In Search of Catalyzing Events

November 15, 2009

Certain events serve as wake-up calls. In the case of some, the anticipation of these events is enough to spark action or change behavior – maybe even spur technology investment. As technology marketers, we need to recognize the opportunity that these events provide. Obviously, we also need to be ready to exploit them.

Which events could be catalyzing events from a technology purchasing decision? It could be as simple as the approach of a new millennium: Y2K fears spurred major investment. New regulation is an easy one to identify: IT buyers scrambled to upgrade security and implement data archiving and discovery software after the passage of the EU Data Protection Act and subsequent country-level legislation, as was also the case following passage of HIPAA, SOX, Basel II and others. The events of 9/11 certainly spurred concerns about cyber and other types of security. More recently, following last week’s blackouts in Brazil, leaders issued new commitments to energy reform. Natural disaster, crime waves and other negative events also catalyze technology investments.

sochi2014But, I’d like to focus on a few that we can anticipate. The Olympics and the FIFA World Cup are two that come to mind. South Africa will host the World Cup in 2010, and has already spent billions on new stadiums, renovations to existing stadiums and upgrades to their communications and transportation networks. Next up for the World Cup is Brazil as the host in 2014.  Two upcoming Olympics venues are also ripe for technology and infrastructure investment: Brazil will host the 2016 Olympic Games in Rio and Russia has already broken ground in preparation for the 2014 Olympic Games in Sochi.  For 2014, an estimated $580 million will be spent on construction and modernization of telecommunications in the region.

They will have large shoes – and Olympic sized budgets – to fill following the Chinese spending spree for the 2008 Olympics. The $40+ billion infrastructure budget included line items like 1 million video cameras as part of the $6.5 billion security budget for Beijing and $300 million for other Olympic venues.  Plus the media coverage of the actual sporting events.  That’s a lot of video to capture, transmit, and store.  US viewers alone downloaded 1.7 million video streams of US relay teams win against France.

In London, which is hosting the 2012 Summer Games, the budget is now just shy of $15 billion. That’s roughly quadruple projections from four years ago. Rio’s projected cost – at $14.4 billion – was the highest budget of any of the four cities competing for the 2016 summer games.

Bottom line: Be on the lookout for events that catalyze technology investments. Olympic events typically have Olympic sized technology budgets.

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Cisco redefines their Global Sales Experience — a virtual event with real cost savings!

October 26, 2009

Cisco recently blew away the numbers on attendance at a virtual event — with over 19,000 attendees at their Global Sales Experience (GSX), their first virtual annual sales meeting.  The largest I’d heard had been EMC’s V-Max launch with almost 9,000 attendees. While Cisco’s was an internal event and not a outward-oriented marketing event, their success is illustrative of the possibilities of virtual events for reaching broad, global audiences.  And, what possibilities there are!

Here are some of the stats on Cisco’s GSX (from the Cisco blog):

  • Participants from 89 countries spanning 24 times zones
  • 3 global Contact Centers (running 24×7 on Cisco technologies) supporting the users (in the environment as well as via phone and email) and providing technical monitoring and support real time
  • 88 hours of consecutive sessions crossing 24 time zones
  • More than 13,000 active players of the alternate reality game (ARG) “The Threshold” (around 7,000 had been expected)
  • More than 8,000 participants in group chat within the “Chat Zone”
  • More than 9,500 playing mini  games
  • Satisfaction scores for the sessions comparative to previous events
  • Offset 84,400 metric tons of carbon dioxide
  • 90% cost savings

The virtual event was long anticipated as Cisco announced cancellation of the 2009 physical event originally schedule for August 2009 back in November 2008.  Cisco’s last physical global sales conference had brought about 5,000 of its top sales reps to San Francisco in August 2008.

With the new event, participation in the sales meeting more than tripled, and costs fell by 90%.  The average cost per attendee went from somewhere over $4000 to just over $400.  That’s huge!

The team used the InXpo virtual event platform but relied on additional help for event production.  A virtual event is a real event after all.  As some virtual event organizers have learned the hard way, event production services can be a key to success — particularly for events of this size and scope. Cisco used used the services of  jUXT Interactive, a part of George P. Johnson.  Cisco’s GSX also integrated their own technology including CiscoTV, Webex and Telepresence to stream content and provide additional security for behind-the-firwall meeting environments.

Congratulations to Cisco on a real success!

Are big companies in big cities different in emerging markets?

October 16, 2009

In a recent discussion with execs at Intel about how to position netbooks into emerging market, someone raised the question about how different technology buyers in metro areas in emerging markets are from those in mature markets.  Are tech buyers in the Tier 1 cities in China — Shanghai, for example — any different from those in New York, London, or Paris?  I was reminded of this discussion when reading one of Mark Beckford’s Disruptive Leadership blog entries. He starts his “10 Things You Must Do To Win in Emerging Markets” blog with:

First a caveat … emerging markets is a catch-all phrase to describe developing countries.  It was coined by Antoine van Agtmael in the early 1980’s to replace the more negative term “third world country.”   It is supposed to designate those countries in a transitional phase between developing and developed status.

But here’s the rub … China is considered an emerging market.  But I wouldn’t call Shanghai or Beijing an emerging market because income levels, as well as PC, internet and mobile phone penetration are approaching levels found in developed countries.  But a significant area of the country, specifically the 800 million or so people in rural towns and villages, would truly be considered an “emerging market.”

Well, yes and no.  While income levels, technology adoption and internet penetration may be increasingly comparable to more mature markets, buyers and buying behaviors even in Tier 1 cities of emerging markets are not — nor are the political and economic environments, nor the perceptions and general outlooks on life and opportunities.  To illustrate the point, I took a basic cut of Forrester’s Global Budgets Survey data for two categories “emerging markets” and “mature markets.”   Cut this way, the data obscures country characteristics but I wanted to test the hypothesis that big companies in big cities in emerging markets are no different from those in mature markets.  Forrester’s survey included only companies of 1000 employees or more and sampled only in major metropolitan areas.

In fact, buyers and buying behaviors are significantly different.  I first looked at the question “What is the outlook for your industry in 2009?” Obviously, economic conditions differ across markets.  Companies of the same size and industry, even operating in large metropolitan cities, operate in different markets — and face different business outlooks.  While most respondents thought they faced a “somewhat challenging” year, three times as many in emerging markets expecting the year to be “very good.”2009Outlook

Asia_economistIt’s not surprising that buyers in emerging markets express more optimism than those in mature markets.  Most of the large technology companies are seeing emerging market revenues growing as a percentage of total revenues.  And, news sources are reporting “Asia’s astonishing rebound” and the Middle East “Waking from its sleep.”

A number of other local political-economic factors influence not only what buyers in emerging markets purchase but how and why.  In response to the question about which actions “you expect your firm to take this year as a result of the current economic conditions,” respondents in emerging markets were more likely to:

  • Defer capital expenditures
  • Reduce costs of energy
  • Reduce use of contractors or consultants
  • Increase ROI justifications for projects.

They were much less likely to:

  • Implement staff layoffs or hiring freezes

Many of these responses are not surprising.  Deferring costs and increasing financial justification for IT projects reflect the high cost of capital in many markets.  A preference for maintaining IT staff and reducing dependence on outside contractors or consultants reflects a relatively low cost of labor.  Concern over energy use reflects both the cost of energy and in some places the reliability of electricity sources.  Interestingly, while more respondents in emerging markets actually account for energy costs as a separate line item in their IT budgets, fewer report specific initiatives to “go green.”  The “green” message is not one that resonates, although cost-savings and energy-efficiency does.

Major technology and management related themes also differ across emerging and mature markets.  When asked “Which of the following initiatives are likely to be your IT organizations major technology-related themes for 2009?” IT decision makers in emerging markets are more likely to prioritize:

  • Significantly upgrading your security environment (critical priority)
  • Consolidating IT infrastructure (high priority)
  • Adopting or increasing your use of software-as-a-service (high priority)
  • Improving the measurement of IT’s impact on business performance (high priority)

In mature markets, there is a greater focus on:

  • Implementing or expanding mobility initiatives  (critical priority)
  • Rdesigning/redeploying IT’s architecture, eg. implementing SOA (critical priority)

I’ll save my thoughts and the data on business drivers and buying patterns for another entry.  For now, it seems clear to me that despite similar sizes and metropolitan areas, technology buyers in emerging markets are different than those in mature markets.  They do not share the same outlook or priorities, and certainly face different market environments.

Reaching real tech buyers in emerging markets virtually. Really!

October 14, 2009

Not all technology buyers in emerging markets are accessing the internet from mobile phones or dial-up connections.  In fact, many places in countries considered “emerging markets” are rapidly resembling more mature markets, in income levels and especially in mobility, internet access, and now broadband penetration.  Shanghai, for one, is probably better connected than some cities in the middle of the US.  What does that mean for technology marketers?  It means that they can leverage their complete toolbox of marketing tools to reach those audiences — and increasingly they are doing just that.

One tool that is rapidly entering the mainstream is the use of virtual events to connect with audiences far andvirtualevents_emergingmkts wide.  In Forrester’s Business Data Services Global Technology Adoption Survey, IT decision-makers in emerging markets report greater use of virtual events to inform purchasing decisions than their mature market counterparts — 42% in emerging and 37% in mature markets.  When compared to physical events, buyers in some countries — Chile, Mexico and  Vietnam — participate more in virtual events (see figure).  And, tech marketers are paying attention.  One of EMC’s virtual launch events attracted almost 8,000 attendees from over 80 countries.  And, you don’t have to be big to have that success.  Quest Software’s 2008 Quest Connect event attracted almost 1500 attendees from 20 countries.

Stay tuned for some tips on how to plan and execute a successful global virtual event.  And, in the meantime, take a look at my recent Forrester report, “Reach Real Global B2B Tech Audiences With Virtual Events: New Tools And Best Practices For B2B Marketing Beyond Borders.” And, attend my upcoming Forrester Teleconference, “Reach Real Global Audiences With Virtual Events,” on Monday, October 19, 2009, 1:00 p.m.-2:00 p.m. Eastern time (18:00-19:00 UK time).

What keeps your customers up at night?

October 9, 2009

Adapting marketing messages to specific audiences is a topic I’ve written on here and in a few of my Forrester reports.  Getting the messages right requires an understanding of the drivers and motivations of buyers.  And, going into new geographical markets means that you’ll need local knowledge; you can’t assume that you know what will resonate in a particular market.  Recently I came across an example that illustrates the point in The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World, by Jacqueline Novogratz, Founder and CEO of Acumen Fund.

In 2002, Acumen Fund began investing in the production and distribution of insecticide-treated bed nets in Tanzania.  While initial investment enabled increased production, and subsequent grants hAcumen_bednetselped distribute the nets to at-risk groups, the Acumen Fund’s mission is to promote social entrepreneurship primarily through market mechanisms.  They wanted to extend distribution beyond give-aways so that nets would be available to everyone.  So, they worked to kick-start a distribution network of sales women who sold door-to-door and at “parties” similar to Tupperware or the Avon lady… I’ve digressed but only to establish context.

One woman particularly successful at selling nets demonstrated that she truly understood her audience.  Rather than pitching the nets through public health messages, she appealed to what she knew would really motivate her potential buyers.  Rather than “must” or “should” and details of health improvements, she focused on beauty, vanity, status, and comfort:  the nets got rid of insects buzzing in your ears and made it easier to get a full night sleep; with more sleep the children would do better in school; the nets are colorful and decorate the house; and when neighbors see them they will be impressed with how well you are caring for your family.

The example is bed nets in Africa but the lesson applies to any product or market.  Knowing what keeps your potential customers up at night — whether it’s mosquitoes or cost or competition — is key to crafting the right messages.

Bridge the Financial Divide with Netbooks

October 1, 2009

There was a great mobile banking article in the Economist last week.   It reminded me of a report written by GSMA on its Mobile Money for the Unbanked initiative that came out a few months back.  The GSMA report points out that mobility penetrMobility_FSaccessation is much higher in emerging markets than is access to financial services — an opportunity for mobile operators and banks to work together to bridge the financial divide.  So, I began mulling the opportunity that these trends provide for netbook adoption:  why don’t netbook vendors partner with local banks to deliver financial services via 3G-enabled netbooks.

Mobile banking has taken off through cell phone access, particularly in Africa and the Philippines. Smart Communications in the Philippines launched its SMART Money initiative in 2000. In 2004 and 2005 some of the first innovative deployments of mobile banking in Africa were launched in South Africa— by WIZZIT and MTN Standard Bank respectively. Safaricom and Vodafone launched M-PESA in Kenya in 2007, with growth of up to 10,000 new users a day, and now over 5 million customers. More recently, MTN announced expansion of its Mobile Money service to its over 80 million subscribers in 21 countries. And, Vodafone will soon replicate M-PESA scale in Tanzania, Zain launched ‘Zap’ in Kenya and Uganda with plans for a broader rollout.  Orange is also piloting a deployment of Orange Money in Cote D’Ivoire.

Combining the momentum of mobile banking and the lively SMB segment, banks in emerging market have an opportunity to equip small businesses with netbooks.  Again, recalling my previous post, for many in emerging markets a netbook is a step up as an internet access and business device.  Sounds like a win-win all around.

Re-write the netbook story for a wider audience

September 24, 2009

Netbooks have cOLPCome a long way from their first appearance as the low-cost device for students in emerging markets — the “$100 laptop” distributed via the One Laptop Per Child (OLPC) initiative.   In fact they’ve come so far that they’ve apparently forgotten their roots.  Netbooks are now — like the pug in my previous post — an “accessory” or a “companion.”  But, neither of those messages resonates well with some audiences — like B2B buyers — or in certain parts of the world — emerging markets.   Netbooks are much more than luxury goods.  And, they don’t need to be relegated to children or students in emerging markets.  Many business users don’t need all the computing power in vivenne-tam-netbookmost desktops or laptops.  In fact, for most uses a netbook is more than enough.  And, for users buying a computer for the first time — and perhaps replacing their mobile phone as their primary internet access device — netbooks are by far an improvement: imagine a full screen and a real keyboard for the first time.  Or imagine not having to go to an internet café to use a PC.  Yes, netbooks are a great device for businesses in emerging markets.  Let’s hope that netbook marketers don’t just focus their attention on the fashion runway.

My upcoming report “Re-write the Story on Netbooks: Get the B2B Story Right for Netbooks in Emerging Markets” will be out soon.  Stay tuned.

Global versus local: how do you get the messages right?

September 16, 2009

Some people melt over images of dogs; others recoil.  But, there is apparently a wide range of reactions in between.  And, one of HSBCs airport ads expresses it well.  Not only are there different emotional reactions to images: images also evoke different meanings for people.  An HSBC ad in Heathrow Airport in London shows a simple image of a pug (those small dogs with the wrinkled up faces) with three words: alarm clock, companion, accessory.    Unfortunately I didn’t take a picture.  I only wrote down the words.  Fortunately, I did that.  As I was describing it to someone without looking at my notes, I included “nuisance” among the words — guess that’s says something about what the picture meant to me.

SaaSreasons

(Click for a full-sized version)

The point of all of this is that marketing messages and images speak differently to different audiences.  Crafting messages that resonate best with a specific target audience requires localization.  For B2B audiences, it helps to know what the business drivers are for the audience: what are the goals of the company, what are the objectives set for specific organization, what are the things that keep the boss up at night.  For example, IT decision-makers across different regions adopt software as a service (versus purchasing licenses of a product) for a variety of reasons.  Understanding those reasons helps to determine the messaging that would resonate best with those decision-makers.  The data suggest cost-efficiency and ROI messages for some regions — North America and Western Europe— and time-to-market and competitive advantages in others — Asia Pacific and Middle East, Africa and Russia.

Global marketing also requires a degree of consistency.   How do you strike that balance?  My new report — Get the B2B Messages Right: Balance Global Consistency And Local Relevancy — discusses the challenge of getting the global messages right for local audiences, and provides some recommendations for how to do it.

Where are tech buyers getting their information?

September 3, 2009

Just wanted to call attention to a couple of new Forrester reports.   I’ve started drilling into the Four Ps — mostly on the promotion front.  Here are a few highlights:

“Vive La Difference” looks at how buyers across North America and Europe inform their purchasing decisions — looking at both how they interact with and leverage social media and which information sources they prefer.  News flash: business buyers do use social media to inform their business decisions.  The results show that tech buyers are more socially active than the overall adult population, and they are using social media tools for work purposes.  But, that use is not consistent across countries.  More technology buyers in France and Germany spend time creating content — likely reflecting language differences and the need for local language content. More respondents in France and Germany also review, rate, or comment on social content.  North American respondents use more social media for work purposes; of all, French respondents were the least likely to use social media for work purposes.

Looking at both traditional and social information sources, there were commonalities and differences.  All respondents rely first and foremost on their peers and colleagues for information.  Beyond that, though, information sources differ across countries.  Some of the most striking differences are between our French and German respondents: The second most significant source of information for German respondents is industry events, trade shows, and conferences; for the French respondents, their direct sales person was their No. 2 source. For tech marketers, the message is clear: Participate in German trade shows and invest in French sales competence and collateral in France.

Following that first regional look at information sources — or marketing vehicles — we took a broader look beyond just mature markets to include emerging markets as well.  The landscape in emerging markets is even more complex. Unlike mature markets, there is no clear No. 1 information source common across emerging market countries. Social media sources rank much higher in emerging markets than in mature markets — but not always the same tools. Overall rankings show that in aggregate across emerging markets the highest ranked sources are only used by a little more than half of respondents (52%) — unlike their peers in North America and Western Europe, where there was a resoundingly common No. 1 source. However, in most emerging markets, social media sources fall into the top 10 — with some as high as No. 3 in Vietnam, No. 4 in China, and No. 5 in Chile. Tech marketers take note: The common thread across emerging markets is not a specific source but rather a greater reliance on new social media to inform IT purchasing decisions.

Revisiting the Four Ps of Marketing

April 1, 2009

It’s now been so long that I almost feel I should blog about not blogging. And, renew my commitment to getting myself out there in the (dare I use the term) blogosphere. But, I won’t.

The first thing I’ll do is point you to my newest research report, just published yesterday — “Expanding Globally, Marketing Locally: Adapting the Four Ps of Marketing to New B2B Markets.” As one of my colleagues commented, it’s “back to the basics.” (Gosh…I hope he didn’t mean that pejoratively.) A fresh look at the basics is always of value in my book. And, admittedly, I wrote it as much for me as for anyone else. I wanted to lay out a structure for myself and for my future research. Next comes deeper dives into some of the topic areas. But, the structure is there and we can all reference it — me, my colleagues, and our Forrester clients.

moulinrouge_larger3Also feel free to listen to a Forrester Teleconference that I gave last week on the report.

NOTE: This post was transferred to its new home on this blog on 8/28/09 by Zachary Reiss-Davis