| Regis McKenna is legendary in the ranks of high-tech
marketing. His firm was busy advising would-be MIS kingpins
well before the PC was even introduced. Everybody, it
seemed, turned to him for advice on how to get ahead
in the then-nascent computer industry.
Flash forward to 2003. These days, McKenna is an author
and advisor who sits on the boards of several high-tech
companies. He just published a book entitled "Total
Access" with Harvard Business School Press, and he will
be a keynote speaker at the Spring Storage Networking
World conference in Scottsdale, AZ, April 14-17. He
was recently interviewed by SNW Online executive editor
Bruce Hoard.
Q : What happens to the
IT industry when a new technology like storage networking
becomes prominent?
McKenna : Generally speaking,
we see two broad effects of any new technology. One
is new standards or benchmarks for performance and costs
— i.e., dramatic productivity increases evolve, which
tend to establish new leaders in both the development
of those innovations as well as by early adopters. Users
gain by entering the learning curve earlier than their
competitors do.
The second effect is that industry standards take
a relatively long time to become "the industry standard,"
creating a perception-reality gap. Initially, new products
and particularly new standard-setting concepts are more
costly, complex and generally require more market education
and hand holding.
As Clayton Christensen, author of "The Innovator's
Dilemma" pointed out, new technologies are not immediately
recognized as winners. Yet storage-area networks offer
great promise for focusing network resources and management
on what has become the core asset of every enterprise
— rapid access to reliable data, information and knowledge.
After all, we humans have an insatiable appetite for
information. Note the TV program, "Who wants to be a
Millionaire?" — a show where people are paid a million
dollars to recall a few facts! The last few years of
market turmoil and economic uncertainly only accentuate
and stimulate the demand for more immediacy and accuracy
of information.
Q : The quest for storage
networking interoperability leads to a lot of marketing
hype. Based on your experience, how can users separate
the hype from the reality?
McKenna : Marketing is a
process and not an event. By event I mean theatrical
launches, expensive promotions, a media blitz or road
show. Media hype and event-type promotions are part
of the time-to-market pace set by technology developers/marketers.
They help spread the word, but too often, simply gaining
media attention appears to be an end in itself.
A lot of this messaging is aimed at the analysts and
journalists who are expected to pick and choose leaders
of future technologies. The fact is, new technologies
and standards and the adoption pace evolve over a relatively
long trial-and-error learning process.
Time to acceptance is a better way to think about
it because the market pace in adopting a new technology
is more complex and unhurried even by a media blitz.
New technologies become standards largely through collaboration
between industry players, integrators/solution providers
and strategically selected end users. I look at the
application and solution integrators as distribution
channels. Partnering is essential right now because
adoption criteria for IT/network solutions have become
much more difficult in these days of cost cutting and
downsizing. Everyone has to leverage one another's existing
assets.
Today, we see less experimentation of new applications
and more emphasis on squeezing out the costs and productivity
promises from existing suppliers and solutions.
Q : If you were to sit down
with a client who had a hot new storage networking product,
how would you advise them to proceed?
McKenna : The same as I
did with companies 20 and even 30 years ago, and that
is that you first build a supporting infrastructure
and credible reference base. All IT solutions from the
customer viewpoint are more like heart surgery than
like buying a Coke or Pepsi. More proof-of-performance
and features such as scalability, compatibility and
the value of ownership over time have to be demonstrated.
Vendors must provide more education, user interaction
and have more reference-able users and outcomes in place
to give the buyer confidence.
Anyone and everyone can make claims. Few deliver on
them. Start small and build. I think IT product companies
must focus more on assuring the success of the initial
users or betas. The marketplace is much more complex
today, and while the total markets are getting bigger,
the opportunities are few and competition intense.
Smaller IT companies use much larger partners to build
end-user trust and confidence. For large, established
companies, I would first partner with their existing
customer base and build a beta partnership on new solutions,
allowing them to engage early in the development cycle.
I have used both these approaches over the past several
years, and they have almost always been successful.
Q : Should vendors share
financial risks with their customers?
McKenna : I think it has
to be shared. The vendor-customer relationship is a
partnership, and although it is difficult to place a
value on a future risk/payoff, we know that long-term
commercial relationships do return value. There are
numerous studies showing the high turnover in customers
and the benefits of keeping and leveraging existing
customers.
Any time a user or integrator initiates a solution
within an enterprise, everyone is on the hook. If the
customer sees a long-term advantage, there is R&D as
well as success benefits accrued to both supplier and
user. The customer is going to learn from this, and
that learning curve is valuable to them as much as it
is to the provider of the product or service. So both
vendors and customers should arrive at some sort of
mutual agreement that benefits both sides economically
long-term.
Back in the 1980s when American companies were losing
business due to poor quality, companies such as IBM
and HP began working closely with their customers, sharing
process and quality management information and experiences,
not only to improve design and manufacturing process,
but also to cut costs and increase the value of their
respective products. In the long run, they achieved
strong vendor-customer ties.
Q : Some vendors do a great
job of working closely with their customers, while some
very prominent vendors do not. Why is that?
McKenna : The people who
work closely with their customers realize early in the
relationship process that there is value in a feedback
loop. What both sides must be concerned with is the
concept I mentioned earlier, time to acceptance.
Time to acceptance is particularly important for small
companies who are trying to gain credibility and establish
a standard. I have found that vendors who work with
solution providers or end users early in the development
process tend to get acceptance faster because, in effect,
the early users can help shape the solution and more
often than not also become advocates.
This is not easy. It takes time, investment, experienced
product/marketing people and a willingness to allow
customer input early. Developing a best-practices customer
relationship process, like CRM, requires a management
learning curve, processes and practices that can be
instilled in the culture of the business. Working closely
with customers is not about being friendly. It is about
being reliable, consistent and progressively improving
each other's productivity.
Q : How has marketing changed
over the years?
McKenna : Hype dominates
the very idea of marketing, and despite some vibrancy,
much of marketing has become obscure and even ridiculous.
Thanks to the deafening noise of hype, we no longer
know what is real, what is effective or what common
set of principles should guide the marketing process.
One thing that's clear is that tactics have replaced
strategy. For example, buzzword solutions, promoted
as brands themselves and dispensed by branding consultants,
proliferate. Terms such as "viral marketing" and "buzz"
are some of the latest marketing buzzword brands used
as new tactics for gaining the customer's attention.
And while the terms may be new, the concepts are old.
The original ideas behind these terms have merit, but
such terms reflect tactics that usually rely on traditional
forms of broadcast tactics in an attempt to manipulate
consumer behavior. Consequently, once those ideas are
implemented, they usually end up as programs that generate
more junk e-mail. |
