the same but the path to the result is substantially different and needs to be catered for in the sales model.
For a cloud solution to gain substantial traction, the solutions available need to be comparable to those which are available in the legacy on-premise solutions. These solutions are made up of both the products from the vendor as well as complimentary products from their ISV partners.
If the ISV products are not made available in the cloud offering, it is likely that the customer will be unable to construct a solution to meet his requirements and thereby the vendor would risk losing the client and will not be able to convert existing customers to their cloud offering.
To achieve this, the vendor must provide the tools necessary to help the ISV integrate and deploy their products together with providing the relevant ecommerce solutions to promote, sell, invoice and collect payment for the ISV products.
While the vendor website in the past was adequate being an information delivery tool, moving to cloud products creates the demand for the website to now also provide ecommerce capability for the consumption and management of the products and ecosystem.
These ecommerce solutions are not the typical B2B or B2C type web-store solutions as they need functionality that will provide a solution to functions such as subscription billing, system provisioning, license management, multi-party transaction splits (e.g. commissions for channel partners), multiple sales channels, multiple deployment methods and more.
The ecommerce solution would also need to provide the ability to list and sell both the vendor core products as well as the ISV complimentary products to afford the customer the ability to build their perfect solution … much like an advanced AppStore.
At the same time, the cloud introduces an environment which puts distance between the customer and the traditional channel however the services provided by the channel are essential to the successful implementation of solutions for the vendor’s customers and unless the channel is engaged, the vendor will need to set up their own service resources which at the end of the day is very likely to set off any benefit derived from offering cloud products.
So while the topics covered here are not exhaustive, they illustrate the issues that need to be considered in conjunction with any cloud product strategy.
© Saxum Commerce
To achieve this, software vendors need an integrated ecommerce, marketplace and operational platform that would provide the relevant functionality to:
© Saxum Commerce
Yosemite, Mountain Lions and Software Vendors I recently visited Yosemite National Park and was at awe with the immensity and beauty of it all. It was also a touch daunting at the thought of how big it seemed and how small I felt against it.
I then came across an article in the Yosemite Guide publication, which got me thinking (please read the article “What should you do if you meet a mountain lion?” attached) … In our insignificant world of enterprise software we have our behemoths like SAP, Oracle, Microsoft and IBM. They are all-powerful and will be around forever, taking control of the world below them. You just have to look at the struggling HP to see how these entities can survive massive disruption.
These organizations could be seen as the Mountains of Yosemite.
However, our world of business software has Mountain Lions who can hunt and by being agile, smart and hungry can find a space where they can flourish and build great success. By embracing change and in many cases creating disruption of their own, they carve out of the rock a sector that they can own and grow. Some great examples of this would be Salesforce.com, Box, Xero, Atlassian and Splunk.
Then there are the small un-funded software businesses with great people and ideas but are still finding their way. These businesses can be successful by following in the footsteps of other startups and by transitioning from the “hunted” to being a Mountain Lion. These small businesses need to do everything they can to be perceived as being stronger than they are. The web has delivered to them the best opportunity ever to “fight back” and to be seen as a relevant entity.
By using the ecommerce (subscription billing, marketplaces, portals), social marketing (LinkedIn, Twitter, Blogs) and web hype (“if it is on the web it must be true”), any business can create a presence and attract new opportunities. Just look at the explosion of subscription and mobile solution demand and it is easy to see how a small software vendor can take advantage of a disruptive environment.
Besides creating great products, smaller software vendors can use technology to grow their own businesses and should be actively embracing those web tools that can help them achieve it.
Of course many of these ideas will still fail because not every idea can be a winner and because not everyone can effectively execute but even those that fail can still have their moment of fame through the web.
From a different perspective, for this exact reason and from the consumer perspective, they have to be careful how they select their “web” suppliers … but that is a different topic.
© Saxum Commerce