Ian’s Blog on Open Source Marketing

The BPM analysis shows a strong preference for “other” at 62%.

Once again the probable conclusion is that an ECM user, working in an ECM environment, will use the integrated BPM or workflow software. This is also reflected in SharePoint BPM usage in a SharePoint environment.

Business Process Management can break down into a number of categories:

• Content Centric - Content Creation, Update and Review
• Integrating a Business Process across Multiple Systems

For the former the preference will be for integrated BPM/Workflow. For the latter the preference will likely be for cross application BPM often using BPEL and Web Services

The blog analysis shows a strong preference for “Other” at 63%.

From this data it is possible to draw one of two conclusions. Either “Other” represents a hosted blog being used on the web. The more probable conclusion is that an ECM user, working in an ECM environment, will use the integrated blog software. This is more likely and reflected in SharePoint blog usage in a SharePoint environment.

In summary, for the majority of the time the user will prefer the integrated blog software, but if they have a preference they will choose the leading open source Web 2.0 blog software – WordPress.

Previous surveys have shown that community members tend to evaluate on a Windows laptop and in deployment turn to a Linux server. This survey continued the trend with 64% of users preferring to evaluate on Windows.

The Open Source Barometer III shows that 71% of members use or intend to use Java as their architecture.

Java has for a long time been strong in the open source community. However, the analysis further segmented the Windows-only users and found that 86% do not use or intend to use .NET/Web Parts and 53% want a Java architecture. A logical conclusion to this is open source users want an open stack, even on Windows.

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.

In July 2007 we launched the Open Source Barometer - a survey using opt-in data provided by 10,000 members of the Alfresco Community with the aim of providing a global survey of trends on the use of open source software in the enterprise. Users were asked about their preferences in operating systems, application servers, databases, browsers and portals to capture the latest information on how companies today evaluate and deploy open source and legacy proprietary software stacks in the enterprise.

This is the largest open source enterprise stack survey and is used by Alfresco to prioritize platform and stack combinations for the larger community. The Barometer is also designed to ask questions such as:

• How and where is open source used in the G2000 Enterprise stack
• Is it a pure open source stack or a hybrid
• Are things different in different parts of the stack
• Are things different in different parts of the world
• Is there a leading player in each part of the stack
• What are trends over time

If those were the questions, one answer that clearly came back was - MySQL is the clear leader in an Alfresco environment being chosen 61% of the time.

The Open Source Barometer is published twice a year. The next one will be announced at JBoss World in Orlando, February 13th, 2008, where I am presenting.

I have been working on the next version today. The sample size is now up to over 35,000. As well as the sample increasing significantly we have also expanded the Open Source Barometer to include analysis on preferred virtual machines, office environments, how users are planning to evaluate alfresco (hosted, corporate server or laptop) and type of content management. The new barometer has some very interesting results.

One statistic that came out was “The Sun is still shining on MySQL”.

As the previous Open Source Barometer showed, in open source at each level of the stack there is a clear leader. If you say open source linux, database, app server, enterprise content management, crm most people will be pushed to come back with more than one name. For open source database that name is MySQL.

In my previous posts I have discussed “The Blue Ocean Strategy” in “Make Markets not War - A Simple Marketing Model for Enterprise Open Source”. To be successful you need to focus on what Kim and Maubrogne call a “Blue Ocean” or “Non-Customer.” Alfresco has been very successful with the 80% of Knowledge Workers who don’t use ECM and collaborate with a shared drive and email - The places ECM vendors don’t go (and actually aren’t very good at). MySQL has not focused on replacing Oracle but powered the largest Web 2.0 sites in the world.

MySQL is a great company managed by great people and the Sun is still shining on their Blue Ocean. The acquisition by Sun makes sense - Sun powered the first generation of websites. MySQL powers the next generation of Web 2.0 sites. Sun has already proven their alliance and cooperation with open source and this move further validates the value of open source as a way to drive innovation and build companies and value in a better and more efficient way.

The Open Source Barometer will be announced at JBoss World on February 13th, and also posted on www.opensourcebarometer.org , where details on the last barometer can also be found.

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

When there is a pure technical innovation/discontinuity customers often don’t understand the technology. So it needs to be explained in industry terms. It’s not a “virtual document” it is a “drug submission.” In “Main Street” everyone knows what the technology does. Therefore there is no need to micro-market to a specific vertical, user and application and pray you will cross the chasm to the riches of the tornado. What is needed is to maximize your “Blue Ocean”.

Alfresco targeted, the “Blue Ocean” of non-ECM users who were “Knowledge Workers” who used a shared drive. The S:/drive population. This is the majority of desktop users and much larger than the traditional ECM market. These users want to collaborate and publish to websites easily using their standard tools.

What is important is to integrate into the environment the knowledge worker lives in on a day-to-day basis to make it easier for them to do their job “better”. This has driven Alfresco to ECM-enable the mass usage tools that knowledge workers use in the Global 2000. This has evolved as follows:

• ECM enable the shared drive
• ECM enable MS-Office
• ECM enable forms and Office for simple website contribution (with Virtualization and Sandboxes)

An audience is a audience is an audience and that audience may be customers, partners, prospects or employees. Enterprises are beginning to realize that a Social Computing Tool is reaching an audience of customers, partners and prospects as much as a website. To drive this we evolved to offer:

• ECM enable publishing to leading Blogs – WordPress and TypePad
• ECM enable publishing to leading Social Networking tools - Facebook

In all of these environments ECM is critical, but must be provided as a service (”Content-as-a-Service”) from the mass usage tool the knowledge worker is using as opposed to a specialist ECM tool that is part of and monolithic ECM suite. As I wrote in my previous post, innovation is focused on ease-of-use making it simple and often transparent for for knowledge workers to get access to ECM. The suite approach stems from the 1990’s when ECM vendors went on a spending spree buying up companies at bargain prices after the .com bubble. This strategy says we have all of the tools you want - they may not be what you use in your daily work, they may not be what you want to use, you may need to get trained on how to use them, they may not be integrated, they may use separate architectures - but hey look at how many tools we have in our suite. We have everything you could possibly ever (read probably never for the majority of users) need.That’s why ECM enabling existing mass usage tools with Content-as-a-service is the way forward.
Kyle McNabb in a very interesting blog wrote:

http://blogs.forrester.com/information_management/2007/11/facebook-alfres.html

“And we’re just starting to tap into the persuasive power of content as organizations try to use content, across multiple channels (not just the Web site) to improve the customer experience. And there’s a mountain of content stuck on network file shares that need to be put to use to help improve how information workers get their jobs done more effectively. My contention: You can’t put this content to use if you don’t manage it. You need to manage this content to ensure you’ve got a single source of the truth, that you have the right content ready for use, and that you know where to get it…

But organizations, and information & knowledge management professionals, will want a way to define and enforce how this information gets managed, how it gets retained, and MOST IMPORTANTLY, how it will be used, regardless of where it physically lives — Facebook, Microsoft SharePoint, or on my dreaded C: drive (I can never find anything on it).

The Blue Ocean is being ECM enabled.

A year ago I wrote “Howells Ten Rules for Open Source Marketing.” At Alfresco we believed that open source was different and needed a different marketing model. Geoffrey Moore was at the root of our thinking when he wrote about “Darwin and the Demon” and markets being ripe for disruption in the form of marketing and business model disruption. We saw that there was no “cookie cutter,” standard approach and tried to blend our experience in growing large successful enterprise software companies with some best principles from marketing visionaries such as Geoffrey Moore, who had a massive influence on all of us from Documentum.

Since I wrote that article Alfresco has been downloaded 700,000 times, is actively used at over 21,000 sites and supports over 300 paying customers predominantly from the Global 2000 and Government. Alfresco in just over a year has become the clear leader in Open Source Enterprise Content Management, and one of the fastest growing open source companies ever. This series of posts is an attempt to review what we got right, what we got wrong and the new things we have learned along the way. It is also meant to be a way to share ideas and for open source companies competing against enterprise software giants.

I have previously worked for companies focused on crossing the chasm in the early days and later being leaders. I have also worked for companies that were number 2 to a dominant player. The marketing models we used and the understanding of them was critical as it drove a coherent approach to all that we did.

Often you focus on your position in the market - a follower or a leader - the Avis vs. Hertz model or a gorilla, a chimp or a monkey model. The open source marketing model tries to break away from that mindset. We have used some of our own thoughts combined with the best ideas from marketing visionaries such as Geoffrey Moore, Zagula and Tong with their “Marketing Playbook”, Trout and Ries with their “Marketing Warfare” and Kim and Mauborgne with their “Blue Oceans”. That is why such concepts as “Chasms, Tornados, Main Streets” “Gorillas”, “Drag Races, Best-of-Both”, “Blue Oceans, the Model T, Apple, Nickelodean and Megaplexes” have so much to do with the success of Alfresco!

A Marketing Strategy for Open Source
Strategy Rule 1 - Make markets not war
A simplistic view of open source strategy is to target a big, greedy, lazy incumbent enterprise software vendor and offer a lower-priced alternative. This means the market is a zero-sum game and you are dependent on swapping out the large incumbent vendor. If that was the case, low-priced enterprise vendors, that the Moore system categorizes as “monkeys” vs. “Chimps” and “Gorillas,” would have been successful decades ago.

To be successful you need to focus on what Kim and Maubrogne call a “Blue Ocean” or “Non-Customer.” These are the users that have either tried and rejected the software in question or have never been able to afford it. That is where Alfresco has focused.

This series of posts is featured in Enterprise Open Source Journal. To read more goto:

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

Good reading and for the open source star wars fans amongst you “May the Force be with you”

ian