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Running Running thethe Cloud GauntletCloud Gauntlet©©Capitalizing on Superpower AgendasCapitalizing on Superpower Agendaswithwith

Asymmetric MarketingAsymmetric Marketing

Joseph E. BentzelCopyright 2003-2011: All Rights ReservedContact: joseph.bentzel@asymmetri.com

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üAuthor: “Asymmetric Marketing: Tossing the ‘Chasm’ in the Age of the Software Superpowers” Amazon.com

ühttp://www.amazon.com/exec/obidos/ASIN/1419649809/1n9867a-20

Speaker IntroductionSpeaker Introduction

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üAsymmetri: Special Ops Marketing BoutiqueüProduct and revenue strategy for IaaS, PaaS, SaaS, DaaS, cloud ingredient and device providersüAlliances/biz dev/multi-channel sales/partner ecosystem development üPositioning/branding/messaging/content/go-to-market programs üM&A, capital acquisition and advisory board support

üFocus Areas: enterprise apps and infrastructure, security, smart devices, communications, mobility and app-stores, ad agency & media support, tech non-profits

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üQuestion 1-On Metaphor: The Cloud Gauntlet

üQuestion 2-On Strategy: Asymmetric Marketing: The Superpower Pattern

Presentation OverviewPresentation Overview

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üQuestion 3-On Startups: Targets of Asymmetric Opportunity (TAO)

üQuestion 4-On Superpower 1.0: The Market Containment Agenda

üQuestion 5-On Superpower 2.0: The Market Creation Agenda

üQuestion 6-On Superpower 2.x: Coalitions of the (Gap) Filling

üQuestion 7-ISVs Success Stories in the Age of the Cloud Superpowers

üQuestion 8-Cloud ISV Readiness Recommendations

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Q: Is there a useful metaphor to name and frame the alliance marketing

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and frame the alliance marketing challenge facing ISVs and other providers in the new cloud economy?

A:Yes. I call it the cloud gauntlet.

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1.“Cloud” is Most Contested Tech Market in 30 Years•Impacts IaaS/PaaS/SaaS/DaaS ISVs, ingredient providers & device vendors•Crosses/converges enterprise, consumer and emerging segments

2. Superpower 1.0/2.0/2.x Vendors in Fierce Rivalry•1.0: IBM, Oracle, Microsoft•2.0: Amazon, Facebook, Google•2.x “Coalitions of the Filling” (Apple/ATT, Force/Vmware, etc.)

The Cloud Gauntlet:The Cloud Gauntlet:A 21A 21stst Century Market MetaphorCentury Market Metaphor

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consumer and emerging segments •Can accelerate your alliances

(Apple/ATT, Force/Vmware, etc.)•Not about “deployment” options

3. Dueling Agendas in Play: Contain/Create/Close•Contain: Control installed base•Create: Enable new segment emergence•Close: Fill superpower cloud market gap

4.Cloud ISVs & tech vendors can run this gauntlet•Game rival superpower agendas to optimize alliance strategy•Accelerate revenue around targets of asymmetric opportunity (TAO)•Drive investment & exit events

When Clouds Collide

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Q: Is there a conceptual framework that can assist ISVs in formulating marketing

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can assist ISVs in formulating marketing & alliance strategy in the cloud economy?

A:Yes. I call it asymmetric marketing, the success pattern and best practices of the software superpowers.

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1. Startup Phase•Symbiotic attachment or alliance w/ pre-existing ‘center of market gravity’•Multi-dimensional value props rule•Targets of Asymmetric Opportunity drive market power (Inheriting the

2. Growth Phase•Product ‘sharkitecture’ drives natural monopoly and lock-in•Customer Barrier Management (CBM) drives increasing returns economics•Channel ‘colonization’ or walled

Asymmetric Marketing: Asymmetric Marketing: The Superpower PatternThe Superpower Pattern

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drive market power (Inheriting the DNA of big brother)

•Channel ‘colonization’ or walled garden distribution networks prevail

3. Diversification Phase•Cross-category roadmaps expand•Embrace/extend/expropriate potential market disruptors•Category regime change against best-of-breed ‘one trick ponies’ and stand-alone category gorillas

4. Dominance Phase•Supertail effects ($1 of superpower revenue drives $10 of partner revenue-inverse long tail)•Corporate venture fund & synergistic startup incubation•Systematic M&A & portfolio integration

Lifecycle of SW Market Dominance

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Q: Is there a simple way cloud-focused startups can initiate the practice of

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startups can initiate the practice of asymmetric marketing?

A:Yes. Engage “targets of asymmetric opportunity, i.e. the TAO of asymmetric marketing.

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1. Incumbent Embed•Microsoft: IBM PC OEM deal drives MS momentum•Google: Yahoo ‘powered by’ deal changes the game in sponsored search•Vmware: EMC portfolio incubation

2. Incumbent Enhance•Symantec: Pc add-on---anti-virus and system performance go mainstream•Adobe: Browser add-on (Acrobat, Flash)---RIA experiences come of age•Akamai: CDN as web performance

TAO of Future Dominance:TAO of Future Dominance:Targets of Asymmetric OpportunityTargets of Asymmetric Opportunity

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•Vmware: EMC portfolio incubation makes cloud virtualization a reality

•Akamai: CDN as web performance enhancement for content/commerce

3. Govt. DeFacto Standard•IBM: U.S Census Bureau deal•Oracle: CIA database deal•Cisco: core internet infrastructure (DARPA & CERN)

4. Crowd Catalyst/”Platformula”•Amazon: commerce affiliate network•eBay: buyer/seller marketplace hub•Facebook: social apps•Platformula: technology platform plus partner success formula catalyzes a ‘self-organizing system’

DNA Inheritance Drives Growth

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Q:What is the overarching strategic agenda of legacy software superpowers

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agenda of legacy software superpowers like IBM, Oracle and Microsoft in the cloud computing wave?

A: The Superpower 1.0 agenda centers on customer containment.

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1. Strategic Direction•Manage, migrate, monetize customer base lock-in via ‘private’ cloud•Co-opt “pay as you grow”, “virtual appliances”, stacks, proprietary clouds

2. IT Orientation•Foster app maintenance “earmarks” (70+ percent of IT spend)•Pander to IT ‘performance anxiety’•Construct ‘complexity’ barriers

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appliances”, stacks, proprietary clouds•Expand arms deals to hosting vendors

•Construct ‘complexity’ barriers

3. ISV Alliance Approach•Uncertainty rules the day•Partner programs in flux, re-org•Direct selling on the rise, channels contracting

4. Market Narrative•Sow confusion around public cloud•Reframe cloud to support 1.0 natural monopoly agenda•FUD and disinformation around security, scalability, integration, risk

Market Containment: Private Cloud

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Q:What is the overarching strategic agenda of new breed software superpowers like

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of new breed software superpowers like Amazon, Google and Facebook in the cloud computing wave?

A: The Superpower 2.0 agenda centers on market and ecosystem creation.

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1. Strategic Direction•Enable elastic enterprise computing•Mask app/infrastructure complexity•Empower new market creation via computing-as-a-commodity

2. IT Orientation•Target early adopters, innovators, market experiments•Eat own dog food•Liberate IT assets from maintenance earmarks

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earmarks

3. ISV Alliance Approach•Cultivate ‘capital efficient’ startups and micro-ISVs•Drive new ecosystem emergence•Foster DaaS (distribution-as-a-service or “app stores”)

4. Market Narrative•Evangelize public cloud benefits•Defeat Superpower 1.0 FUD•Showcase IT and ISV success stories•Enable new ‘platformula’ providers in the age of public cloud

Market Creation: Public Cloud

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Q:Beyond the Superpower 1.0 and 2.0 vendors, are new superpower species

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vendors, are new superpower species emerging?

A:Yes. I call them “Coalitions of the Filling”and they are engaging perceived gaps in the strategies of Superpower 1.0 and 2.0 vendors.

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Apple/ATT•Create unified center of gravity in mobility•Empower ISV success via ‘distribution as a service’ (the app store)•Rev-share on paid and sponsored apps (a

VM/Force•Target enterprise Java developers with public cloud offering•Mainstream the Salesforce PaaS•Force IBM/Oracle to cannibalize their

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•Rev-share on paid and sponsored apps (a platformula or ISV crowd catalyst)

•Force IBM/Oracle to cannibalize their maintenance revenue (earmarks)

Intel/McAfee•Redefine security around the “devices plus services” model•Re-incarnate Intel in non-PC devices•Mainstream Intel’s entry into SW industry

Ford/Nuance•Create vehicle connected services market•Transform auto into safe/smart communications client • Re-define voice services beyond the IVR

Coalitions of the Filling: Gap Closure & Pre-emption

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Q:Are there reference examples of ISVs successfully “running the cloud gauntlet”?

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successfully “running the cloud gauntlet”?

A:Yes. Let’s look at 4 innovator scenarios, including PaaS on IaaS, SaaS on PaaS, enterprise mobility/app store provider, cloud middleware provider.

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1. Superpower 2.0 Attach •Provide platform-as-a-service for Ruby developers•Leverage Amazon elastic computing model to scale a capital efficient startup•Capitalize on pre-existing ‘center of

2. Catalyze a Crowd•Free to get started (platformula as ecosystem catalyst)•Transparently priced to “pay as you grow”•100,000 plus apps running

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•Capitalize on pre-existing ‘center of market gravity’—Ruby Open Source Community

•100,000 plus apps running

3. Engage TAO: Facebook•Announce Heroku for Facebook App Pkg.•Attach to Facebook developer community•Gain public validation from Facebook mgt.

4. Summary•Compelling validation of Superpower 2.0 market creation agenda•Enterprise customers validate public cloud PaaS model, reject FUD•Success template for cloud PaaS startups leading to acquisition.

Heroku on Amazon

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1. Superpower 2.0 Embed •First prover for social gaming on the Facebook platform•Capitalized on pre-existing community and Facebook developer initiatives•Multiple apps, multiple audiences, same

2. Catalyze a Crowd•Free game access•Upsell ‘virtual goods’•200+ million players per month•On track for $500+ Million revenue

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•Multiple apps, multiple audiences, same platform

3. Engage TAO: Google, Apple… +•Google invests $100 million for game partnership•Apps for iPhone & iPad •Amex relationship turns loyalty points into revenue

4. Summary•Compelling validation of SaaS on PaaS•Success template for social app startups•Leveraging multiple Superpower 2.0/2.x agendas to drive momentum

Zynga on Facebook

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1. Superpower 2.X Attach •Enterprise MDM (mobile device management) innovator •Attached to Apple, Android, Blackberry, Windows Phone, Symbian etc.•Target smart phone adoption bandwagon

2. Multi-Dimensional Value Prop•Manage enterprise-provisioned and employee-owned smart phones and tablets•Reduce enterprise mobility expense•Enable ‘enterprise app stores’•Secure devices against threats

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•Target smart phone adoption bandwagon in the enterprise

•Secure devices against threats

3. Engage TAO: Mobile Operators•Go to market via ATT, Vodafone, Softbank •Enable carrier-provided cloud MDM •Leverage full carrier services including billing and other carrier OSS/BSS/CRM systems

4. Summary•Represents emerging cloud computing ‘arms dealer’ for age of devices plus services•Enterprise DaaS (IT-driven distribution as a service) wave first mover•Platformula-focused: 80% sales forecasted via indirect channels and partnerships

Mobile Iron & iPhone/iPad (SP2.X)

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1. Superpower 1.0/2.0 Attach •First prover for SaaS 1.0 and cloud integration middleware/services•Attached to Oracle, Salesforce, Google, Amazon, Microsoft, SAP, Taleo, etc.•Address/resolve cloud & SaaS

2. Multi-Dimensional Value Prop•Cross organization/cross-cloud/cloud hub•IT/LOB mgr/SaaS 1.0/Superpowers•Composite apps, data integration, app migration, SaaS experimentation•14 quarters of continuous growth

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•Address/resolve cloud & SaaS incompatibility with legacy apps

•14 quarters of continuous growth

3. Engage TAO: IBM•Integrate new functionality on top of IBM Websphere integration platform•Websphere Cast Iron Cloud •Cast Iron Appliances and virtual appliances•Now fully aligned with IBM installed base marketing post acquisition

4. Summary•Become strategic to Superpower 1.0 containment and ‘migration’ agenda•Game competition with all superpowers•TAO (IBM) drives acquisition

Cast Iron on Websphere

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Q: Is there a market readiness checklist to help ISVs successfully “run the cloud

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help ISVs successfully “run the cloud gauntlet”?

A:Yes. Let’s drill down on readiness as it relates to strategy, partner programs, messaging and investment/exit.

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1. Strategy Review •Capitalizing on Superpower Rivalry: Are you focused on inheriting superpower DNA through asymmetric marketing?•Targets of Asymmetric Opportunity: Are you engaging them?

2. Partner Program Assessment•Superpower 1.0: Are you over-invested in programs that don’t pay off?•Superpower 2.o/2.X: Are you fully engaged with their DaaS (app stores)? •Coalitions of the Filling: Are you a

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you engaging them?•Platformula=Technology enabler plus success model: Is yours in place?

•Coalitions of the Filling: Are you a candidate to initiate one or attach to one?

3. Messaging Refresh•Superpower 1.0 FUD: Have you scrubbed your content to fully align with public cloud market creation messaging?•Superpower Rivalry: Are you gaming the ‘market conversation’ to your benefit? •Thought Leadership: Are you focused on “cross-audience” and “cross-cloud” benefits?

4. Investor/Exit/Deal Scenarios•OEM Readiness: Are you a candidate for Superpower ‘white labeling’?• SW Vendor VCs: Are you aligned with Superpower roadmaps?•Exit: Are you a candidate to game the M&A landscape in the cloud devices plus services landgrab?

Market Readiness Checklist