Marketing IT in a noisy world

Plus, where will VCs invest their billions next?

Seems somebody over at Forrester Research read my recent column on IT product management, in which I took analyst firms to task for not writing about this subject. Research Director Laurie Orlov e-mailed me a study she authored last year, “The Marketing of IT,” with a note saying that product management is a dimension of IT marketing.

True enough. And hats off to you Laurie, for a clearly written and comprehensive guide to all aspects of IT marketing. There’s just one problem: It’s got so many moving parts, and the concepts are so theoretical to IT, that no one will ever do it.

The study suggests creating a marketing plan for IT, for example, based on the traditional “4 Ps”: product, price, place, and promotion (which Forrester kindly translates into more IT-friendly terms). It then advocates executing marketing campaigns relative to IT’s overall messaging and value proposition as well as specific projects or deployments. And, finally, it says IT should focus on building its “brand equity.”

All this would be fine if we were still in the 1980s, when traditional marketing (à la Coca Cola and Proctor and Gamble) was at the top of its game. But big branding and promotional campaigns have lost much of their luster in a noisy world where delivering the goods is suddenly more important than making promises. People are more skeptical than ever about being “marketed” to these days, and they’re less loyal than ever.

Other textbook strategies, such as market segmentation (“lite,” “pro,” “value pak”), are still relevant today, but require a Ph.D. in statistics to process the mountains of data available about small-consumer (or user) niches. What IT needs is something simpler, a way to focus its efforts and deliver value while competing against outsourcers and even rogue IT.

That’s why I like product management -- a simple prioritization algorithm that almost anyone can use to bring products to market: Who is my customer base? What key needs do the customers have in common? How do I deliver the best value for their money in a limited time frame, and thereby stay ahead of my competitors? Thanks, Laurie, for sending your study. Despite my ribbing, it’s a worthwhile read. But we need to figure out how to boil it down to something that can fit on the back of a wallet card!

Brother, can you spare a billion? It’s been a long time since the venture capital world spawned a big, stand-alone enterprise IT company. But that doesn’t mean the VCs aren’t investing furiously in search of the next big thing in IT.

PriceWaterhouseCoopers’ MoneyTree report, for example, shows that in first quarter 2006, VCs invested $1.2 billion in software startups, about a fifth of all VC dollars invested (other big categories are biotech, medical devices, telecom, and media). And a recent Deloitte and Touche survey found that 60 percent of VCs worldwide identified software as their primary target sector.

Just one question: What are they spending these billions on? Can’t you just start an enterprise software company with some open source tools and some good engineers who’ll work for equity because they believe so passionately in the idea? How much do foosball tables cost these days, anyway?

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