How to Evaluate the Impact of Gartner’s Magic Quadrant on the Fortunes of Early Stage ISVs

Early stage ISVs are not likely candidates for Gartner’s Magic Quadrant. So anyone interested in specific technology genres covered by Gartner with Magic Quadrants should plan on digging deeper if a list of all important players is to be compiled.

The CMS Wire blog recently provided a list of some of the most important criteria Gartner reviews before deciding to include an ISV in a Magic Quadrant ranking.

In a post titled Gartner Names Wise Choices for Workplace Social Software. Here are some of the criteria:

  • An ISV must employee at least 80 people, worldwide
  • ISVs with gross product sales less than $12 million, in the specific technology genre covered by the Magic Quadrant, will not be considered
  • Neither will any ISV with a customer list of less than 20 paid organizations representing 5K paid users

In this writer’s opinion, Gartner’s Magic Quadrant is more of a curation of ISVs worth consideration by larger businesses, than anything else. A listing in the “Leaders” quadrant by no means identifies an ISV as particularly “innovative”. It may be helpful to think of the ISVs in this top right sector of the famous Gartner Magic Quadrant graph as the most widely adopted of the ISVs included in the ranking, with, perhaps, an extensive set of features.

Early stage ISVs should neither expect to be included in a Magic Quadrant, nor, in this writer’s opinion, agree to be considered for inclusion in one of these rankings. Technology consumers are not often aware, neither as to the criteria Gartner applies as one of these Magic Quadrants is assembled, nor as to how Gartner applies one of these rankings. So early stage ISVs passed over, but mentioned, are oftened incorrectly considered “also ran” entries.

Maintaining an under the radar posture is preferred. It may even make more sense to continue to decline opportunities to participate in a Magic Quadrant ranking after achieving the critical mass required of each participant. Why risk inclusion in any quadrant other than Leaders, given consumer misunderstanding of what the rankings actually mean.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


How to Use Teleprospecting to Compile Information About Competitors

Teleprospecting can be used successfully to compile information about competitors. Roughly speaking, there are 3 different methods worth considering:

  1. Covert activity, commonly referred to as G2 calls
  2. Overt activity
  3. and discussions with Prospects/Customers

Covert activity
We like the definition of G2 as presented on the Acronyms dot com web site. IMB Enterprises, Inc. has provided customers with G2 gathering services, exclusively from telemarketing and teleprospecting engagements, since the mid 1980s. The purpose of these calls is to find out as much about a competitor’s public offer, success rate, etc under the guise of an incoming inquiry to a competitor’s sales organization.

Overt activity
Very useful information about competitors can also be gathered from overt activities, including telephone calls placed to parties identified in success stories, case studies, and white papers published by competitors. In our experience these individuals will often share very useful information about important topics like return on investment (ROI), implementation experiences, factors that drove a purchase decision, and more. Of course, it is mandatory that teleprospecting agents selected for this type of activity exhibit the poise and demeanor required to maintain productive conversations with senior managers at enterprise class businesses. Simply scripting conversations and requiring tight adherence to these scripts will not be enough to ensure success.

Discussions with Prospects/Custoers
IMB Enterprises, Inc. has successfully conducted customer surveys on the behalf of clients. Usually these clients have chosen to implement a channel distribution strategy. Therefore, the customers and/or prospects that we have contacted have been selected from what was formerly known as a value added reseller (VAR) channel. In these cases it is quite useful to script these conversations. Further, the script ought to be put together from a set of questions specifically designed to “connect the dots” with regards to important questions; for example, the real impact of reseller margins as compared to consulting fees, and/or the real impact of competitive channel marketing — meaning VAR vs. National Acounts vs. OEM (white box) — marketing programs.

We also have very recent experience developing testimonials and/or case studies from end users. The promotional information collected through these conversations can certainly be expanded to include important insight about competitors. The real work is to “weave” these questions, with skill, into a broader discussion so that is inviting to all parties, not the least the customers, or prospects on the other end of the telephone.

If you see a value for intelligence-gathering for your business, and see the value in using third party services to successfully capture your objective, please consider IMB Enterprises, Inc. Please call Ira Michael Blonder at +1 631-673-2929 to further a discussion. You may also email Ira at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


On the Value of Sampling Market Opinion for Product Marketing

Product marketing should include market sampling as a core function. By requiring market sampling for any/all product development notions, tech businesses can avoid “solution without a problem” product development syndrome. Of course, useful market sampling results depend upon the collection of information from a set of respondents to a consistent, uniform series of questions. Therefore, it makes sense that conversations with market respondents be scripted. Finally, whoever undertakes the responsibility for market sampling must be entirely comfortable with telephone conversations and reliable as regards strictly adhering to scripts.

Implementing a market sampling function brings product development closer to a customer or market “centric” position. We favor this type of position for product development as there is little danger (in our experience) for businesses that successfully design products that markets are after. Further, markets often ask for product reliability and task transparency rather than high end features. Therefore, a further benefit of maintaining and exercising a market sampling function is that product development can focus more on building a “minimal acceptable model,” which promises more profits. Why design in features that a market is not after?

But what is a tech innovator to do if a contact list is not at hand to provide the basis of sampling a market? We think the best remedy for this condition is to look to introductory (cold) calls in the aftermath of a press release, or other publicity event. Naturally, if a business lacks telephone contacts, it may very well lack an opt-in email list; therefore, we suggest some sort of public announcement (can be as unobtrusive as an article in a trade publication) as a means of “softening” recipients in advances of an unsolicited telephone call.

The subject of this unsolicited telephone call needs to be technology, rather than brand, specific. Recipients of market sampling calls will prove to be much more receptive to calls about trends than they will be about specific companies. Call scripts should adhere to this same industry focus. Member lists liked LinkedIn can generally be looked to provide the contact names, at no charge, that must make up the contact lists for sampling.

If your business would benefit from taking the pulse of your market, you should certainly build a market sampling function. This function is perfect for outsourcing. We have considerable experience in this area, both in the areas of placing these unsolicited calls and producing useful scripts that deliver the information businesses require to make useful product development decisions. Please telephone Ira Michael “Mike” Blonder at +1 631-673-2929 to further a discussion. You may also email Mike at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Innovative Technology Compensates for Clumsy Sales and Marketing

Technology innovators targeting enterprise business and other large organizations in the public and not-for-profit sectors should look to product development for substantial, defensible barriers to competitor entry. Entering today’s ultra competitive markets for traditional solutions (for example, ERP) requires highly sophisticated sales and marketing. Human resources with the right skills for these sales and marketing requirements may not be available to start ups. Nevertheless, a very keen eye for products is required to determine precisely the right markets for product development.

It’s worth spending a brief moment simply highlighting the very high level of sophistication required of successful enterprise sales personnel selling into highly competitive markets. Merely a careless harsh phrase, or a momentary lapse in judgement can push promising sales opportunities off a cliff. Please understand that in these highly competitive markets, the true driving force is not the product or service, rather, it is precisely the sales person who is the driving force for customer interest. Betting a business on sales personalities is at best a highly risky endeavor and, at worst, a strategy with a highly limited upside. This mediocre scenario plays out clearly in the contract technology consulting business where a limitless number of businesses compete to deliver human resources with the same skills to enterprise customers. In fact, it is not uncommon in this marketplace for the same IT consultant to be present to the customer by multiple consulting firms.

Better to take the time to study markets very closely to determine aspects of IT operations and processes that are broken and in sore need of repair through open ended conversations with enterprise prospects who are directly involved in these very same procedures. Building specific fixes for one or more of these aspects can pay off with the required revenue to launch a promising business. These niches do not have to be dramatic. Rather, through engaging in carefully structured conversations with industry participants information can be gathered that will illuminate probable marketplace value for a method of fixing an aspect or two of an important IT system. Better to take this approach than to be on the lookout for exceptional sales personnel who can flawlessly handle any high pressure engagement with prospects. In our experience these sales personnel are in very short supply. Engaging with a talented individual can end up to be a very costly exercise for an early stage business.

If you are embarking on a new business effort and understand the value of sampling marketplace opinion about IT operations and processes, then we would like to hear from you. Please contact Ira Michael Blonder at +1 631-673-2929 to further a discussion. You may also email Mike at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Plan on an ongoing intelligence gathering effort on competitors within your business plan

In order to formulate a competitive market plan it is essential to collect accurate information about competitors. Perhaps for this reason alone, with regard to developing an entirely valid understanding of the business operations of competitors in a market, it makes sense for businesses of any size to include an ongoing intelligence gathering activity in the business plan. Without an accurate understanding of the costs that competitors incur bringing products to market, the history of their client engagements (successes and failures), and, finally, the features and benefits of their product offerings it is not possible to assemble key points in a competitive strategy, for example:

  • the unique value of your product and/or
  • a method of producing a product at a cost substantially below that of competitors

It is indicative of the few businesses that actually succeed vs the number that are started that, unfortunately, little substantive information is collected on the above two points beyond mere conjecture. Where the health of a business is the matter at hand, it is not adequate to act based upon conjecture. An accurate sense of specific market realities must be assembled if some level of success is to be achieved.

We offer this type of competitive intelligence gathering service. We welcome requirements to assemble an overview of a specific marketplace, to formulate a picture of methods at competitors and, finally, to put together a thorough analysis of the product offerings from specific competitors. Typically we summarize the results of this type of work in a management report suitable for presentation to executive management and/or a board of directors. We highly recommend that we have an opportunity (through an engagement) to take our work a step further, working closely with a CEO to identify opportunities to craft unique offerings for specific niches. Finally, we will happily analyze product development systems to identify areas were costs can be reduced to meet the challenge of achieving the position of lowest cost competitor in a given market.

If you believe that your market opportunity is substantial, then why not allocate financial resources to ensure that you have made a best effort at achieving the position in the market that you are after? Literally thousands of dollars in unnecessary business expenditures can be saved by focusing first, and foremost, on formulating an accurate picture of your competitive position in a market. The resources required to put together this picture constitute a bargain when compared with the cost of operating largely ignorant of competitive offerings.

Please call Ira Michael Blonder at +1 631-673-2929 to further a discussion about your need for a competitive market analysis. You may also email Mike at imblonder@imbenterprises.com

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Peculiarities of marketing software to large groups in the public and private sectors

A radically different computing era was ushered in around 1985 with the advent of the so-called personal computer. Pertinent to this post is the observation that the personal computing era was characterized by a shift from cloud computing resources (in the form of distributed mainframe computing and share computing via mini computers marketed by Digital Equipment Corporation, Tandem, etc) to the desk top where increasingly more powerful computing devices were brought to market, the use of which proliferated throughout Fortune 1000 and large public sector business workspaces.

Today, as Forrester Research has recently pointed out, market interest in computing resources appears to be shifting back to cloud based offerings, or at least the hype would have one think so. Regardless, software technology innovators marketing software to large computing workspaces need to speak to

  • present day realities
  • public message topics of discussion
  • and, finally, assumptions as to where markets are headed

Our bet at IMB Enterprises, Inc. is that the safest assumption is that enterprise class business and public sector buyers will very carefully scrutinize any purchase requests that pop up over the next 3 years as the result of pervasively unsuccessful efforts to capture value from software purchased and already implemented.

This dearth of success on the trail of value does not necessarily spell terminal bad news for software technology innovators looking to establish a toe hold in large workplaces. Rather, the lack of success compels businesses committed to marketing software to frame marketing communications around the best obtainable set of financial information about specific, verifiable, cost savings to be realized from the implementation of specific pieces of software by enterprise business customers. The more specific the better. In all cases the bottom line needs to be, clearly, specific amounts of money that will be saved as the result of purchasing and implementing software. Hype just won’t do. If a year or two is required to genuinely collaborate with the marketplace to determine the specific costs that can be saved, then so be it. Make sure that the resources are at hand to support the business through the fact finding period without pushing the market to accelerate the pace.

We have excellent recent experience working with software technology innovators committed to global business markets. We welcome opportunities to elaborate on our experience. Please call Ira Michael Blonder, IMB Enterprises, Inc at +1 631-673-2929 to discuss your product and your near term market plans.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Sometimes Ready Fire Aim makes sense

Sometimes it makes sense to implement a ready, fire, aim product development strategy. For example, to test out market interest in various product types, or to gauge the readiness of a market to purchase products and solutions for otherwise unqualified needs.

Maintaining product direction in an entirely pliable state, capable of moving any which way to meet market needs, while engaging with prospects on ostensibly clear sales discussions is a great posture to gather lots of useful information about product perception, first hand. This stage should be incorporated within any product marketing plan as it makes little if any sense to finalize product performance without some reliance on the perception and interest of representatives in the marketplace. Usually this type of information is gathered through prospect and customer interviews, but with ready, fire, aim it is possible to go even deeper with prospects and, thereby, gather the most credible response from the market. The fire stage, after all, is actually mustering selling efforts around products. A go to market strategy on the fly.

Notice that I stressed maintain products in an entirely pliable condition. If, on the other hand, products are rigid, then engaging with prospects in this fire stage prior to aiming sales efforts can provide little more than an excuse to either race into product development, or to abandon the business plan altogether. Therefore, but have your funding in place before entering into this type of marketing strategy to ensure that you realize the most benefit from this exercise.

With regard to using the fire stage to determine present buying interest in products and services, this technique can jump start revenue building–no doubt about it. Even more compelling, this stage does not require the support of a full complement of marketing communications tools, etc; therefore saving cash strapped technology innovators precious cash. Further, marketing communications materials can be assembled and published entirely on an as needed basis, which may make the most sense from a funding perspective.

Despite these advantages, I counsel caution with regard to implementing this approach. By no means should your firm look half baked as the result of proceeding in this direction. Be sure, as ever, to stay under the radar while you navigate these turbulent waters.

Call us for further information on the above points. IMB Enterprises, Inc. has considerable recent experience implementing lead generation programs for complex sales of IT products and services to global business. Please telephone us at +1 631-673-2929 to discuss your products and needs. We are particularly interested in technology products–software or hardware–as most of our experience has been garnered from working with software and computer hardware manufacturers.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Develop a Thorough Familiarity with Competitors to Keep Market Development In Perspective

I never counsel clients to enter markets where competitors cannot be identified. The only exception, as I see it, is a market that services a niche set of needs that have arisen from a larger, more familiar and competitive market.

For 95% of innovative technology businesses, markets without competitors are, at best, not worth entering and, at worst, traps capable of sinking entire businesses. Most so called break through products are really, when analyzed, solutions to needs that are either confined to very small markets for which a first provider with little capital may be able to capture most of the business, or to needs that have been underestimated or otherwise unknown (in a television interview aired in January, 2012, Bill Gates communicated some of his own “shock” at the great success that became of the Microsoft that he and Allen founded. He noted that neither of them ever planned on the massive size of the market that would develop for personal computers). With regard to the former type of opportunity, once ensconced in the leader position, a pioneer will be able to fend off competitors “late to the dance”. But these types of opportunities are seldom readily apparent. Usually a first provider of this type will be founded by someone who has personally spent time as a user in the market, knows the need very well as well as the solution.

With regard to the latter, big splash break through products require lots of capital, not only for developing products and solutions, but also for developing and nurturing markets themselves. Therefore, these opportunities are usually the stock and trade for Venture Capitalists with deep pockets. Not the everyday turf trod by under the radar technology driven businesses.

Therefore, business plan 101 dictates that chosen markets must include the participation of competitors as a demonstration of the viability of the revenue potential of the market to feed the business. Once these markets have been identified it is essential that as much information be gathered about competitors as possible. This information will prove to be invaluable when it comes time to select a distribution model for a product, service or solution. After all, why leverage a channel distribution strategy if no one else in your vertical is doing the same? They may well know something that you do not. In this case, what you may not know may be able to hurt you in the form of dollars spent needlessly on intermediaries who no one else is using to win their business.

I am presently working with clients facing just this type of challenge. I welcome opportunities to discuss specific needs. Please call me at +1 631-673-2929 to further a discussion.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


A Post on Rising Above the Commodity Fray

I met recently with the president of an Independent Software Vendor (ISV) with software offerings built with the Java® programming language who expressed disbelief when I let him know that his prices are too low. I later learned that when I took a break to leave the meeting he asked of a trusted colleague “what does he mean that our prices are too low? Each of our competitors are priced into our range? How can we raise our prices?” I should state that this ISV offers a product in the online marketing category, a piece of software that delivers lots of reports about search engine placement for products by keyword, etc. I should also note that I’ve written elsewhere in this blog about the controversy implicit to online marketing for the sale of complex products to global businesses and other large organizations; specifically does marketing online get you anything besides a big dose of commoditization if you’re offering complex products with intangible value to an uneducated prospect? From my conversation with this CEO I must say that the same question applies to vendors of online marketing software, as well.

All well and good, but what’s relevant to marketing and selling big ticket software and other technology products to global businesses and other large organizations in 2012? Specifically that the old adage, “a sales person without a sense of urgency is no sales person at all” rings true. With a product with an entry level price of $199.95, lots of competitors, and a limited universe of prospects, I am of the opinion that the price of this software has to go up, one way or another, if this CEO’s business is to grow to any size of significance. I should also add that this ISV is located in Eastern Europe, where the cost of living is substantially lower than the cost of living here in the States, but no matter. Opening offices internationally will be an inevitable step forward for this ISV if/when they do manage to grow; therefore, at some point they will have to pay out higher salaries which will put lots of pressure on the present pricing model.

When I returned to our meeting I attempted to educate this CEO that he should think about turning some weaknesses of his product into the foundation of his higher pricing model. Our discussions illuminated the fact that this ISV assumes that its customers are presently only utilizing 10% of the capability of their product. My response was, is there a common additional value that most any customer can derive from the remaining 90% of the product that is under utilized? If there is such a common additional value, then why not take a proportion of that additional value (in hard dollars and cents) as an entirely justified additional cost for customers who want, need, and “must own” the remaining 90% value that is presently alluding them. Of course, then let’s take that proportion and build it into the pricing model of the product.

There is an old time precedent to this strategy. Just look back to the mid 1980s when Xerox Corporation successfully sold high end laser printers into the global business market against HP LaserJets. How did Xerox bring off these sales against a competitor with drastically lower prices? Xerox took the steps to integrate its laser printer products into the predominant computing environment of the mid 1980s–distributed mainframe and PC computing. Fact was that their printers had the necessary “hooks” to print mainframe data where HP’s products did not. It doesn’t matter that the required connectivity was rather trivial. What matters is that Xerox had it and HP did not. Xerox made the sales at a higher price point within a heavily commoditized market.

I specialize in these types of discussions. If you have a technology product with some broad market appeal for global businesses and other large organizations, I’d like to hear from you. Give me a call at +1 631-673-2929.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


VCs that Know Nothing

On Friday, December 9, 2011, Ms. Maha Ibrahim of Canaan Partners was interviewed by Ms. Emily Chang on Bloomberg West. Bloomberg West is a television show that is broadcast Monday through Friday of each week. The topic of conversation was Zynga’s IPO. Zynga is in the business of manufacturing online games. Online games are far removed from the type of complex product that I have focused on in this blog. Further, online games are not the typical product of interest to enterprise business customers. Nevertheless, this pair went on to posit absurd claims about the enterprise market for software, seemingly out of nowhere.

Ms. Chang opened the gate when she asked Ms. Ibrahmi to speak to “what does [SAP’s acquisition of Success Factors] say about traditional software’s business model?” When Ms Ibrahim jokingly mentioned that there was “no reason to have client server software anymore” and, further, that there was no longer any need for enterprise business to bring in “large Ernst & Young or large integration firms for years to help you to implement your software for your employee base” as the result of the supposed revolutionary nature of “cloud” computing, I needed to put type to page on this one. The fact is that Ms. Ibrahim is, in fact, dead wrong.

As I’ve written elsewhere in this blog, “cloud computing” is nothing new. Just reflect back on computer timesharing which was a business with some heft to it back in the mid 70s and 80s. Yes, mid size companies opted for the economies of scale represented by buying time on systems that were otherwise out of reach. Further, large businesses leveraged IBM mainframe computing systems via 3270 terminal emulation to deliver the features of mainframe computing to desktop PCs distributed across the enterprise. But in neither case did these early instances of cloud computing displace on premises computing systems. In fact, with the advent of the Graphical User Interface (GUI) and powerful PCs, timesharing went the way of the dinosaur.

“Own your own” has always been the preference and always will be the preference for those businesses with the financial capability to do things the right way. Cloud computing for enterprise business is simply a side track to be taken while ISVs take necessary steps to improve their ability to deliver bonafide value to customers. The real “meat” to this “motion” for under the radar innovators is still to be found in the enterprise sale of precisely the multi year engagement that Ms. Ibrahim claims is now gone for ever.

Not so, says Mr. Marin Petry, CIO of Hilti Corporation. Mr. Petri participated in a panel discussion of the definition of Cloud computing hosted by the Tuck School at Dartmouth in October of this year: Risk and Rewards in Cloud Computing. Mr. Petry clearly states ” . . . I do not understand cloud computing as I basically turn the key on my data center and said ‘that was it’ and everything else that I’m doing from that point onward is coming out of the cloud. We do actually at Hilti do quite a bit with cloud computing but that is peripheral additional applications that I do not have to run in my data center. I still have my data centers. I still run SAP in my data centers. I still run Microsoft Office in my data centers. That will not change in the next few months. That might change over the next 10 to 15 years, very likely, in different steps, but that’s not reality today. I do not believe that the larger industries today can close the data centers because everything is coming out of the cloud.”

Another participant in this panel discussion, Mr. Olivier Gouin, Group CIO of Nestlé speaks of a private cloud that is specific to a larger enterprise business as opposed to a public cloud that is “more appropriate” for smaller businesses. He cautions against a “wrong perception” that cloud computing is antithetical to the typical method of implementing software (meaning via data centers) for larger businesses. Rather, the sole utility cloud computing represents for the enterprise is specifically within an entirely private “cloud” that, Mr. Gouin makes clear, ought to be separated from external facing websites. Finally, Mr. Gouin voices his opinion that the public Internet is still not ready for “prime time” as the result of the insecurity of data communication. Perhaps in a “few years” that may improve, but not the case at present.

I know that Ms Ibrahim is entirely off the mark. I would be happy to elaborate. Call me at 631-673-2929 to learn more.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved