A marketing foray into Cloud Computing - Part 2 - Riding the Hype Cycle

Let’s start to take a look at the bigger picture of what’s happening in cloud computing.

As Gartner says, “The hype is deafening” or as one old-hand salesman told me, “As for cloud, there are more people out there selling PowerPoint presentations than anything else.”

It’s unsurprising, therefore, that cloud computing is at peak of Gartner’s Hype Cycle, what they call “The Peak of Inflated Expectations” “in which a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.”

For the vendor, it’s important to associate their business with the new upcoming technology, to position themselves for the future. For the customer, it’s a maze of bewilderment and confusion where it’s difficult to discern what’s real and what’s hype.

From a Rocket Fuel perspective, we believe it’s important for technology companies to balance their bold, exciting visions with practical offerings that customers can buy into now. This is the place where you need to build up a head of steam to withstand the stormy seas that follow. So it’s “head in the clouds and feet firmly on the ground” time for us.

The next stop on the Hype Cycle is the “trough of disillusionment” where companies having failed to meet expectations, see the market fall away from underneath them. Getting through the trough is a hard slog and may call for some “strategic re-alignment” but keep your stake firmly planted in the ground of the new (but temporarily discredited) technology and go back to re-stating core benefits and customer value. The technology will be back. This is just the swing of the pendulum away from the hype in an opposite and equal direction. Steel your courage and stand your ground and remember that this is what negative hype feels like. It’s still hype. Not all companies survive the trough. Some of the early trials end in highly publicised failures. Media interest wanes, except for a few cautionary or sensational “bad news” tales. A significant amount of vendor consolidation and failure occurs.

Here’s Gartner’s hype cycle as at August 2009 with cloud computing at the peak of inflated expectations:



There are some companies hyping cloud that describe it as a “disruptive technology”. It’s not. It’s the same server, mass storage and applications technology that one might buy and use in-house deployed via a disruptive business model. The cost arguments for customers are very compelling. We’re aware of some IT-based businesses that have made savings in direct and indirect costs of over 40% of their total cost base by implementing a cloud strategy.

Cloud has sufficient market impetus to change the computing landscape forever. There will be traditional hardware (and software) product vendors who resist or fail to rise to the cloud challenge. During the last major shift towards client / server PC-based technologies back in the 1990’s, there were some very big name computer vendors that became casualties of the market change. They tried to hang onto the “mini-computer” IT business model that was being supplanted by client / server. If you’ve been doing this as long as us, then you’ll surely remember names like DEC (Digital), WANG, Data General, Prime and Tandem. Most of those companies disappeared from view in a two-year period in the late nineties.

There is a way through all this turmoil of change. And it’s through excellence in marketing, both at the strategy and execution levels. Rocket Fuel can help your company ride through the change and succeed through to the mainstream market. The hype cycle can be a choppy ride and we’ve been through it before. We know what you need to do now and what you need to be selling to succeed in this market. There are some fortunate businesses that may be able to force their way through with financial muscle. Others will fall by the wayside. We can make a difference, so why not get in touch to discover how we can help.

In our next piece we’ll look at key issues for both customers and vendors approaching the cloud based on our own detailed research. Why not subscribe to our blog by e-mail to stay in the picture and keep in the game.

The Positioning Claim - The Elevator Pitch is Alive and as Well as Ever!

I’ve never been one for slogans, mantras or corporate exhortations but recent experience of technology launches has restored my faith in the “elevator pitch”.

We understand reservations about the elevator pitch that can be as predictable, vacuous and vapid as speeches made at a beauty contest, but the principles and objectives still hold good. What’s more, where it’s well delivered the elevator pitch can instil confidence, passion and enthusiasm for a product launch.

We probably prefer the version proposed by Geoffrey Moore in his classic work on product launches, “Crossing the Chasm”. Here’s its structure:

For (target customers)

Who (have the following problem / need)

Our product is a (describe the product or solution)

That provides (cite the breakthrough capability, innovative qualities)

Unlike (reference competition)

Our product/solution (describe the key points of competitive differentiation)

This approach works. Its immediate focus is the customer and what our product does for them so it’s externally directed. It moves on to establish clear utility, distinguishing qualities and competitive differentiation. That’s not a “Miss World” speech but the nub of communicating a product’s raison d’être to the world.

The exercise is dismissed commonly because a company feels that it’s passed a certain point of maturity and doesn’t need anything as basic as an elevator pitch anymore.

There is stuff out there particularly in the consumer space that defies description and communicates nothing. But this is more often in mission statements that are meant to attest to a company’s values and beliefs. Here’s one that makes me want to shout out loud and run for the hills:

Starbucks: To inspire and nurture the human spirit - one person, one cup, and one neighbourhood at a time.

And I thought I was just having a cup of decent coffee…

That’s an aside.

Back to the elevator statement that’s the basis of our product positioning claim. Without the claim, it’s difficult, if not impossible to communicate our product offering concisely by word of mouth. It’s more than likely that marketing materials will be all over the place with each presentation picking up on a different aspect and generating a new version of positioning. The marketplace will be uncertain about what’s being offered and become confused and hold back until it's clear. There are implications for virtually every aspect of a company’s business – for its employees, its channel partners, its investors, its R&D and its communications.

Failure to establish a clear positioning claim is not simply a problem for new businesses. We see it all the time and we’ve seen it in the last month too: great companies with competent professional staff and a great product idea whose launch event has been little more than a general treatise on the state of some new technology or other. There have been analysts, media and investors in the audience who’ve walked away asking the question, “Where does X product fit?” or worse, "What is X product?" and customers asking, “Is X right for me?” They don’t know as no one told them. This may or may not have anything to do with a company’s core competence in marketing. It may simply be that external event organisers had little understanding of the brand, the product claim or their client company’s strategic intent.

Finally, developing a good “product claim” isn't easy. Not only does it need to be simple, clear and easy to comprehend; it needs to be realistic, defensible and true. It needs evidence to support its veracity. If there’s no evidence, the competition will drill holes through it. Invariably the product claim won’t be right first time. You’ll need to communicate the claim and listen and respond to feedback to get the messaging right. You may well have to make adjustments to its language so it sits well with your audiences and their vocabulary. Competitors will pick at the initial claim and it will need adjustment and fine-tuning probably throughout the entire life of the product. It’s this aspect that makes positioning a dynamic process rather than a one-off event. As Geoff Moore puts it, “(this) means marketers revisit the same audiences many times during the life of a product. Establishing relationships of trust, therefore, rather than wowing (the customers) on a one-time basis, is key to ongoing success."



Geoffrey Wilkins