The Death of Salesmen with “Power to the people”

How we buy things and how they are sold is continuing to change. Remember before we had Amazon, Ebay and forums to review and rate stuff. We used to talk to salespeople but now we are increasingly listening to each others opinions and buying on-line. We are now moving into a time where consumers (retail consumers and business users) can directly control the product design and features they want. This change has significant economic and organisational implications.

For many years on-line communities have been operating in the background. In 1998 Before Microsoft crushed Netscape in the ‘Brower Wars’ Netscape gave birth to the Opensource Mozilla project, which produced Firefox, now the most downloaded software in history. Against Microsoft Netscape’s browser marketshare went from 90% to 1% and today Firefox sits at 18%. Fundamentally consumers want choice and value products which they can have input into producing. Opensource is destined to grow much further with this user involvement.

Another example of this change is from the renowned innovation academic Eric von Hippel of MIT who believes the Threadless business model has “tapped into a fundamental economic shift, a movement away from passive consumerism” and he goes onto say “everything is moving in this direction”. In the Threadless model the customers design the products and serves as the sales force. Customers opinions tend to be trusted as they are real and honest.

The tables have turned with suppliers no longer gradually driving innovation but communities of consumer’s actively pushing innovation forward through participation. The idea of the ‘Wisdom of Crowd’s’ argues that groups are remarkably intelligent, and are often smarter than the smartest people in them. This theory is supported by academics such as Andrew McAfee of Harvard. Web2.0 is a another example because it has lead to Enterprise 2.0 which in turn is putting a spotlight on current management practice limitations and should result in management innovation to a more open structure.

With 1,407,724,920 Internet users the rate of change is increasing, however many of our existing firms organisational sales and marketing structures are unable to keep up. Firms generally understand the need for product, process and management innovation, however organisational hierarchies are not like consumer communities they are slow and careful. And so new organisational structures are formed within fresh new companies, that if successful, grow to become dominate forces. This is classic entrepreneurial economic innovation, however a point which really struck a cord with me at the Boston conference from Don Burke of the CIA was ‘at no other time has the rate of technological change been so rapid within a life time.’

The latest evolutionary organisational form seems to be a firm with no sales force and a marketing department focused on community building and relations rather than advertising or branding as discussed by Umair Haque of Harvard. Most importantly this new structure moves innovation out of R&D and puts it in the hands of the employees closest to the customers.

“Power to the people” – Citizen ‘Wolfie’ Smith

Today’s innovation challenge for many firms seems to lie with too much power with too few people. Perhaps the answer is in trusting employees to make and take the decisions, who are not afraid of making mistakes along the way. Some old wise firms will make the jump into the new model, however many won’t and the faces of our leading companies will continue to change at an even faster rate than in the past.

Enterprise 2.0, Boston Judgement Day (4) – Who should the customer believe?

With so many choices when selecting a Web2.0 Enterprise 2.0 strategy, who should the customer believe: the vendors; the analysts or themselves? Seeing the numerous vendors categorised at Tony Byrne‘s CMS session, selecting the right solution must be a difficult decision for any customer. I heard many customers during the conference say that the event was too much of a ‘Vendor fest’, which was echoed at the final ‘Town Hall’ feedback back session.

Despite all the vendors shouting from the rooftops the majority of the case studies presented were using Opensource applications (Three out of the five: CIA; Sony and Pfizer). Even the wonderful case from Lockheed Martin was customised on the ‘included’ version of Sharepoint with a massive 14,000 man day effort. Interestingly there was talk from Lockheed of Opensourcing their code and expressions of interest from the audience .

Was the stark difference between what we saw from the vendors and what we heard from customer cases because these users were early adopters (visionaries) prepared to work with unpolished Opensource? Or is Opensource providing the working products, with the help of in-house technical expertise, being demanded by customers. It is well know in the industry that some Opensource is better than commercial code.

Unfortunately I missed the opinions from Opensource Panel session at the Conference with Bob Bickel of Ringside Networks, Jeff Whatcott of Acquia and John Newton of Alfresco but caught up with them on John Eckman  MP3 recording.

Perhaps Enterprise businesses are now looking to free applications as in the Web2.0 world. It is a compelling argument, free/low cost and working products. There is no doubt Opensource is on the rise, as supported by Jeffery Walker of Atlassian. Yet only 5% of vendors at the conference were representing this large and growing community, a view shared by Kathleen Reidy and John Eckman. Interestingly some of the commercial products at the conference are reliant and partially build upon Opensource, some even up to 80% I was reliably informed! Customers maybe starting to question why pay for an application which is built on Opensource. The problem with Opensource is it can sometimes be poorly packaged and can need a lot of attention to set-up and maintain.

The cases presented at the ‘leading Enterprise 2.0 conference’ shows that customers are ‘baking’ or testing solutions before fully implementing them as recommended by Tony of CMS. Opensource offers a very attractive approach to testing and trying before buying. I believe customers are increasingly listening to each others experiences, believe less in the vendor’s promises and are more willing to use Opensource. However, as Milton Friedman said ‘There’s no such thing as free lunch’. Customers say they want more case studies and less vendor pitches. However, someone has to subsidise conferences and pay for the commercial development work to round Opensource products off for the mainstream.

I believe the balance between Opensource and the proprietary commercial software is going to change with many vendors having to move more towards a business model like MySQL(pre-Sun) or MindTouch who were at the conference. Because many of today’s vendors are so proprietary and lack flexibility they may not be able to make this transition. However the challenge Opensource vendors have is making healthy revenues from a very diverse, demanding and large customer base. Currently the most effective and successful software vendor model for the future still remains unclear.

Enterprise 2.0, Boston Day 2&3 – Flying in a swarm of competitors

It is an amazing time of change in the computer industry. The convergence of the media on the Internet, computing in the cloud, the growth of open source and the move to a more collaborative business environment all bring much uncertainty, but also great opportunities. All this change is creating a flux of new industry suppliers, large and small, who are all vying for the attention of new potential clients.

Jive Software and Atlassian are two firms that are being surrounded by a swarm of new start-ups and the big enterprise vendors. These pure play software manufactures have slightly different products, Atlassian with Wiki’s and Jive with an integrated social suite. Both firms have a comparable history and are now of a similar size and face the same competitive challenges. With all this frenzied market activity I’m interested in understanding their marketing strategies and outlook for the future. I met with both of the firm’s marketers at the Boston conference to understand more.

The President of Atlassian, Jeffery Walker (RadioWalker, blog) is a well liked veteran of the computer industry. Atlassian have a very strong market specialization with their developer wiki products and a large user base. Over and over we met and heard from many Atlassian users at the conference. Jeffery is very bullish about Wiki growth for Atlassian saying that ‘Enterprise 2.0 is already in the mainstream’. I disagree and think we are not there, just yet. Sam Lawrence (Go Big Always, blog), the likeable energetic marketer from Jive, felt that the market is moving towards the mainstream through increasing ‘market awareness’.

Atlassian is using a soft sales approach to market their products, with a ‘try before buy’ attitude, relying on referrals and product quality for the product to sell itself. They see themselves as being transparent rather than having a pushy sales force. It seems Atlassian avoid overselling and under delivering their products. Sam felt Jive’s uniqueness came from their employees ‘strong enterprise knowledge and experience’. It was evident that both firms are focused on understanding their customer’s needs and delivering on expectations.

When asked what effect IBM/Microsoft will have entering Enterprise 2.0 market Jeffery felt that IBM will be a force and that both vendors had the ability to ‘Flatten earth’ through Commoditization. Interestingly he also thought that ‘Open source is going to get much bigger’. Jeffery believes that the pure play vendors need to sell more than just one product, and must have a market leading product to survive the challenge of new vendors entering this space. Sam felt that customers had lost trust in some of the larger vendors and are now looking for ‘working product’s’. Interestingly, both marketers have the view that products must live up to there expectations.

Finally, Jeffery felt that the further international expansion of Atlassian and operating in today’s volatile market are major future challenges for Atlassian. For Sam the big challenges are to make sure that Jive continues to be ‘part of the conversation’. This is a challenge for any smaller firm in a growing and changing market. Of course it is Sam’s job to be heard and he seems to have the ability to stir things up through his provocative marketing voice. The other challenge Sam referred to was in packaging Jive’s products to solve specific problems rather than being a solution looking for a problem.

I think the challenges and changes created by a swarm of new suppliers including the powerful enterprise vendors are the growing pains of an early market with great potential. Today the Enterprise 2.0 market boundaries and products are still emerging and remain unclear. These discussions have reinforced my view of the changing nature of customer expectations from vendors. IT vendors increasingly need to deliver on their product sales and marketing promises rather than rely on marketshare and power.

Enterprise 2.0 Boston Day 1 – Tuning in to the thoughts of the crowd

How we listen and how we talk to each other is evolving because of Social Media. Face to face conversations remain much the same but group discussions and sharing information is becoming richer with individual expression and involvement.

For example, presentations are no longer a one way street where the presenter talks at the audience with only the brave or loud speaking up to ask questions during the session. The quiet, thoughtful or shy among us, who often hold the most valuable input, have a new voice to express their opinions. Instant Micro blogging platforms such as Twitter enable audience group discussions to be made during presentations under the nose of the speaker. Is this a bad or good thing?

It was in evidence today at the Enterprise 2.0 Conference in Boston (USA) and was even being encouraged by the organisers, TechWeb with their ‘Backchannel’, a Twitter type service. Conference 2.0 with two way communication as I called it out to Steve Wylie. It was like watching a voting system where the speaker and their content was reviewed in real-time. This can go very badly for the speakers as with the well know South-by-Southwest interview with Sarah Lacy or very well as with IBM presentation today I sat in on.

Unfortunately it did not go so well for Lawrence Liu, from Microsoft, who brought in real boxing gloves onto the stage he shared with IBM. It seems he was dealt a KO blow by IBM’s Connection product demo judging by the audiences instant blogging silent but strong conversations.

In fact several of the audience, including Susan Scrupski, said to me that the real-time discussion on instant blogging was the most valuable part of the session. It is interesting how the value is within an shared discussion and not what we are told. Perhaps there are lessons to be learnt for management and in encouraging innovation. Conference presenters hold a lot of power over an audience just as senior management do over organisational discussions. Both conversations need to be unrestricted and even nurtured to bring involvement and realise the power and value of many creative minds.

The customer is still King in Enterprise 2.0 supplier convergence

Today the Boston Enterprise 2.0 conference organisers TechWeb issued a vendor press release announcing new product versions to be released at the conference. The event is a great time to maximise the PR opportunities of a new product within a target audience.

However, in all the excitement of supplier convergence at the conference, we can forget the most important party in the equation, the customer! What the Enterprise 2.0 vendors think of each other is really not that important, what matters is what potential customers think and believe. We should not forget that the customer is king.

The war like mantra of competitive products and suppliers can very easily distract our thoughts away from the real and evolving customer’s problems and needs. Fortunately, with the likes of Andrew McAfee, we have an objective view which keeps the big picture in focus. McAfee is firmly focused on the customer’s problems, needs and objections to Enterprise 2.0. McAfee’s excellent interview at the Tokyo Enterprise 2.0 demonstrates this and I highly recommend watching this 40 minute video:

As my firm’s new product is not within the conference announcement I’m going to plug my company press release on this blog. Like McAfee my firm is also dedicated to understanding and responding to customer needs and problems. When researching the Enterprise 2.0 emerging trend, my co-founder Simon Oxley and I found information on this market fragmented and we have made our start-up mission to build a centralize Enterprise 2.0 informational site (www.E20portal.com).

This site is primarily aimed at customers new to Enterprise 2.0 to highlight the benefits and value that Enterprise 2.0 can bring. It is also a place to find various Enterprise 2.0 resources and whats going on, thus our tag line ‘Everything Enterprise 2.0’. From a vendor point of view the site will be an opportunity to bring new customers into the market and grow the market.

Screen Shot of beta E20portal.com

E20portal.com is currently in a closed beta and due for public release on the 8th of June 2008, however if you can’t wait until then drop me an e-mail (info@e20portal.com) or blog comment with your e-mail and I’ll give you an individual user name and password. The site has its own blog, so my personal reflections on Enterprise 2.0 will remain on this blog to keep the portal views separate.