Ian’s Blog on Open Source Marketing

I haven’t written on open source marketing for some time. This is a continuation on something I wrote some time ago - Strategy Rule 6 - Say it in a Tag-Line - You’re the Open Source Alternative.

Messaging should complement and reinforce the differentiation and positioning (tag line) but also be more campaign oriented, fun and controversial. Messaging should intuitively feel like what the customer already thinks and believes - no salesman required to give a complex explanation. To re-enforce and support this it should be simply verifiable with a call to action. Transparency is key. Facts should be in the open in a similar way to code being open.  You are up-against the deep wallets and a large sales-force whispering into the customer’s ear. If the message is not what the customer intuitively believes and can simply support  the FUD (Fear, Uncertainty and Doubt) volume dial will be turned up by the enterprise sales force and become deafening.

Good open source campaigns typically revolve around undeniable facts focusing on:

• Dramatic Cost Savings
• Consumerization - Innovation through Simplicity for all Users
• Choice - No Tie-in to a Proprietary System

Some Dramatic Cost Saving examples are:

Do More with Less - Use Alfresco and save 89% to 96% compared to Documentum, OpenText, Vignette and SharePoint

For an analysis of publicly verifiable US Government GSA figures go to:

http://www.alfresco.com/products/whitepapers/

Just received your multi-million dollar ECM renewal?

Say No and get a Modern ECM System for 96% Less

Click here for an analysis of publicly verifiable US Government GSA figure

Some Consumerization - Innovation through Simplicity for all Users examples are :

Does your ECM system feel like this?

Alfresco - As Simple as a Shared Drive and Facebook

Click here to try it immediately

Some Choice - No Tie-in to a Proprietary System examples are:

Don’t get Tied in by Proprietary ECM Stacks

and be held to ransom with enterprise software price rises

Total Cost of Ownership just got Green - Reuse your existing software, hardware and skills to reduce costs in areas such as:

• Linux, Unix or Windows
• Oracle, DB2, MySQL or SQL Server
• J2EE – JBoss, BEA Web Logic (Oracle), Web Sphere (IBM)
• Existing High Availability (HA) and scale-out architectures
• PHP, Java, JavaScript, Ruby
• Dreamweaver
• Microsoft Office or Open Office
• AJAX. Adobe Flex, YUI
• Firefox, Safari or IE

Be Fun. Be Controversial and be Transparent

These three things when combined with open source are louder than enterprise sales FUD

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Kyle McNabb, in my opinion, is one of the best analysts in the ECM space. He recently co-authored a report “Identifying When To SharePoint, Or Not, For Business Content Needs”. This has some interest findings and quotes:

“A SharePoint initiative is like bamboo: the challenge isn’t getting it to flourish; it’s keeping it from taking over your IT garden”

“many I&KM professionals would say I’ve worked with ECMs, and I know ECMs. SharePoint, you’re no ECM”

Pandas may like bamboo but it not so good for managing content when the compliance and productivity of your company depend on it.

The limitations are discussed

• Lack of repository scalability
• Lack of structured workflow support
• Limited support for non MS-Office file types
• Limited lifecycle management

Some key lessons are discussed:

• Higher value content such as contracts or engineering assets are often stored in non-SharePoint systems
• Large files such as schematics can bring the system to its knees
• Often SharePoint is used as a work-in-progress repository and are then published into an authoritative library

This brings me to my point. Companies are having to:

• Manage more content not less
• Manage content for more users not less
• Offer greater compliance and productivity

ECM for the masses should offer a very low-cost set of simple content services for all users and all content that scales across the enterprise using standards so that all applications and all users are equal citizens. This is not SharePoint.

Forrester point out that the attraction of SharePoint is that “in conjunction with Office 2007 it offers a comfortable, if not intuitive, working environment for business users.” What is really required is a simple SharePoint front end such as MS-Office or another simple web-based consumer client accessing the enterprise content services. As Forrester point out Web parts to mimic the SharePoint user experience fall short. “to date, only Alfresco has implemented support for the SharePoint protocol to match SharePoint’s integration with Office desktop applications.”

Alfresco 3 addresses  these issues:

• Native SharePoint protocol support
• CMIS standards support through REST and Web Services bindings
• Share - a simple consumer web application for collaboration on content with a flex document previewer enabling office 2007 and non-Office 2007 users to share documents
• Email In support for document storage and discussions
• Support for all content types, Microsoft and non-Microsoft, large and small files, high-value and low-value content
• Scalability beyond the dozens of of SharePoint recommended restrictions - 100GB databases (often users restrict to 30GB for acceptable performance), 50 million documents per server
• A content services platform for Alfresco and non-Alfresco applications - MS-Office, Joomla!, Open Office, mediawiki

Alfresco can be downloaded at:

http://wiki.alfresco.com/wiki/Download_Labs

I would encourage you to read the Forrester report at:

http://www.forrester.com/Research/Document/0,7211,47368,00.html

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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

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.

It has been a really busy couple of months but the Facebook announcement has created an incredible amount of interest. More about that later.

One of the topics that the Blue Ocean Strategy covers really well is “It’s about Value Innovation not Price Alone” and what is meant by this. Cheap alternatives have been around for years. Geoffrey Moore discussed them specifically in his model where there were Gorillas, Chimps and Monkeys. If cost was the only driver then monkeys would have been dominating the planet of software many years ago.

The additional critical factor is value innovation that is important and relevant to the customer. Value innovation is about reducing cost by eliminating factors the industry competes on that customers don’t value and innovating on elements the industry has not offered. A good historical example is Compaq vs. DEC, HP and Sequent. Customers predominantly wanted a machine for file sharing and shared printing. DEC, HP and Sequent had high-priced, machines that were too complex to administer for most departments. Compaq was not only a third of the cost, it was twice as powerful at file sharing and shared printing.

Alfresco is typically a tenth of the cost of traditional ECM vendors. However, the real reason ECM has not been rolled out is because it is too:

• Expensive

And too hard to:

• Install
• Use
• Rollout
• Scale-out to large numbers of users
• Develop Content Centric Applications
• Ties you in to a proprietary Architecture

What Alfresco has done is address the cost issue and innovate on each of the other issues. A core part of value innovation for open source is simplicity or ease-of-use. Alfresco, as well as being a tenth of the cost, is as simple as a shared drive with no client install. This innovation in ease-of-use has commoditized key parts of the traditional complex sales process and enterprise sales force.

What Alfresco is about is content enabling mass market, mass usage interfaces - shared drive, MS-Office, WordPress and now Facebook. More about Facebook in the next article

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