Thursday, September 24, 2009

Loyalty programs - an option for IT?

I have to admit, I am a sucker for dogs. Whenever I’d walk through a mall and see a pet shop, I take time to walk past the rows of puppy cages. My eldest daughter “rescued” a greyhound from a shelter and even in the heart of winter, when she was out of town, with snow piled high along the sidewalk, I still found time to take him for his constitutional walk. As the puppies stare at me through the glass of their cubicles, I find it difficult to just walk away. But these days, with the time I spend on the road, it wouldn’t be fair for any dog.

I had a dog when I was a child. It was a brindle-colored Boxer that we simply called “Loco.” He wasn’t completely normal – he would follow the bread delivery van and retrieve every loaf dropped off. My father quickly tired of compensating the neighbors after each visit from the baker. And when I went to Rugby practice after school, Loco would somehow manage to fix his teeth into the laces of the ball and run away with it. No matter how we all tried, we just couldn’t catch him and we would spend all of the practice session without a ball. I have had other dogs, after Loco, but he was always my favorite and one day, there may be another Boxer around the house!

There’s perhaps nothing more loyal in the natural world than a dog. The family dog has been the symbol of loyalty, and the number of times I have picked up a paper only to read of yet another heroic effort by a dog saving its master can’t be counted. Throughout life we too develop strong associations with people and places. We are often loyal to our home town, to our school, and to our friends. The picture at the top of this post is of me waving the flag for Australia! But these days loyalty is being institutionalized into nearly everything we do and there’s almost no mail delivery where there isn’t some form of enticement asking us to join some vendor’s loyalty program.

In the early days of my career, when I first started to travel on business, there was little attention given to the frequent flyer. There was a lot of attention paid to first class passengers, but for everyone else it was a pretty ordinary experience. And the cost of flying, back in the early ‘70s, meant that airlines didn’t see too many repeat flyers. So, no, frequent airline travel was rare. But today, we pretty much do everything we can to accumulate frequent flyer miles – and for many of us, our annual vacation is often greatly subsidized by the free air travel we earn over the course of a year. And it’s not just the airlines, as hotel chains quickly followed suite. Of late, I have even seen the cruise ships step up to support their most loyal passengers with upgraded cabins and deeply-discounted future sailings.

Across the computer industry, the story is quite different. For companies that really pride themselves on their marketing savvy, it’s been slim-pickings as far as receiving additional benefits for remaining loyal customers. Certainly, the sales teams are aware of lengthy business associations and work hard to retain a customer’s loyalty, but when it comes down to individual IT professionals, there is very little recognition. After all, it is often these individuals who determine future IT purchases and who stand the most to loose whenever a situation deteriorates and projects fail to launch.

For many years, the vendors have built a rudimentary program for their very best customers. Often participation in Customer Advisory Boards is solely the domain of customers with decades of association and where IT budgets often soar into the billions of dollars a year. Sitting around a conference table in a six-star hotel, along southern Italy’s Amalfi Coast, certainly is an occasion many customers would be reluctant to give up. No matter the state of the economy or the potential savings that could come from a switch in allegiance, or so these vendors hope.

Key Customer Symposiums and other targeted events come under the same heading – considerable marketing dollars expended on a handful of extremely loyal customers. It is true, I have to admit, that the vendors do learn a lot from these events and information obtained their always contributes significantly to prioritizing product roadmaps, but what about the remaining 99% of the customers? Those with relatively miniscule budgets yet they too exhibit loyalty and continue to purchase each new product as it becomes available!

For as long as I can remember, it has been the domain of the users groups to fill this gap – events and functions, even parties with celebrities, to help foster the sense of community at the grass roots level. It doesn’t matter to the users present whether you have a single server and a simple Customer Relationship Management (CRM) application, your presence is as welcome (and as enjoyed) as users with the most complex IT deployments. User group meetings, supported by the major vendors, have become extravagant and spectacular love-fests between users and vendors. While we see some recent downturn due to the current uncertain economic conditions – given all other options, vendors still enjoy the time in the spotlight these provide many of the executives.

I recently stopped by my Chevrolet dealer and saw a separate area set aside for Corvette owners, so I asked if the dealership had ever considered creating a loyalty program, along the lines of airline loyalty programs. I even took my question to a Corvette online forum for feedback. I went so far as to suggest to my dealer that I would think about proposing such a program. However, the responses posted to the online forum weren’t all that supportive.

And the general feeling was that, as much as they loved their Corvettes, unless a loyalty program offered deeply discounted (even free) services, no matter how many caps or custom shirts were provided, they would continue to shop around for their next Corvette – yes, the Internet has had a big impact on this community – and support the dealer who gave them the best price on the new car. (But return to their existing dealer for routine servicing, mind you, in nearly all cases!)

The airlines have been extremely successful with their loyalty programs as their recognition of high-value passengers have kept them captive for decades. Many are now too deeply entrenched in the program, with too many benefits, that switching airlines would only come with significant cost. Ongoing participation in the airlines program became a sure thing, and the ongoing participation by the member, unconditional!

But from all the discussions I have, and as illustrated by the Corvette owners, IT professionals just aren’t into protracted loyalty for the sake of a few “special occasions” and reward dinners. Even Apple users, for the most part, would change allegiances in a heartbeat if the new vendor came out with something measurably better and way, way “cooler” than what Apple was offering at the time.

Within the IT profession, loyalty has definitely become multi-dimensional. It’s not only customers remaining loyal to one particular vendor, and across the complex world of partnerships that underpin any successful vendor, partners expect their vendor’s team of professionals to be loyal to the platform as well. But again, in the harsh reality of today’s economic climate, I am seeing less and less loyalty on all sides. The new paradigm for IT vendors where teams, divisions, and whole business groups can be let go for just a short term quarterly bottom-line boost, no one can expect even the longest-serving professional to show much loyalty these days.

My dogs have been great pets. And to me, they showed a sense of loyalty that was unconditional. But was it? Of late I have begun to wonder how loyal they would have remained if I had stopped feeding them? What if a neighbor offered them food and spent more time with them – how loyal would they remain? Is there really any unconditional loyalty anywhere?

Is loyalty today just a one-deal term? And is this necessarily a bad thing for the IT community? Could misguided loyalty hold a company back if it’s IT staff just keeps hanging on to the same mix of products without looking further afield? What happened to all the loyal Burroughs, Honeywell, Nixdorf, Wang users? More confusing? What happens when IT decides to swap out IBM for HP, but stays with IBM Global Services, for instance? It would seem on further consideration that perhaps it is a very good thing that there are no loyalty programs for IT professionals.

After all, the IT industry’s strength draws from the speed with which new technologies and products can find a community and solve real business problems. I guess we just all have to come to terms with this fickleness and realize that benefits from retaining a degree of independence has outweighed anything loyalty programs could possibly have provided.

And perhaps, knowing that, our loyalties really are tied to the IT industry itself. After all, whether we work for Chase, Exxon, CNN – we are foremost IT professionals!

Sunday, September 13, 2009

And the rockets' red glare!

And now, having posted to the NonStop community blog, Real Time View for two years, I have started my third year of blogging ...

Friday evening is approaching, and in the final hours of the day I’m multitasking, as usual. On Skype to my good friend Mark Hutchens in Sydney while scanning emails and checking financial markets. Out of nowhere, an SMS message arrives from another good friend, Brian Kenny – “stand by for sonic booms,” it says. Space shuttle Discovery is going to break orbit and land nearby at Edwards Air Force Base.

Sure enough, in mid sentence with Mark, the dual booms rattle the windows. The base is not far from where I work, and only a few days ago, I had stopped by the rocket museum alongside the Naval Air Weapons Station, at Point Mugu, California, and the picture above is of me alongside some of the rockets on display. But these were all ancient relics of a bygone era and minuscule when compared to the Shuttle!

It's now the second time I have heard the signature booms – earlier this year, while at Willow Springs race track, I had just returned from my driving session and was trying to take in what instructor John Matthews was suggesting, when similar dual booms rocked the building. We all ran outside and many of us saw the shuttle. In at least four different locations above us!

This evening, I wasn’t in a position to see anything and from where I live, the shuttle is still very high in the sky. It’s still an impressive feat of engineering – by the time the space shuttle enters the atmosphere, it’s “flying” at more than 17,000 mph! Just thinking about how much energy gets released during the descent, is mind-blowing!

The space station orbiting above us is almost complete. Not sure what exactly is to be added next but, from all the stories and pictures I have looked at, it’s pretty close to being finished. As I listened to the news coverage of the descent and landing, the news anchor commented on how Astronaut, Jose Hernandez, of Stockton California was sending tweets back to his followers on earth.

Among the more amusing was an early one “Met our six neighbors next door and they seem nice! So nice, we are giving one of them a ride home!" Astro Jose, as he is known on, then sent the tweet just before leaving the International Space Station (ISS), “we undocked today. What a sight seeing the ISS from up close and then seeing it get smaller! We also did a fly around the ISS!”

If anyone had told me, a few years ago, that social networking would leave the planet earth and the Internet would carry text exchanges with missions in space, I would have been shocked. While few things surprise me these days, particularly when it comes to the space program, all the same, to imagine this level of open dialogue with an Astronaut and with the same tools we routinely use, was quite a surprise. For decades now there’s been some concern that a returning space flight will bring with it unwanted viruses that wipe out the planet’s human population - but who would have thought that perhaps the ISS is more vulnerable to a virus finding it’s way up from earth!

Social networking has been very much on my mind of late – it’s been hard to escape all the exchanges between many within the NonStop community. A few days ago, a new user group was created on LinkedIn that was called the NonStop Vendor SIG. Ernie Guerrera of NuWave did a good job of getting it up and running, and marketed to the vendor community, and within the first 24 hours, there were more than 40 members. And at last count, it was getting close to 60 members, and only two more days had passed.

Why the rapid growth in membership – well, rapid in terms of what we see across the HP NonStop community – when compared to other sites? Put simply, it was the content and the opportunity to provide feedback, almost instantaneously, that developed the membership. Marketing a web site, a blog, or a user group, isn’t all that hard given the email lists and contact data basses most of us have these days – but getting casual web users to sign-up and become members, and then to revisit the site on a regular basis, is no mean feat and tells us a lot about the type of tools preferred by web users these days.

Social networking is becoming the predominant tool for communicating with our peers, our business partners, and customers. It may not always sit well with your legal staff and still remains a puzzle to many in marketing and public relationships, but I sense there will be no let-up in the number and diversity of on-line communications in the coming years. And blogging is becoming an increasingly important tool for maintaining a presence on the Internet. And who would have guessed that I am now into my third year of blogging to Real Time View - the actual anniversary being a few weeks ago, back in early August.

“So, blogging can be vitally important, but most likely it will open doors for you that lead to revenue or help you promote things you are selling, as opposed to generating a tone of money from advertising,” suggests web-sales teaching guru, Brian Clark. (Check out Clark then adds “there’s a huge shift going on thanks to globalization and the growth of the Internet, and those who can create and express ideas online will be at the top end of the economic spectrum.”

As with everything you run across on the Internet, you have to be a little careful applying all that is conveyed. In the case of Clark, he’s encouraging today’s generation of entrepreneurs to begin building their future empires in the virtual world of the Internet. But the basic observations he makes here remain valid; “product placements” in blogs are becoming just as important as in any other medium, and the trend today is that more and more people are relying on the Internet for all of their product information. Ignoring this medium and letting your competitors gain the upper-hand, will be tough to reverse when you wake up and finally “get it!”

Under the label of “Artists and Technicians,” as seen to the right of this posting, I have written six posts on different professions within IT – covering operators and operations (twice), CIO’s, CTO’s, Architects, as well as Programmers. But perhaps, the most important leader to emerge will be the digital, or media, marketing executive.

In my most recent essay in (September, 09) I observed how “we read of titles like Ford’s ‘head of social media,’ Levi’s ‘director of digital marketing,’ Intuit’s ‘social-media marketing leader,’ and Intel’s ‘social-media strategist.’ And I have to believe that none of these titles would have appeared on anyone’s business cards five years ago.” I then added “traditional marketing managers may soon become part of a new organization headed by the Chief Blogging Officer, or something along this line but perhaps more acceptable to the marketplace.”

Perhaps this is a bit far-fetched and doesn’t really warrant the creation of a new job title. And perhaps all of this is just a natural progression for all those involved in marketing. However, as forward-thinking and as creative traditional marketing people tend to be, there’s mixed emotions about the need to invest in social networking and in developing a lively presence on the Internet. I cannot tell you how many times I have seen the work I create being dismissed as just a series of unfocused opinions!

Ernie’s creation of the LinkedIn user group “NonStop Partner SIG” clearly demonstrated for me how many of us within IT have access to the Internet and how many of us find time to check out sites relevant to the products we work with as part of our daily routines. With travel budgets cut and money for education withdrawn long ago, creative IT professionals, who really do want to know more about their industry and what their colleagues are pursuing, will always find a way to stay current.

Social networking is rapidly becoming the premier vehicle for doing exactly that – so the rapid growth in membership in the NonStop Partner SIG is further reinforcement, for me, of just how many in the NonStop community monitor social networks loosely tied to our profession. There may be concerns over how many social networks any of us needs to participate in but very quickly, it is the content and the “currency” that tend to draw the crowds. Lively discussions on topics of the day will always draw return visits – and we remain curious creatures so will always check back if we have posted a comment ourselves.

Perhaps there are many years to go before we do see the emergence of the CBO! Perhaps it will take a lot more courage (and insight) on the part of our CEO’s before such a role is created. But if today the likes of Ford, Levi Strauss, and Intel already have leadership in place, it can only be a matter of time. Pulling back from 17,000+ mph can release a lot of energy – but so too can hundreds of thousands of networked IT professionals. And there’s no escaping the booms when that happens!

Not unlike email, that seemed to be only a social and inter-company communications vehicle just 25 years ago that has become a legitimate business tool – and as valid as a notarized signatures on a piece of paper, and is used for mega-million dollar transactions - blogging, social networking, and even video communications via the Web, will in time replace big tent events, glossy marketing brochures, and good old snail mail.

On-line education and webcast meetings are becoming pass̩ Рjust give it a couple of years and the need for huge conventions may very well go away! Should we be short-selling Las Vegas convention hotels? I am sure that will make CFOs happy, even as they scramble to find the funding to pay the salary of their newest hire Рthe CBO!

Monday, September 7, 2009

Pour the Chardonnay …

It’s been some time since I was last in Sydney and I really do miss the place. For nearly two decades I have been “commuting” between Sydney and America – often several times a year. After working in the U.S. I returned to Sydney at the end of ’87 so that I could join Tandem Computers in Cupertino. I had been living in North Carolina but U.S. visa rules required me to return to Sydney, work for Tandem Computers (Australia) for one year, and then reapply for a new U.S. visa. The picture I have included here is of Sydney's famous Manly Beach!

All up, not a bad deal as it gave me the chance to convince local Tandem Computers management to create a Tandem User Group in Australia – a community that was launched in 1989. I came up with the name OzTUG and it gained enough traction with the community that it remains active as an organization to this day. In early ’89 I returned to the U.S. and while I waited for the visa, I commuted between Sydney and Cupertino. In all, twelve return trips, as well as the final one-way relocation trip before Christmas, ’89 that gave me 25 Pacific Crossings for the year.

OzTUG flourished in the ‘90s – my good friend Tony Bond, who I had worked with on getting OzTUG launched, had joined the board of International Tandem User Group (ITUG) and in 2000 became the Chairman of the ITUG user group. And with his rise to the chair, and following some lengthy email exchanges, I stood for elections in 1999 and won a seat as Director. It wasn’t long before the support of OzTUG included ITUG Board meetings that were held immediately after their annual events – a simple way to show support and to swell the ranks of participants.

And the strange thing about the annual user event in Sydney, from 2000 on, was that the vendor participation increased significantly. Many executives found Sydney a great place to spend quality time with their users and with few exceptions, you could see all the CEO’s, Presidents, and Managing Directors sipping chardonnay’s and exchanging small talk as dusk descended over the sands of Manly beach. And it was hard to miss the many quiet exchanges that took place between the vendor leadership and the NonStop executives as product and technology strategies were discussed and new opportunities explored.

With what I observed at these gatherings, it was easy to tell that there were different strategies being pursued. Some executives were very eager to work closely with NonStop while others were anxiously pushing for bigger user communities. Everyone wanted to see the size of the NonStop user community grow even larger and were constantly pushing NonStop execs for the inside scoop on what new marketing program was to be launched. From all of the discussions, there were clearly only two paths that these vendors could pursue – expand beyond NonStop and take what they have learnt on NonStop and adding support for more platforms, or expanding within NonStop by either moving up the stack and embracing applications, or adding additional application and middleware stacks.

The ambitions of the leadership of the first group had end-games that resulted in either going public (through IPOs), or positioning themselves for profitable Merger and Acquisition (M&A) opportunities. Prognosis succeeded with its public offering on the Australian Stock Exchange while InSession sold to ACI Worldwide in a deal beneficial to all involved. And for these vendors, their original product offerings on NonStop had been complemented with offerings on other platforms, and with the balancing of their product portfolios that this led to, their valuations improved significantly!

Other vendors in the NonStop space, however, stayed within the NonStop market. I have always been a strong believe in niche markets – particularly when you have products that allow you to successfully penetrate a high percentage of the niche. To competitors, niche’s often look small and the barrier to entry prohibitively high. But for the incumbent, this can be a very lucrative business. In some discussions that I have had of late, some very successful niche vendors are looking to move up from the middleware and infrastructure offerings they provide today, and to test the market by adding applications. With all that’s happening in the financial services segment recently, this could be fertile ground for imaginative vendors with prior experience in this space who see the value in moving vertically to grow their business.

But perhaps the more visible approach by vendors is where those who are successful within a niche, acquire the technology and markets of other vendors in that niche. Probably no vendor in the NonStop market is doing this more aggressively right now than comForte, and it’s clear to many of us who watch this space that the leadership has a strategy of expanding horizontally, adding more products to their portfolio and all the while, growing their international presence.

Last year, we saw comForte buy a number of companies and use the HP Technology Forum as the venue to unveil their first moves to expand. In the press release of June 16, ’08 they announced they had made moves to “acquire Unlimited Software Associates, in and the Intellectual Property Rights for the security solutions from Baker Street Software, Inc and Cross-El Software Solutions, Inc.” But this announcement wasn’t just about products and markets, the announcement went on to add “The North American region is key to comForte and the addition of USA Inc is another major milestone in the execution of comForte’s strategic plan for growth.”

For a European company like comForte, getting a strong foothold in the Americas represented a major expansion of their international coverage. I was very impressed to read only a few days ago that comForte has now purchased Gresham Software Labs (GSL), a NonStop softwar vendor based in Sydney. The origins of this company go all the way back to the small company Tony Bond started after leaving Software Developments International (SDI), the authors of NET/MASTER.

According to the press release of August 28, ’09 comForte said “through the acquisition of GSL, comForte adds the software product ‘The operations Pack’ (TOP) to its portfolio as well as product support staff and a new office location in Sydney, Australia! Dr. Michael Rossbach, CEO of comForte, was reported as having added “its people and products are very complementary to comFortes product and solution offering …the addition of GSL is an important step in the execution of our growth strategy.” Dr Rossback then added “this acquisition is great for comForte’s customers as we are now able to offer real, global 24 * 7 support through the addition of product support staff in Australia.

In a follow-up exchange I had with Thomas Burg, comForte’s CTO, I asked him about the growth strategy, the increased global presence, and whether this was all part of the plan to expand horizontally within the NonStop marketplace. “we are still gaining market share – but we are looking at a broader product set beyond security, emulation, SOA enabling … (comForte) has no plans to go off-platform at the moment, We still see growth opportunities ‘on platform.’” Thomas then added “I don’t think bigger is always better (but) that said, we do believe that 1 + 1 > 2 in case of ‘fitting’ mergers or acquisitions (into comForte).”

comForte represents one of the new breeds of software companies we are beginning to see emerge in the NonStop space. A vendor strongly committed to the NonStop platform that recognizes the value that can be obtained from pulling together many of the smaller vendors and developing programs to cross-sell. It is part of a new breed of vendor I suspect we will be reading more about. Other companies will pursue similar strategies, I am sure, but for the moment, comForte appears to be the leader.

Many years ago I arrived at Manly very early to prepare for the OzTUG event and for the ITUG board meeting that was to follow. I took an afternoon off to walk along the Manly beach and around to the adjacent Shelly beach that backs on to a public nature reserve at the very southern end of Manly. There is a famous restaurant tucked in behind the palms called Le Kiosk – and as I walked past, there was Dr Rossbach, seated by himself at a corner table overlooking the beach, enjoying a quiet glass of chardonnay. From the very brief conversation we had, I could easily see he had fallen for the Sydney lifestyle!

With the announcements coming from comForte these days, and the clear goal they have of growth and better supporting their global customers, I just have to wonder whether the impact of those early vendor gatherings had a deeper impact on Dr Rossbach than I had at first thought. Perhaps this latest move has as much to do with setting up a place of business in a city he is just plain fond of … and I cannot blame him for that or fault the strategy for one minute. Perhaps all I can add is that the commute will be long but Dr Rossbach will surely love his glass of Chardonnay at Le Kiosk – and I’ll look for him there whenever I’m down under.

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