Ian’s Blog on Open Source Marketing

You are entitling people to what they were previously denied. As I wrote in my previous post the customer knows:

• The high-end systems are too expensive and complex
• The low-end systems are low-priced but don’t meet requirements

Customers no longer have to make a trade-off. It is the power of open source that is enabling this. Open source is also about the “good guy” vs. the “big bad guy”, abusing their position of strength with both customers and competitive vendors. Your tag line needs to say this and be a springboard for your messaging that will be more campaign oriented.

As the Blue Ocean Strategy says you need to say it in a tag line.

Generically this is:

• The Open Source Alternative to (Generic Term for Expensive Proprietary Vendor without stating names directly) when there is no clear “Dark Side Gorilla”

or

• The Open Source Alternative to the specific “Dark Side Gorilla” when one clearly exists

When the market had no clear ECM leader with Documentum/EMC, FileNet/IBM, OpenText, Interwoven, Vignette

• Alfresco the Open Source alternative for ECM

When a new “Dark Side Gorilla” emerges

• Alfresco the Open Source SharePoint alternative

The enterprise software market for gorillas is becoming soup - MISO soup - Microsoft, IBM, SAP and Oracle.

Large enterprise software vendors have a lot going for them. They have a big base, a large sophisticated salesforce, and big budgets to create a lot of noise in the market. Microsoft has a low-cost global channel with partners in every locality to explain and deliver their products.

It’s simply not possible to “out-base”, “out-salesforce” or “out-noise” MISO or even the lesser enterprise gorillas.

The big advantage of the open source model is the community and the low cost global internet distribution model. For this to work effectively your differentiation must be simple, intuitive and indisputable. You can’t rely on a sales-person having a long conversation to argue your differentiation or a long evaluation to prove your differentiation. It is critical to attack “the weakness in their strength” - classic “Ries and Trout” marketing warfare (First published 20 years ago but still as valid today.

Their strength is the salesforce and big marketing budgets. If you can get you message across simply without the need for a large expensive salesforce and large marketing budget then this becomes their weakness. The channel becomes too expensive to deliver the product. What you have is a classic open source best-of-both world’s strategy.

The best market for this is an already educated market that has been using the technology for a number of years.. The market doesn’t need to be taught what the problem and pain chain is. They know it. What they want is simple competitive based, differentiation based messaging.

The customer knows:

• The High-End systems are too expensive and complex
• 
• The Low-End systems are low priced but don’t meet requirements
• 
• But why should I choose you?

The customer has to come to the conclusion the best solution is in the middle - The Best of Both Worlds. (This is best described by John Zagula and Richard Tong in the Marketing Playbook. I’ll talk more about this in later blogs)

An example is the following Differentiation/Comparison of Alfresco, SharePoint and ECM Stack:

• ECM may be Scalable and Robust but it is too Expensive and Proprietary
• SharePoint may be Lower Cost but it is Proprietary and not Scalable

• The world needs an open source alternative to legacy ECM
• The world needs and open source alternative to SharePoint

Open Source, Scalable and 1/10th of the cost - The Best of Both Worlds

This week I saw one of the best customer webinars I have ever seen by Neil Armstrong and Tim Bergeron of Activision Inc.

When you say Activision people think of blockbuster games such as “Call of Duty” , “Guitar Hero” and “Marvel Ultimate Alliance”. For a change when I came home my kids were interested in what I had to say.

One of the things I found fascinating was how Activision had chosen to make the web site a strategic part of their marketing, creating product-oriented micro-sites supported by the company brand, but even more-so by the community of followers of the game. Five of the top twenty five software companies are now games companies and their sites represent the future of the corporate website with great, fresh, engaging, community oriented content.

When you look at these types of sites it interesting to think about “a day in the life” of the content that powers these sites:

1. Create Game Information Behind the Firewall - Create videos, stories, images, ratings etc
2. Review and Approve Behind the Firewall
3. Stage the New Website Behind the Firewall - Content is now ready for the public site
4. Deploy the New Website - Intelligently deploy content to a web server, media streaming server and content management system
5. Publish across Multiple Channels - Use simple templates to provide variety, flexibility and an intuitive user experience
6. Manage Digital Assets and Publish across Multiple Channels - Low-resolution Flash for website, High-resolution Quick Time for downloads, Automatic transformations for mobile devices - iPod, CellPhone, PSP
7. Manage Ratings and Publish to Appropriate Channels - Use rating information to match channels to the appropriate population or age range
8. Make it Scale for Millions of Users - Use load balancing, replication and clustering
9. Use Open Source - Like the leading Web 2.0 sites use Linux, MySQL, Alfresco, Tomcat and JBoss AS

Given all of this what are the benefits

• Dramatically Reduced Ad Spend
• Great successes like Call of Duty, Guitar Hero and Marvel Ultimate Alliance

Interestingly today I read an overview of “New report Cautions on Using SharePoint for Public Websites”

Given the strategic importance of this next generation site the world should remember it needs an open source alternative to SharePoint.

Web 2.0 sites have proven that next generation websites are built on open source.

One school of thought is that open source is low cost and great for small medium businesses (SMB’s) because that is where the large enterprise software companies (read large and supposedly terrifying) aren’t present. Software companies don’t “own” their customers. In the case of Alfresco, any company may already have Documentum, FileNet, Interwoven or Vignette. The reality is that there is only a 5% to 10% penetration of this software – either on a desktop or on the shelf. What is critical is to focus on people and users in companies and not companies as software fiefdoms.

Alfresco has been very successful in the Global 2000 (particularly financial services, media and professional services) and Government by targeting the non-users of existing ECM systems in these companies. Rather than competitively trying to replace existing installations, Alfresco has targeted the knowledge workers who use shared drives, Microsoft Office, forms for Web contributions and now Social Software for collaborative activities and ECM enabled them. Existing ECM vendors are becoming boutiques, the Gucci and Prada of ECM.

I recently read an excerpt of an excellent report by the 451 group - 451 Commercial Adoption of Open Source - The SMB Market Opportunity. It had a similar opinion. In there it stated:

• The SMB market opportunity for open source software vendors is limited - SMB customers are highly cost conscious and generally lack the IT resources to effectively manage much beyond the simplest project.
• More than 70% of vendors surveyed for this report rely on a direct model to reach SMB customers - Channel strategy is fraught with problems with thin margins and the cost of effectively managing the channel buildout
• Microsoft’s dominance in the SMB market is unlikely to change anytime soon - Open source software that integrates with and support Windows and other Microsoft products will have an advantage
• … may other markets, including Asia, Europe, India and South America may experience rapid growth of Linux and open source software fueled by local government and commercial directives and preferences

Details on the full report can be found at:

http://www.the451.com/caos/caos_detail.php?icid=476

My colleague Matt Asay also wrote a great post on this which can be read at:

http://blogs.cnet.com/8301-13505_1-9831424-16.html?tag=head

So the next time an enterprise software salesman tells you he “owns” an account tell him he will soon be as rare as the Prada suit he wearing (funded by the cost of sale of Enterprise software)

A summary of “A Simple Marketing Model for Enterprise Open Source” can be found at:

http://opensource.sys-con.com/read/431544.htm