Product Management - Design for Sustainability

Design for sustainability (D4S) is fast becoming a a baseline standard for new product design in several sectors. Construction industry has taken a lead in terms of defining standards for sustainable buildings and followed it up with certification programs. LEED Certification for buildings has become mainstream in the US and similar certification program from IGBC is taking roots in India.

2015 United Nations Climate Change Conference begins in Paris on November 30th 2015.  As world leaders talk and negotiate deals on global climate issues, we as product managers can do few things on developing sustainable products.

A truly sustainable product is one that:

• Uses the waste of other processes as its input, and minimizes or eliminates the use of virgin materials extracted from the earth
  
• Creates output that can be used by other processes or returned to a natural state, and eliminates waste that can't be used or returned to a natural state
  
• Uses the least amount of energy to manufacture the product and to achieve the desired outcome.

Today, Sustainability can no longer be just a buzz word. Today, Sustainability has to be the core in companies at a variety of levels starting at the highest levels.

1. Strategy. 
Some companies decide what to make or do based on sustainable business
ideals. Godrej Group has made environmental sustainability as a key part of its
business strategy. Godrej Properties - the real estate arm of Godrej has been a leader in Green buildings and is a sponsor of IGBC Green Building Certification program.

2. Supply chain. 
Retail companies such as Walmart requires its suppliers to disclose and evaluate full environmental impact of their products. Companies are now paying deep attention to industrial ecology, which analyzes all the material and energy required to create the product. This often extends beyond the domain of a single business and right to the basic sources of raw materials. For example, retailers such as Tata Chemicals is promoting Organic food products under the brand Tata Shakti, Starbucks is promoting Fair Trade Coffee etc.

3. Operations 
Decisions about how to make and move products increasingly reflect environmental impacts. Companies are now looking at all levels of operations to lower energy usage and now have created Environmental Management Systems (EMS), which have operationalized the tracking, documentation, and reporting of environmental impacts by day to day operations. The businesses can no longer hide from legal implications of negative environmental impacts. In case of several industries, there are several legal or regulatory requirement to adhere to minimum environmental practices.

4. Product development & design
Companies have incorporated sustainability into their new product development process in ways ranging from specifically creating "green" products. Sustainable products are those products that provide environmental, social and economic benefits while protecting public health and environment over their whole life cycle, from the extraction of raw materials until the final disposal.

Many faces of sustainable product design

Now that I have given a bit of background on sustainability, let's talk about sustainable product design.

Sustainable design is the term we've chosen to represent the intelligent application of the
principles of sustainability to the realm of engineering and design of products.

The term "sustainable design" is just one holistic term used to describe the use of sustainability principles in the design and development of products. This includes sustainable engineering, environmentally sustainable design, eco-design, and green design.

When products are to be designed for sustainability, there are several factors that needs to considered during the product design stage:

1. Design for Environment
2. Design for Disassembly & Recycling
3. Design for Energy Efficiency
4. Design for Health & wellness
5. Green Marketing

Design for Environment 

The Objective here is to minimize pollution and thus reduce human and environmental risks that the product entails. It means designing products that should be safe (both during operation of the product and after disposal) for human health and the environment. It could mean use of green chemistry - products that leave no or minimum residues or chemical that are biodegradable etc.

This starts with identifying industrial & institutional products that are deemed to be safer for human health and the environment through an evaluation, define best practices and identify safer chemical alternatives.  

At this stage of product design, It also involves identifying use of sustainable raw material inputs for the product and also use of recycled raw materials.

Design for Disassembly

This design aspect is essentially to address the end-of-life phase of product by designing the product that is easy to disassemble and enable the easy recovery of parts, components, and materials from products for recycling at the end of their life.
Recycling and reuse are a good way to create a sustainable world, but it requires products that can be disassembled cleanly and effectively. Design at this stage is primarily focused on end-of-life considerations as one means of encouraging more environmentally conscious design and greater resource conservation.

Design for Energy Efficiency

Environmental impact of product over the lifespan of the product has to be considered. Products must be designed to minimize the environmental impact. Product must be designed to use minimize energy usage during its lifetime. Every version of product must review the energy usage and develop new technologies to reduce energy usage.

Design for Health & Wellness

All products have to be used by people and during its life span, the product must not emit any hazardous outputs that impact health & wellness of the operators. This includes chemical vapors, heat, light, noise or electromagnetic radiation which adversely impact the health & wellness of the operators. For example, design newer cell phones that emit lesser radiation.

Products that use volatile chemicals in form of adhesives or paints must be designed to use chemicals that emit less or does not cause any harm.

Green Marketing

Green Products can have a powerful advantage. Companies find that green products and  promoting the environmental responsibility/benefits of their products has a powerful marketing angle. Touting the "green" aspects of existing products, processes, or systems has immensely  benefit product marketing.

From product design perspective, it helps product designers and product marketing to work together to know what benefits of their sustainable design and engineering efforts can be claimed publicly.

Green Product Leadership  

Developing Green Products often requires taking a leadership position for the extended product supply chain. This requires voluntary partnerships among manufacturers, retailers, government, and non-government organizations to set up effective green supply chain systems and practices. For example, in case of cell phone batteries - it will require working with raw material suppliers and also product recyclers and environmental agencies.

Taking product leadership means encouraging more environmentally conscious design and greater resource conservation. Working with various public and private sector stakeholders, to promote 'greener' design, setting up greener product standards, and establishing greener purchasing practices.

From Green Product Leadership perspective, there are many ways to create environmentally sustainable business ecosystems. Sustainable design is just one aspect. Designing products for a broader purpose by matching user needs with right products that last for the lifetime of the customer needs, will eventually change customer behavior and sustainable designs can influence user behavior for a more sustainable use cases.

While designing green products, one must think in terms of whole systems, the ecosystem context, product service and the supply chain. Only then the product will be really "green" and help create a sustainable world.

Closing Thoughts 

We are now at the start of establishing an ecological civilization. The old thinking of industrial civilization that sees the relationship between humans and nature as opponents, and uses technology to tame the wild nature - must go away.

Sustainable products and Green engineering looks at the relationship between humans and nature as a harmonious symbiotic relationship.  

Building World Class Products

When we think of building world class products, few companies come to our mind instantly. The top one for most people is Apple, Microsoft, Google, Coca Cola, Toyota, McDonalds etc. These companies are well known for their successful products - super successful products.

When we look deeper into these successful products, we also find several common traits across these products - which helped them successful in the first place.

In this article, I will talk about one common factor: Product Development Process.

Successful companies have developed a well defined process for developing new products which at a high level can be broken down into 5 distinct stages.

1. Product Strategy
2. Product Design
3. Product Development
4. Product Marketing
5. Product Maintenance

Each of these stages by itself can offer unique competitive advantages, but the key for success is to be good in all five stages. To understand this better, let me explain each of the five stages.

Stage-1: Product Strategy

At the highest level, Product Strategy addresses the question: Why are we building this product?

This is the initial phase that starts off with the basic rationale for the very existence of the product. Starting with a well defined problem statement and being thorough and accurate about the reasons for developing the product provides a stable platform upon which one can build a successful product.

Since the product will evolve over a period of time, it is important to have a roadmap to achieve the product goals over a period of time. The roadmap defined a set of steps that will take the product from start to its intended goal - which answers the question: Why are we building this product?

Having a well defined product strategy itself provides a solid competitive advantage - as it gives a solid foundation upon which one can take quick decisions.

When defining the strategy, the starting point must be: How will this product will bring in revenue?
Having a clear revenue model at the start will help immensely all through the product life cycle. The revenue models will help in product design and product development.

The second question is to address the primary purpose of the product: What customer problem is it solving? The primary purpose will define how the product is designed, how users will interact with the product and what the user experience with the product should be?

Answer to this question will determine the distinct set of features, functions and requirements to considered during product development. This will also help in organizing all the features, functions and requirements for subsequent releases and help create a product roadmap.

Third question to ask is: Who is our competition?
Having a complete competitive analysis will help understand the market better and also learn from mistakes done by competition, so that this new product can have strengths where the competition is weak. Doing a competitive analysis will help avoiding reinventing the wheel. If the competition is doing something that works, then it is best to copy it.

There are three outputs from this stage of defining the product strategy:

Output-1. High Level Goals
This consists of the best possible business model for the product. It also defines the success criteria for the product. The business goals must be simple enough for everyone to understand and must not have any contradictory goals.

Output-2: Define the customer problem which the product will solve.
Create a statement of the problem(s) or need(s) the product will solve for customers. Having the problem/need and solution properly will provide valuable guidance for product development teams.

Output-3: Competitive Landscape. 
Doing due diligence on competitive landscape will help cut down the development time and avoid reinventing wheels. Knowing what works in the market will help big time when developing new products.

Product Strategy forms the solid foundation in which the success or failure of the product rests. One cannot afford to by-pass strategy definition stage and hope to succeed.

Stage-2. Product Design

Once the broad product strategy is defined , the next most important stage is to come up with the product design

At the highest level, Product Design addresses the question: How are we building this product?

Once the strategic foundation for the product is defined, the work on product design has to start. In this stage there are two very important questions that needs to be addressed:

1. What should be the user experience?
2. What technology platforms must be used?

One must take a wider view when considering the user experience of the product. It must include all aspects of user experience such as User interface, functions, product performance, product stability, reliability, etc. It must cover all aspects of user experience from the day of first usage to its eventual retirement. For example, Apple iPhone is designed with the user experience from the moment one walks into the Apple store, includes the packaging - the experience of opening the product package, the usage experience, and even product return.

The goal of product user experience is to be "Awesome". It must be this word that customers will use to describe your product.

Product Technology Platform is the next critical aspects that needs to be defined. In today's rapidly changing world of technology innovation, having the right technology platform makes a BIG difference.

What denotes the right technology platform depends on the product segment. For software it may be a set of underlying software development tools and development framework and the underlying OS and deployment methods etc. For computer hardware, it could mean a x86 processor or ARM or Qualcom etc.

The underlying technology framework must address questions such as:

1. Do we have the necessary skills in house to use this technology?
2. How does this technology offer intrinsic advantage?
3. Does this technology provide all the functional elements needed in the product?
4. Does this technology allow the product scale or perform at the levels expected by power users?
5. How does this technology help in the over all  design & architecture of the product & subsequent portfolio of products?
6. How does this technology help the product fit into the customer ecosystem?

The most important aspect of design stage is to ensure that people with right design skills are working on it. Often times not having the right skills hampers the design process and severely handicaps the product - which will result in product failure.  It is best to hire external consultants during the design stage and get the best of design talent.

Selection of underlying technology platform is a core engineering function that defines the product's user experience from start to finish that can eliminate problems for both the developer and users for a long period of time as defined in the product roadmap.

At this stage, Product design is not about the actual development of the product - but it is defining the tools and the framework upon which the product will be built, supported and sustained.

Note that doing competitive analysis and market analysis before embarking on product design stage can benefit immensely - as one can learn from competition and market landscape in choosing the right technology framework and also defining what the user experience should be.

Knowing what the customer expect from existing competition and their current user experience will help in a big way to create a better product.

There are few best practices that are generic enough to be applied across different products. Some recognized best practices are:

Take time to complete the design. Avoid the rush to start development as soon as possible. Instead make sure that the designs are complete. This will save time, effort and big costs later in the project.
Long time ago, when I worked on a SoC project at Silicon Valley, we spend nearly 25% of the project time in the design phase. Every aspect of design was completed, the choice of CPU cores, Memory modules, and other hardened IP was first determined, even the power envelope for the product was designed and calculated, the overall design layout of the chip was almost finalized before the actual development started. The result was a blockbuster product.

Document the Design. Spending time in documentation of the design, the requirement analysis, functional features etc. saves a lot of time during implementation. The design document serves as the product blue print.

Cut all dead wood.  Typically while designing new product, there will be demands to maintain some legacy aspects for backward compatibility. While some of the legacy requirements make business sense, some do not. Review all the legacy requirements and eliminate those which does not make business sense. This might take some bold design decisions. For example, Apple's decision to eliminate floppy drive in iMac or eliminating DVD drives in MacBook Air.

Consider the overall product ecosystem for the product. The end product must fit into the user ecosystem. Ignoring the strengths of the existing ecosystem can hamper the success of the product.
Involve  the development team. Make sure that the development team is involved in design process as early as possible. This will help them prepare and develop the product faster and better.  Product development team can provide valuable insights from start to finish and can eliminate problems.

Involve product support & customer service teams in design stage. Getting inputs from product support & service teams will help design the product for better serviceability. For example, developing software with better debug messaging will help resolve customer issues faster when the product is deployed at customer site.

Additional best practices can be learnt from experiences of other companies & competitors. There is no shame in copying and learning from other industries either. Learning from others helps lower costs  & time taken for product development.

Stage 3: Product Development

This stage answers the question: "How do we create this product?"

Once the product design is complete and design is documented, the next stage is to build the product.

During the development stage, there are three critical factors one need to consider.

a. Customer Feedback and Acceptance
b. Development Program Management
c. Product Testing & QA

a. Customer Feedback and Acceptance 

It is a good practice to involve a customer in product development stage. I have written a detailed article on co-development with customer See:

Getting customer buy in on the usability of product functions, features and user interface during the development time speeds up customer acceptance of the product and lowers the cost of sales. Developing products with constant customer interaction helps, but one also needs to know where to draw the line when it comes to meeting customer demands. For example, Google runs a long Beta program during which it collects lots of customer feedback data and tunes the product accordingly.

Ideally, the Beta program need to be designed into the product development process - so that it can be managed for optimal outcomes.

b. Development Program Management

Program management is another vital aspect of product development. No product development project will be successful without a strong program management. Program management plays a critical role in providing leadership, helps coordinates various development teams and ensures timely results.

In product development, there will be several different teams (development, release management, legal, documentation, marketing, finance, etc.,) working on the product and these teams could be globally distributed. So it is the role of program management to coordinate between the teams and provide arbitration between teams to ensure timely outputs.

Program management brings various stake holders together and facilitates decision making and in cases provide leadership to product development teams.

c. Product Testing & QA

Quality is a default expectation today. Competition will ensure that any slips up in quality is punished. So there is no room for error or slips in quality. In many cases, customers can also sue the vendor over defective products, or regulatory agencies can levy heavy fines. Thus slipping on quality is non-negotiable.

Another aspect of quality is performance. Product developers must keep the user experience top of mind and ensure performance of the product is not compromised.

All this implies that one needs to invest heavily on quality assurance process and testing.

However, the pressure for rapid product development and the need to shorten the development cycle is leading to cut backs on testing - but will always boomerang in form of product failures, higher costs of product support and need for bigger sales/marketing budgets.

In my opinion, it is better to spend a dollar on QA first - rather than spend the same dollar on customer support issues or product marketing.

Stage 4 – Sales & Marketing Strategy

As the product is getting built, one needs to answer the question: "How do we sell this?"

Today, markets area already over saturated with products. Even if there is a real customer need, getting the message to the customer is turning out to be a big challenge. Product sales strategy is essentially a plan that addresses this challenge. While sales and marketing departments have to operate in close cooperation with product development - mainly because there are several sales/marketing decisions that impacts product development:


1. Product Release schedule
2. Product Distribution Channel
3. Product Bundling
4. Product After sales support
5. Product Training
6. Product Pricing
7. Product Revenue Forecast
8. Actual Product Revenue.

There are whole books being written on sales and marketing of products and this article cannot do any justice in giving a complete sales & marketing strategy.

Sales strategy has huge impact on product pricing and product release strategy, So defining the sales & marketing strategy at the time of product development is absolutely vital.

Stage 5:  Product Maintenance & Customer Support – 'Making It Sticky'

In an ideal world, customer just buy the product and use it without any problems. They never have to contact the manufacturer and keep buying more and more of the product. But in real world, businesses must constantly elicit feedback and help customers use the product. This is the function of product maintenance and support.

Customer support strategy often serves as the feedback loop to the overall product strategy and product design. Issues found on-site has to be fixed and addressed in the next release of the product. Having a solid product support groups provide constant input to all business units involved, helps develop better product.

Keep your customers engaged with a seamless experience that makes your product stick. This will make your customer comeback for repeat purchases.  To ensure a seamless experience, one needs to:

1. Educate customers on what the product does. How your product is different than competition? How your product does things in a new & Novel way?

2. Ensure product performance on customer site is as per the product's promise. There will be differences in your test/dev environment and the real customer environment. Customer support team will have work with customer to ensure that the performance, stability & reliability of the product is as per customer expectation ( customer expectation is set by marketing)

3. Ensure product security. This is more applicable to software products or software related product delivery. With changing security threats, one needs to constantly update the product to address all product security issues in a timely manner.

4. Collect feedback from customers and channel partners on how the product is performing in the market, also collect feedback on product inventory and sales velocity.

5. Product Support groups often form the front-line when it comes to communicating with customers. Communicating with customers helps making their experience better and more rewarding, thus adding to product value.

Conclusion

Building a world class product is not a one time activity. It is a continuous process with several interlinked stages and constant feedback between stages

The eventual success of the product depends on strengths of each individual functions AND the strength of the interlinks between these stages. Stronger the interlink the better the product. The strategy for developing world class products is not rocket science - but the execution of all aspects of product development is!

Can NetApp Survive the EMC-DELL Whiplash?

All data storage vendors are going through a tough times. EMC decided to sell itself to Dell and go private to help survive the coming storm. Ever since EMC-DELL deal was announced, investors and customers are looking at NetApp - wondering if NetApp will survive as an independent storage vendor.

Enterprise storage industry is in a state of transition that is driven by the confluence of multiple technological advancement including Flash, software-defined storage, Big-Data, Cloud, and converged/hyper-converged systems.

Given the tough business environment, NetApp is going through tough times. Q3 2015 revenue dropped by 11%. As revenues drop, free cash flow has also dropped for last three quarters in a row. Eventually, the bottom will fall off, and profits will disappear and blood bath of red ink will spread all over NetApp's balance sheet.

NetApp Insight Conference in October 2015 indicates to that NetApp is trying to reverse the sales decline - mainly by migrating customers to 'Data Fabric' and aims to reposition NetApp as a global data management company.

Data Fabric strategy is designed to allow customers to store, access, protect, share and archive data in consistent and predictable ways across multiple internal and external data centers - including public clouds.

The days of NetApp selling storage boxes will soon come to an end, and the new CEO George Kurian has a big task on his hand to transform NetApp into a Storage Software Vendor for Hybrid clouds.

This denotes a major shift in NetApp's strategy  - which is fraught with risks.  Along the way NetApp will continue to lose revenues, it will have to rejig its sales force who will have to work hard to convince its existing enterprise customers to move to data fabric.

When revenues drop so does share prices, and with that there will be large attrition and job cuts. With declining revenues and reduced staffing, the strategy will be tough to execute.

Challenges Facing NetApp

NetApp is facing several challenges - which can be summed up in one word "Google".

Not that Google is a direct competitor, but it personifies all the challenges NetApp faces:

1. Data moved to Cloud
2. Move towards commodity hardware
3. Open Stack & Open Source Software

Data moved to Cloud

Cloud is now main stream, and customers are moving lots of data to cloud. Recent advances in cloud archive storage, cloud access gateways and hybrid on-premises/cloud data management will accelerate the movement of data to the public cloud.

As enterprises move data to cloud, they will need less of storage boxes - which has a direct impact on NetApp's revenue.

Move towards commodity hardware

Big Cloud service provides have built their data centers on commodity hardware and have also developed deep engineering expertise to design and build complex storage systems for their data centers. As a result, none of the big cloud service providers (Google, AWS, Microsoft Azure ) are buying storage boxes from NetApp.

To rub salt on NetApp's wounds, Facebook and others are supporting Open Computing Project - which publishes design specifications and design documents for the custom-built servers, racks, and other equipment used in Facebook's data centers. Other cloud service vendors are fast to copy suit and order generic hardware ODM vendors in Taiwan and Asia.

Eliminating the requirement for proprietary hardware and embracing off-the-shelf platforms is leading the next revolution of data center technologies, and this is no place for NetApp.

Industry's move towards commodity hardware and Open Compute Project is rapidly eating into NetApp's revenue, and thus taking out steam out of its engine.

Open Stack & Open Source of Software

Open Source movement that started in universities has become main stream and is now impacting hardware. Starting from FreeBSD and Linux, Open Source software has grown to offer entire cloud stack solutions - called as "Open Stack". Open Stack software allows companies such as Google, Rackspace to build cloud scale data centers on commodity hardware.

Today, several companies including IBM & HP are supporting & distributing Open Stack - which is a complete set of software solution needed to run a data center. NetApp also taken a knee jerk reaction to integrated its arrays with Open Stack.

In addition to Open Stack, several other vendors are open sourcing their storage software. EMC recently announced open sourcing of its ViPR Controller - a Software defined Storage solution. Similarly Nutanix made its Acropolis App data fabric software free and open source.

The steady flow of open source software from established vendors makes it tougher for NetApp to sell high value data fabric software stack.

Open Source Software movement adds tremendous head winds to NetApp's sales and transition to "Data Fabric" strategy.

NetApp's Missteps

Internally, NetApp faces several challenges. Many of them comes from its strategy missteps and NetApp missed several good opportunities:

1. Missing Flash in Sales
2. NetApp misses the BigData boat
3. NetApp slips on SDDC & SDS solutions
4. Share buyback instead of technology acquisitions

Missing Flash in Sales

EMC was a latecomer to Flash party.  But in a short span of time, EMC's ExtremeIO became the market leader with more than 30% market share. Comparatively, NetApp's Flash Array lost out to ExtremeIO and Violin Memory, a startup.

Even now, NetApp does not seen to have a good product roadmap or product strategy to conquer Flash Array market.

NetApp misses the BigData boat

BigData needs Big Storage. Apache HDFS is designed to run on commodity hardware using the disk drives connected to servers. However, enterprises found that there is a need for a dedicated array for low cost data storage needed for Big Data Analysis. While EMC executed brilliantly with its Data Lake strategy - positioning EMC Isilion and EMC ECS arrays, and with Pivotal HD distribution. Today, EMC Isilion alone generates more than $2 Billion in sales from BigData sales. (Also see: Data lake - Solving the challenge of Big Data Integration)

NetApp slips on SDDC & SDS solutions

NetApp missed the Storage virtualization and Software Defined Storage market and waited too long to respond. As a result EMC & VMWare are able to take a lead with VSAN, ScaleIO and ViPR,  & ECS in large enterprise market, while several startups such as Chep, Nutanix, Nexanta have also leaped ahead.

In response, NetApp released FAS 8000 Flexarray Virtulization software - which was still tied to its hardware and did not get much success. Though, there is a lot of work in progress within NetApp on SDS - but I guess that NetApp has missed the boat.

Share buyback instead of technology acquisitions

One Big Strategy which worked for NetApp in the short run was Share buyback. NetApp constantly rewarded its investors with big share buybacks. $1 Billion in 2013, $1.2 Billion in 2014 & $2.5 Billion in 2015.

These big share buyback programs helped fend off pressure from Elliot Management, it also meant that NetApp did not have the money to buy other technology based firms. As a result, NetApp has fallen behind the technology curve in all aspects of storage technologies.

Since 1996, EMC has acquired over 50 companies, while in comparison NetApp has completed only 9 acquisitions.

Road Ahead

Transformation from a hardware vendor to a software vendor will be a work in progress for a long time. During which NetApp will have to rejig its top management. Departure of the company's CMO, Julie Parrish, is just the beginning.

Moving to Data Fabric Strategy entails selling more software to its existing (& shrinking) customer base. One hope for NetApp is that customers will move back to some on-premise solutions after experiencing 'sticker shock' from AWS and other public cloud services. According to Val Bercovici, NetApp's 'cloud czar' says this process is already under way.

Another hope for NetApp is that Dell-EMC deal will distract EMC for a long time and this will allow NetApp to create a space for itself. In addition, splitting of HP & Symantec-Veritas also helps in distracting competition.

But a multi-billion dollar business strategy cannot be based on HOPE!

My Take on NetApp

NetApp is one of the 'old guard' stand alone storage vendors left in the market. With an impending revenue collapse and severe market challenges, there is no way NetApp can survive on its own in this environment.

NetApp's product positioning of 'Data Fabric' as a bridge between private infrastructure and the public cloud has merit but it has huge market challenges. NetApp was never known as a software vendor and to succeed as a software vendor, it needs to merge with a strong software player - such as Microsoft or Veritas, who can take on a smaller and focused market.

I doubt Kurian and his management team can transform NetApp to become a storage software company while protecting its revenues. NetApp must strive to protect its margins - while it jettisons its hardware business.

A good option is to spin off its hardware business, while merging its data fabric software with another enterprise software vendor. In short, Dell's EMC acquisition rings a loud bell for NetApp, and like EMC, NetApp's days as an independent company is numbered.

Value of Social Media Analytics

This weekend, a newly hired marketing manager asked my opinion on social media analytics. His company is medium sized construction company and had recently ventured into housing business. As I spoke to him and advised on social media analytics strategy, I thought of documenting the gist of what I said in this blog.

Today, every company in fortune-500 list is using an array of social media analytics - from a host of data analytics services companies. Even smaller companies with revenues in less than $10M are now buying social media analytics.

Social media companies are also making it easier for companies to collect data through APIs & its free. Facebook insights, twitter analytics, Google analytics etc. are so easy to use - that even small start ups can benefit from it.

So this raises a question: Is the custom built sophisticated big data analytics any better than the free versions from Facebook, Twitter & other social media?

At the first level, paid analytics looks more sophisticated and definitely looks good. Vendors offer pretty reports and better interfaces. For a higher price, few companies offer better math that is used to quantify ambiguous metrics - such as depth of customer engagement or Potential reach of the product.

A common justification for paying for social media analytics is usually:

 "Customers are very important to us, so why not spend some percentage of marketing spend to know & understand what customers are saying."

"Hearing what customers are talking - will help us better position out advertisements. Even a 1% increase in customer response to an advertisement leads to 10-15% increase in sales." 
 
While there is no denying that there is value in social media analytics, businesses must spend considerable time to conduct rigorous data modeling ahead of time to ensure that the metrics provided by a third-party analytics program/services are meaningful to the business. Without an upfront data modeling - you will end up with a flood of data and reports - that does not tell anything new.

Data modeling starts with identifying the right data - Not just data. You need to filter out spambots, auto retweets and clickbots etc.. Next, you need to identify keywords or phrases that are relevant to your business. For example word "suck" is generally bad for retail, but a good word for vacuum cleaners. It takes time to identify which phrases are "positive," "neutral" or "negative".

Keyword based analytics can give huge value - but only when it is done right. Businesses need to spend time/effort to identify keywords & refine keywords on periodic basis.

Once data modeling is done, the next is to firm up on the strategy:

• How to deal with the information you are getting from social media feeds?
• How to manage customer complaints?
• How to increase traffic with social media?

In the world of social media, the time to respond to customer complaints and negative comments is really short. So businesses needs to have a response strategy in place - before starting off on social media analytics.

Closing Thoughts 

Unless businesses have done their homework in terms of data models, response strategy, It is best to use the free basic metrics provided by the social media platforms. Only when you have a strategy - then invest in social media analytics.

First steps in Developing New Software Products

Software Product development is much more challenging than software services. Product development needs much higher level of domain expertise, technological expertise and long term commitment to develop the product. In addition of technical competence it takes a very high level of marketing competence to succeed.

The initial team that is drafted to develop a new product will have to address various marketing and technical issues first - before starting the actual product development even starts (a.k.a. coding)

These steps are very important in new product development and must not be compromised upon.

Step-1: Product Definition & Product Positioning
Step-2: Product Features & Quality Imperatives
Step-3: Product Road map & Release Cadence
Step-4: Product Technology & Architecture
Step-5: Project Resource Plan
Step-6: Product Deployment Options
Step-7: Product Marketing Plan
Step-8: Financial Project Plan

Note that product development is a completely cross-functional effort. Software engineering, Technology, Marketing, Finance & HR management roles have to work together to build a successful product.

Step-1: Product Definition and Positioning 

The first step in software product development is the clear definition of the product:
What is the product?
What problems it will solve?
Who are the users?
What is competitive advantage?
What are the distinguishing features?

Answering these five questions will give a clear definition of the product itself - which is essential first step for new product development. Answering these questions requires deep domain knowledge and deep understanding the market needs. If product definition is not done properly, then the resulting product will be like a solution searching for a problem! (Which is bound to fail in market)

Step-2: Product Features & Quality Imperatives

Once a product is defined, the next step is to define the features and functions the product must provide. The product features and functions must be defined in terms of the intended users. For an enterprise product, this requires deep domain knowledge of (potential) customers and customer work flows. It is not uncommon to involve people from potential customer industries for this. For a consumer product, focus must be on good user experience while meeting the user needs.

In addition to user requirement features, there are other additional features that must be considered. Government regulatory requirements & Industry standards Requirements. For example HIPPA, SOX, PCI, DCI, ISI, ITAR, FCC, etc., are defined government and industry standards that the product must meet - else it will not be allowed to sell!

In an ideal world, one can develop a product which has all the required features and with best quality in time. However, real world imposes has its own limitations. Not all features can be developed in time nor can the product meet all the quality requirements. This implies a quality Vs Features tradeoffs.

As part of product features definition, the quality requirements must also be identified. One needs to answer: Is more like a Proof-of-concept? Or Is it an enterprise class product? Or is it a Consumer grade product? For each class of product - there are different quality imperative that must be addressed while defining the product features.

Step-3: Product Road map & Release Cadence

Once product features is defined, it will become clear that not all features can be developed in one release, especially in an complex enterprise product. Even in case of simple consumer product, the market conditions and user requirements will change with time - and the product needs to adapt to meet those changes.

Product with reasonable quality/stability and that can be developed in a reasonable time frame - form the first version of the product.

Other features & functions will have to be developed and released in a phased manner. This is called as a product roadmap. Product roadmap is an intended plan of how all the intended features will be developed and when it will be released.

Release cadence has to be defined in this plan - so that it give an indication as to when a particular feature will be released: is it coming in next 6 months or one year or 18 months etc. Having a planned releases helps in several ways: One, it helps in fixing bugs found at customer site, Two it helps in modifying features to better match user requirements, Third, it helps to add new features incrementally which that helps in project management and also helps to avoid scope creep on a single release.

Planning the product roadmap & release cadence helps in next steps.

Step-4: Product Technology & Architecture

In software product development, choosing the right product technology and platforms is very important and can make or break a product in market. In large organizations, a separate CTO - Chief Technology Office is often established, which determines the right technology choices. For example, when developing an enterprise application, choosing a right Database, choosing a right middleware, the OS platforms etc., - could make/break a product.

Software Technology also refers to development tools such as compilers, version control tools, testing tools, performance testing tools etc.

Software Technology also refers to choice of using opensource code or licensed utilities (JBOSS, Jinfonet etc.)

Product Architecture forms the foundation of the product. Depending on the intended market and time to market, proper architectural choices has to be made. Once the product architecture is finalized and product development starts, it becomes very expensive to change the product architecture. Product architecture has to be very carefully planned and designed.

When it comes to making choices of product technology and architecture, it is always good to look ahead and choose newer/scalable/flexible technology & architecture, so that, when needed,  changes or upgrades & addition of new features can be easily done on the product to suit market needs.

Product Technology and Architecture also determines the resources needed for new product development.

Step-5: Project Resource Plan  

Once the roadmap and features are identified, it is now easier to plan for the required resources needed to develop the product. In a software product development, the biggest resource are engineers & software development tools: Servers/computers & software tools.

Identifying the scale & timing of resources needed and by when helps in the next step: the Financial Project Plan.

Step-6: Product Deployment Options  

Software products often have several deployment options.  Typically, a consumer grade software product should work right out of the box. Customers should be able to install it themselves and start using it.

In the world of cloud & mobile apps, customer expect ease of deployment as a basic requirement. For such products, the product distribution platforms (App Stores, or Web Site or Retail distribution) has be decided.

In case of enterprise products - there is a whole lot of configuration & customization that needs to be done for each customer. In such a case, Product plan must also determine which of the features should be offered out-of-the-box and which features are to be customized at customer site. Ideally, all the common components should be out of the box and all customizable components must be done through config files - i.e., no compilation of custom code at customer site.

Identifying the product deployment options helps in Product marketing Plan

Step-7: Product Marketing Plan

Products have to be pushed to the customer or Customers can be induced to pull in the product from the distribution channels. The choice of Push or Pull determines the marketing strategy.

Some products can be sold via partnerships or by bundling with other products. For example, Microsoft can bundle Lync with its Office suite, SAP can bundle Hana with its R/3 Suite etc.  Google Maps gets bundled with Andriod etc.

In some cases, the product can be sold via partnerships. A partner company may choose to sell the software along with its suite of products. For example Cisco sells HP Opsware along with its suite of network management tools.

In case of pull strategy, customers have to be induced to buy the product. For customers to buy a product, they must first be made aware of the product - via advertisements or marketing communications, and if the customer likes what they hear about the product, they may opt to buy it. For example Apple Pages, or Whatsapp or WeChat, or Intuit or Turbotax etc. These products are heavily marketing via different channels and customers will buy from retail channels.

Selecting a right marketing plan has a big impact on determining the financial plan.

Step-8: Financial Project Plan

It takes money to develop new products. The total amount of money and the timing of expenses has to be carefully worked out and planned. In large companies, funding may not be a problem - provided the product business plan is complete & agreed upon by relevant stake holders. In case of small/medium size companies, finance will be a major constrain - which impacts every aspect of new product development plan.

Closing Thoughts

In this article, I have put financial project plan as a last step. In many cases,  financial plan becomes the first necessary step - which then determines the scale & scope of new product development projects.

For sake of simplicity and ease of understanding, I have presented Software product development plan as a 8 step waterfall process, which is an ideal situation. But in reality, all steps happen in parallel & in iterative process. Developing new software products is never such a clean & smooth process. It requires lots of deliberations and analysis - which will make these steps happen in parallel and also in iterative process - where each planning stage has to be revisited iteratively all through product development life cycle.   

What Marketing wants from IT

Today marketing technology products is fully digital. Product Marketing is a big user of big data analytics. The potential benefits of data analytics for marketing is immense. Marketing has been an early adopter of cloud SaaS services www.salesforce.com.

In this business environment, marketing needs more than just a plain vanilla tech services from IT departments.  To succeed, CMOs need more that the traditional application hosting, support, security services. CMOs need IT departments to be an active partner and help leverage technology to develop cutting edge marketing initiatives such as predictive analysis, creating custom offers etc.

This new jobs will be in addition to the current role of keeping the infrastructure running and the systems secure. As a product manager, I am involved in several product marketing initiatives and I interact with several CIOs. These interactions have given the insight into these new requirements.

1. Enable Big Data Analytics

The IT systems are collecting tones of data. But this data is locked up by IT in different silos. Marketing needs to access this data in real time to run data analytics. CMOs need IT to provide access to these multiple data sources in an integrated way - i.e, provide a quick, safe and secure access to the data lake to run their data analytics.

Managing, collecting and making use of internal and external data is one of their top five challenges, according to more than 500 marketing professionals who responded to IBM's 2013 Global Survey of Marketers.

2. Help to measure new KPIs

Social media, viral marketing, multi-channel customer engagements, and big data analytics are creating new key performance indicators, or KPIs. CMOs understand the value of these new KPIs but often struggle to measure it.  Marketing needs help in measuring parameters of time taken at the billing section, time taken for servicing a customer request etc. Getting these new KPIs helps marketing to optimize & improve all customer interactions and deliver a truly outstanding experience that matches the company's brand promise.

IT needs to understand the new KPIs and then help marketing by building IT systems to measure it. Thereby helping marketing to succeed.  This implies that IT must go beyond the back-office functions and become an active technology partner in marketing activities.

3. Help to remove shadow IT & manage technology expenses

Marketing works at a pace which is much faster than what their internal IT can support. So often times, marketing chiefs create a shadow IT - by outsourcing some IT function - such as creating & hosting specific websites, or subscribing to a SaaS or PaaS or IaaS services. While outsourcing & creating a shadow IT helps, it also costs more. So over a period of time, the cost of maintaining shadow IT becomes prohibitively expensive.

CMOs want their IT departments to eliminate this shadow IT by bringing back the external hosted sites/applications in-house and by consolidating all the outsourced IT services.

According to Gartner report, by 2017, CMOs will spend more on IT than will CIOs.  So CMOs want IT to bring its technology expertise, knowledge of existing infrastructure and newfound understanding of marketing's objectives/KPIs to bear in helping marketing make the best investment decisions.

CMOs want IT to guide/assist/help in selecting technology platforms and provide data on viable IT systems that meets the business needs.

4. Faster Turnaround time please... 

One reason why CMOs use shadow IT is due to the fact that their own internal IT department cannot service them in a timely manner. Today marketing campaigns are planned and executed in days. For examples a road show is planned, and a web site has to be created for the event in 3 days. The CMO approaches IT with this request, but IT needs 4-6 weeks to test and host the web site! Such a long turnaround time is unacceptable for CMO and they end up outsourcing to a third party or signing up for a cloud service.

5. Enable a faster pace of  Business

Smart Phones & Tablets have changed the pace of marketing. Customers now have access to Internet from anywhere anytime. Added to this mix is the mobile social media: Twitter & Facebook. This implies that customers are interacting with the company in new ways - which require faster response from marketing departments.

Marketing now has to handle all customer interactions -- outbound, inbound and those happening on social media in real time - and for that they need new technologies that allows them to interact with customers at any time in any of those media.

But the IT departments are still hesitant to support the new mobile platforms and insist on doing things the old way for security. For example, IT does not allow employees to carry corporate data in mobile fileshare app such as Dropbox.  In many organizations, IT is yet to embrace Virtual Desktops on Tablets.

This slows down the pace of business & CMOs want their IT departments to change from being a brake on business wheels to a booster rocket.

6. Create an Office of Chief Marketing Technology 

The fast changing landscape of technology - with mobile, cloud, Big data and IoT, it has become a necessity for marketing departments to have a specialized technology office - which looks at new and emerging technology and determines how/when/where to use these new technologies. Traditionally, new technology evaluation and validation was done by IT departments - but now CMOs are creating an Office of Chief Marketing Technology.

Chief marketing technologist is responsible for understanding both available and emerging marketing technology platforms and articulating how marketing can capitalize on them. They play a strategic roles and some cases tactical roles in terms of getting involved in procurement, or setting up marketing technology centers of excellence etc.

In many organizations, marketing departments lack the technical skills needed to create the Office of Chief Marketing Technology and they need help of their IT department to set it up.  In some of the large fortune-500 companies, the Office of Chief Marketing Technology also works with IT to run & maintain new technology platforms.

7. Let marketing run its own software systems 

To reach out and communicate with customers in real time, Marketing departments have stated to run their own software. New technologies such as big data analytics, Internet-of-things, Mobile apps etc. has created several new requirements - where Marketing wants to have hands-on control on the software systems, while IT runs all the backend infrastructure.

In this new paradigm of mobile & Cloud Apps, Marketing want to own and control customer experience by running the software - where marketing team can quickly alter design, develop a new user experience or create a new technology-driven marketing initiative, without doing lots of coding or fixing bugs.

CMOs want IT to empower marketing in how they interact and deliver personal experiences to customers. In this way, IT builds the backend infrastructure and creates an engagement layer - which interacts with marketing department to empower technology users.

For example, IT creates & maintains a big data platform - which marketing department runs to get real-time insights.

Closing Thoughts

Big data, social media and mobile technologies are shaking up the old world order. CMOs are eager to bridge the big gap between traditional marketing and IT to take full advantage of new technology driven opportunities for better customer engagement and higher ROI.

Some of the leading organizations have created shadow IT or mini-IT within marketing departments, but then they are now realizing its limitations and challenges.

The right solution is for IT to take a proactive steps and work with marketing departments to bridge the technology capability gaps and lead the transformation of how marketing teams engage customers.

Also see:

1. Understanding Big Data
   
2. Defining the Business Objectives for Big Data Projects
   
3. Understanding Data in Big Data
   
4. Next Technology Disruptor: Internet of Things

Product Management: Leading with Customer Experience

Recently, I was browsing www.flipkart.com and www.indianroots.in and had picked up few items in the online shopping cart, only to abandon it, i.e., I did not complete the buying process - because of slow site response and incomplete product information.

In e-commerce world, its a common problem. An abandoned cart is an online "shopping cart" where a shopper has begun the process to purchase items by adding one or more item to their cart but then leaves the site without completing the purchase.

According to an IBM survey, every year roughly US $83 Billion of sales is lost due to poor customer experience. That's more than the total revenue of all retail e-commerce.

Solving this problem is of paramount importance to any e-retailer. So to begin with, product management must have a seat at the business strategy table and "own" the total customer experience and must work towards improving total customer experience.

In this context, product managers have to work on building better customer experience and improve the customer experience, increase customer engagement to stem such losses from abandoned cart.

Note: In this article, I have taken e-commerce as an example. However the concepts explained here is equally applicable to enterprise software products.

A fresh look at the customer experience– and why it matters

To start with, product management should "own" the customer experience and understand customers. Understanding customer in e-retail implies investing in technology and data analytics and build consumer behavior models and then use this insight to deliver differentiating customer experiences - i.e., tailor the product to match customer needs.

Technology is just an enabler and must not be mistaken for the solution or for strategy. Technology is used to understand the customer and tailor the entire marketing channel and web interactions.

Let me explain this in detail in the next section. Essentially, Technology is used everywhere, but the overall solution depends on strategy - which can be grouped into three distinct steps:

Step-1: Understand Customer Context
Step-2: Act Pro-Actively on the insights
Step-3: Take a broader view of Customer Experiences

Understand Customer Context

Understanding Customers in e-commerce world is a lot more than understanding customer demographics: Age, Sex, Income Group, Geographic Location, User history, user platform (PC, tablet, mobile), Time of browsing/purchase. It also involves knowing which marketing channels the customer has been exposed to or used in the past - i.e, knowing did the customer use the information in a email or social network or on-line advertisement, or search engine.

Knowing all this information that makes up the customer context in real time leads to the next step. Note that the key word here is "real time".

However understanding customer context in real-time is a major challenge. Capturing and understanding the full context of each and every customer interaction across all channels is a gargantuan task - and this calls for high investments in technology.

In the world of e-retail, every single interaction as an opportunity to understand customer context. To do this successfully, e-retailer must be hypersensitive to not only behavior, history and preferences, but also the real-time circumstances customers are facing.

To explain this in simpler terms, think of a old physical retail shop. The customer is greeted by a sales associate who scans the customer demeanor and quickly gauges customer's interests. He can gain additional insight by asking probing questions such as "Why do you need it? Or Where do you plan to use it? And other questions. In e-commerce world, we need to use technology to gain such insight and then tailor the buying experience.

Product management can tackle this issue by automating all processes across channels to calibrate the web responses based on the behavior and context of each individual engagement, which is described in the next section.

Act Proactively on the Insights

Once the customer context is understood, the next step is to act proactively on it. In e-commerce world, this could mean:

1. Adjusting the web site in real-time to match the context and creating right-time, right-place offers.
2. Tracking customer interest and communicating that through different channels in real time and also off-line.
3. Providing a high quality of online customer engagement during the moment customer is on your website.
4. Identifying & rectifying customer struggles (such as slow responses etc.) in real time.
5. Automatically creating customer communication portfolios for the future

All these actions are based on insights gained. This could be due to real time analytics that can serve as  valuable guideposts for creating high quality customer engagement.

Monitoring, tracking and understanding the quantitative value of customer experiences also provides critical insight that can directly influence marketing actions.

Leading e-retailers devote invest heavily to understanding what's going on and then use the resulting knowledge to drive action. They measure results, identify what's working and what isn't, and follow up to verify that their efforts are making a difference.

Real-time action is very important and must be coordinated across all channels of customer interactions: Online, Mobile devices, social media etc., to create an integrated and consistent customer experience.

When real-time understanding of customer context is achieved and used to coordinate activities, it becomes possible to create highly sought-after right-time, right-place offers.

Monitoring, tracking and understanding the quantitative value of customer experiences also provides critical insight that can directly influence the company's actions – and help to ensure that the correct choices are consistently made.

To win customers' mindshare, trust and loyalty, it's essential to coordinate activities and messages across all channels at all times and keep them aligned to the customer context. This  is a highly dynamic and challenging undertaking. But for the customer, it is a seamless experience that sends the message that the company truly knows and understands them.

Take a broader view of Customer Experiences

Each customer experience is an event in itself. Each event taken individually does not constitute an overall customer experience or customer relationship.

Taking a broader view implies in-depth understanding  of the full scope and nature of the engagement with customers and using analytics to guide the future actions and build customer relationships that grow and strengthen over time.

Customer experience is influenced by every customer touch point, even the call center, website, email, mobile app and shipping.  Customer experience can be improved by addressing any difficulty tied to that experience. Note that every single customer touch point creates a customer experience, from the website, Mobile app, Facebook business page, Email marketing campaign etc. All the details from each of the customer touch points create an overall customer experience.

All leading e-commerce companies maintain all transactional history which is then used in future. Taking a broader view of customer experience helps in enhancing the lifetime value of the customer. Leading e-commerce companies integrate all inbound actions with outbound communications across multiple channels. For example, if customer had abandoned a cart, a follow up email is sent requesting customer to complete the transaction, while the online advertisement points to the product that was in that abandoned cart.

Product Management, having taken up ownership of customer experience and sets up broad strategic goals such as:

1. Complete channel integration.
All channel activities should be mapped and prioritized to foster integration for creating a unified customer communications and touch points.

2. Building an insight-driven organization.
Technology must be used to create a holistic view of the customer relationship and this insight be understood by the entire organization and act on relevant insights.

3. Build an enterprise wide focus on customer experience.
It is essential to understand in depth how customers engage with your website to identify opportunities to serve them better. This implies placing the customer at the center of the business.

While these are long term goals and has a direct impact on the financial front. But these goals also have important challenges. Integration issues will continue to exist as the number of channels and the channels characteristics change with new technology. Even today, leading e-retaileres struggle integrating mobile and social channels with other campaigns and tactics.

Product Management should also have a clear vision of the end goals for each quarter/year. As these goals are tough to achieve, it needs to be broken down into smaller end goals for each quarter. From a product planning perspective, building superior customer experience is a journey with several milestones. Product management lays out the plan for the enterprise and the shows the way forward.

Putting Customer Experiences First

Enhancing customer experience should be part of the overall strategy. Product management defines this strategy and gets a buy-in from all stake holders. Once the strategy is agreed upon, product management has to break down customer experience into measurable metrics, identifies steps to achieve those goals and then give directions to each departments/groups to reach those goals.

In the initial stage, the goal could be to create technologies to measure those metrics.
The broad strategy can be like:
1. How can the company orchestrate the engagement of its customers across all its channels?
2. How to understand the context and motivations of each customer engagement?
3. How to differentiate and create highly personalized customer engagement?
4. How to create new and unique communications?

Leading e-retailers across the world are investing to find the answers to these questions and then set about creating superior multi-channel experiences by making full use of every tool available to them.

E-retailers should go beyond each transaction and follow up with a definite action plan to create a very positive user experience. For example:
1. Contacting customers to get their feedback on their experience.
2. Monitoring/Tracking delivery commitments to ensure customer fulfillment
3. Identifying cross-sell and up-sell opportunities.
4. Designing other customized offers for future use

Consider how Amazon has taken ownership of the entire customer experience by using technology, business analytics,  insights and engagement in a carefully orchestrated way. When customers log into Amazon website, they encounter a seamless blend of live web information and interaction, relevant web-store displays that is both customized to them and made more convenient by presenting it in multiple platforms.

The entire process flows smoothly across channels. For example if a customer has clicked on a web advertisement and he is instantly taken to the relevant product page. The page also shows all other products that are relevant to the customer.

This sends a powerful message that Amazon has invested in building a better customer relationship by making it easier to interact and conduct transactions. This cross-channel integration displays broad understanding of the customer, knowledge of customer context and ability to take systematic action, all brought to life through a single customer interaction.

Microsoft Azure Re-Branding : Is Microsoft Moving beyond Windows?

In my last article, I had written than 2014 will the year, Windows will lose the OS crown and Google's Android will be the new emperor.

Today, I got to know that Microsoft has started acknowledging this change and is re-branding its Windows Azure Cloud Service as Microsoft Azure.

The re-branding exercise is a BIG message. Satya Nadella, the new CEO of Microsoft is sending a message to the whole world that Microsoft is moving beyond Windows and he will transform the company in new ways.

Azure Cloud Services

For a long time, Microsoft's Windows Azure Cloud services was the second largest cloud offering and today Azure is a cloud power to reckon with. During this time, cloud services has grown and matured and is now ready for prime time. In face of this change, Azure must adopt and embrace an Open & Extensible cloud infrastructure. Else customers will move to other service providers such as RackSpace, Vmware's vCHS, or Verizon's Terremark, etc.

As a product manager at EMC's ASD division which makes solutions for building private/public cloud services,   I have always preached the need for an open and extensible system and to me, it looks like Microsoft is finally embracing a Open and Extensible cloud services, and re-branding exercise is a very public acknowledgment.

Microsoft Azure - An Open Cloud

For a long time, Azure, ever since its creation supported only Windows OS to be run on the virtual machines, and also restricted it to Microsoft tools - MS-SQL, .Net, etc.

But now things have changed and once run Oracle databases & middle ware, Java, PHP, Phyton etc. Today, customers can even run Linux as a guest OS on the virtual machines.

As Microsoft embraces Open architecture, I am sure, Microsoft will allow customers to use VMware ESX hypervisor and Linux or Android or Windows as guest OS. Microsoft will open up Azure to a host of other non-Microsoft technologies as well.

Microsoft Azure - An Extensible Cloud

Azure was always a public cloud, run on Microsoft premises and managed by Microsoft. Now with the launch of Vmware's vCHS - which is a hybrid cloud, Microsoft will have follow suit and allow hybrid cloud services as well - where customers can choose to use Azure in their private cloud or public cloud or a mix of both. This implies that Azure platform will have to be made open and extensible to interact with customer's private cloud.

I would predict that Microsoft will soon release a new set of cloud development tools to help customers extend Azure cloud services to their in-house private clouds and also enable customers to move data & compute workloads in & out of Azure's public cloud.

Closing Thoughts

As Windows loses its relevance in the personal computing space. Microsoft is extending its Office suite to iPad. Microsoft is expected to launch Office of iPad this Thursday March 27 2014.

All this re-positioning indicates that Satya Nadella is determined to change Microsoft and move the company beyond the Windows world!

Also see: 

Move Over Windows, Android is the New Emperor

What makes Customer Buy Your Products?

Answer to this question is quite tricky. First we need to define who is the customer, next we need to classify the product and then depending on customer segment - we can identify reasons why customer will buy your product.

Who is the customer?

We can broadly classify customers into two categories:

1. Individual Consumers: i.e, people like you and me.
2. Corporate Customers: Organizations, Companies, & Governments.

Products can be classified into three main categories

1. Utility Products: Eg: Trucks, insurance,
2. Image or Prestige Products: Eg: Cars
3. Comfort Products: Eg: Car Seat

Products can also be classified based on pricing/value.

1. High Value/Priced products
2. Low priced products

Buying Behavior

Customer show different buying behaviors when dealing with different products. The concept of perceived value as the basis of buying works mostly on Utility Products and for corporate customers - where the prices/costs are high & there are checks/balances on purchases.

Also see: http://indianproductmanager.com/what-makes-customer-buy-your-products/

Impulsive buying is another factor - which is mostly seen in low value/cost utility products or even in high priced/value products.

Impulsive buying is seen even in organization - where a single individual makes the buying decision based on his instinct. For example, buying office furniture.

Impulsive or Instinct buying decisions are difficult to model - but can be easily exploited. 

Has Apple lost its "Cool"?

Few weeks ago, a parent asked my opinion on which tablet to buy for his son - Apple's iPad4 or Samsung Note. As an Apple user, I recommended iPad and also mentioned the advantages of 'parental control' features in iPad. But the young boy's heart was set on Samsung and I couldn't change his opinion. So a week later, his parents bought him a Samsung Note 10.1" tablet for his birthday.

I was there at his birthday party taking my daughter along for the party - watching him and his young friends play with the new tablet. I just stood there watching and hearing them drool over the new toy. The conversations among the young kids was an eye opener.

One kid made it very clear: "iPad is for parents and is boring, Samsung is cool." It was that statement which made me think of Apple in a new way and what I learnt after this incident was truly enlightening.

I tested out the same observation in my weekend class. I teach Computer Architecture to Master's Students at Manipal University. In a class of 37 students, all of them had an Android phones, 32 of them had Samsung, 18 of them had Galaxy S3. Not a single user had an iPhone or a Blackberry.

In India, carriers do not subsidize handsets, so users will have to pay the full price for the phones.  So price premium could be one of the reasons why users are migrating to Samsung, but the real reason is that Apple has lost its "cool" factor. Young users see iPhone and Apple as products for older people. Even at office, I observed the same behavior, only people over 40 are using iPhone - while all the young engineers are using Samsung or Sony or LG.

The change in consumer perception implies that the day's of Apple's dominance is coming to an end.

The Change is Real

For more than five years, Apple has maintained the same marketing strategy. The iPhone design has also remained the same, worse still - Apple makes iPhones in two colors only! Its almost like Henry Ford's statement: "People can buy a Ford Car in any color as long as it is black", In case of Apple one can buy an iPhone in any color as long as it is black or white. Customer can choose between iPhone 4S or iPhone5.

While the strategy of offering limited options was good five years ago, but not now. People want more options and Apple just does not offer that. In other words, Apple as a brand is not appealing to young users in India (and elsewhere in the world)

Eons ago, iPod was "cool". So when iPhone was introduced, consumers flocked to buy the next "cool" gadget. Apple had positioned itself at the white hot center. (see: Apple's Market Positioning) With passage of time, and death of Steve Jobs, people at Apple have maintained the same marketing plan and product designs. Consumer goods are highly perishable. With passage of time, Apple's marketing has become stake and Apple has lost touch with consumers and is getting bumped out of the white hot center and Samsung is claiming that center position.

Today, the consumers perceive Apple differently. It is no longer "cool" to have an Apple product. I tested this out with a group of college students and new hires - who recently joined work. I asked people to associate the following words with brand names.

Brand Names: Nokia, Blackberry, Apple, Samsung

Words: Cool, Old, Expensive, Cheap, Manager, Young, Hip, Stone, Boring.

The results of this exercise was not surprising. Blackberry was tightly associated with words Manager & Boring,  Nokia was associated with Cheap and Old.

Very few people associated Apple with Cool. The most common association for Apple was expensive, followed by Old and only 3 participants called Apple as Cool.

Samsung got the honors of being strongly associated with Cool, Hip, & Cheap.

This simple exercise was an eye opener for me. Though the results could have varied with a different sets of demographic groups. But then I selected the group which could afford iPhones or similarly priced smart phones. I would point out that not a single user in the group had a Nokia Lumia or Blackberry phone. There was only two users who had an iPhone - while the rest had Android phones from various manufacturers. (Samsung, LG, Sony, Micromax, Spice)

Implications

Implications of these observations are enormous. Apple could be on a verge of collapse in sales - but not a very drastic drop in sales as there are no other alternatives (other than Samsung/Android).
Apple's current user market is getting saturated, so the growth in incremental sales will fall to single digits (not counting the handset replacement market)

Younger generation do not see the value proposition in Apple iPhone or iPad. Consumers are not getting the value for their money, considering that they have to pay a premium price for an Apple product.

Apple's product management and product marketing has gone stale. Its innovation engine has stalled. Customers are no longer as excited or happy with Apple products as before. Apple's pricing and product changes - such has the smaller lightning adapter, which forced whole lot of older customers to send ridiculous amount of money for simple accessories, has started to alienate its customers in India and elsewhere in Asia.

All this implies that Apple will no longer be the king of Gadget world. Apple may maintain its dominance in the US market for some more time, but in India and elsewhere in Asia, Apple is at a point of losing its customers for good - and that is bad news for Apple's investors and shareholders.

Closing Thoughts

No company can maintain an above the industry average returns for long, no company can maintain its industry dominance for long. Apple's long reign at the top is now coming to an end - unless Apple can surprise and wow the world with breathtaking innovations.

In India, which is a very price sensitive market, Apple is losing and losing fast. Loss of mind share and brand value will have long term implications for Apple. Fortunately, for Apple, there are not many alternatives in the market - which gives Apple some breather to get its product strategy together and retain its dominance.

Also see:

1. Apple's Market Positioning
2. Why Are People Angry at Apple?
3. Apple is Losing its Innovation Edge
4. Apple loses its way with Maps
5. Apple in India: a lost opportunity?

Challenges of Big Data

Today, all most all marketing magazines, journals, seminars, blogs etc are talking about the benefits of big data. While Big Data promises the gold for a marketer - in terms of having real time customer insights and the ability to influence customer's decision, it is not easy. There are major challenges in implementing really good technology platform needed for Big data analytics.

Getting the vital customer insights is more like gold mining - you need to process 3-4 tons of ore and dirt to extract 5 grams of gold. Big Data analytics will also have to run through tones of data first - except that with advancing technology, it is possible to get that insights fast and cheaper than ever before. Companies must work out the major challenges of Big data first - before they can make use of the customer insights.

Challenge-1: Get the right data source

Today, in most organizations, data is distributed in multiple databases. It is common to see 50-60 different databases. In larger companies, it is common to see data scattered across 100+ databases. So identifying the right data sources for the big data anlytics is the first big challenge. Given the dynamic nature of business today - especially in high-tech world, with mergers and acquisitions, the number of data sources just keeps increasing.

Integrating multiple sources of data is still a big technical challenge and is yet to be solved by IT.

Challenge-2: Choose the right technology.

Another challenge is to select the right technology platform. Today there are several big data technologies in the market: Hadoop, Mongo, MIKE 2.0, NoSQL etc. These new technologies offer an opportunity to analyze very large amounts of unstructured data at a scale and speed that was simply not possible just a few years ago - but selecting the right technology platform is based on the type of analytics you need - which depends on the data sources (see challenge-1)

Challenge-3: Get the right storage IT infrastructure

Big Data analytics needs big data storage and networks to move the big data around. Since the data exists in multiple databases, consolidating data will require a much bigger storage capability and a faster network to move the big volumes of data around the corporate network. In many cases, the current IT infrastructure is inadequate to meet the demands of big data. Data storage & network bandwidth management is still a big challenge for most companies and this has to be resolved before companies can benefit from big data analytics.

Challenge-4: Have an action plan

Big data analytics is useful only if one can act on the analytics. Since most of the real time analytics need real time action, there must be a plan on what to do with the analytics. Today, Big Data is more like a technology hype than a complete business solution with a clear path to business value. So before companies can start on their big data project,  they have to separate the hype from reality and have a clear cut plan on what analytics to run and what to do with it.
Today, most companies don't even act on the customer feedback that is readily available. Marketers don't look at basic Web analytics to act on the insights that have been at their fingertips for years. In such case, should the company be willing to act on the insights you could generate from a Big Data initiative! And for that there must have a plan.

Challenge-5: Avoid the data trap!

Data analytics is not everything. Customers have emotional reactions too and in many cases, customers do not really know what they really need. Henry Ford once said "If I had asked people what they wanted, they would have said faster horses." Customer insights and marketing plans must not rely solely on analytics!

Closing Thoughts

Big Data analytics is a key resource for any marketer and can be a competitive advantage. There are several success stories of businesses using big data to improve the business. However, most companies will hit road blocks on the journey to this land of gold. Today, Big Data is more a piece of the technology than a complete solution with a clear path to business value. Only big technology companies have been able to exploit the benefits of Big Data.

Customer behavior is complex and customers are emotional. So no matter how robust the analytics  is, it can provide only a part of the picture. It takes human intuition - tuned by big data analytics to really make a difference and create a success story.

PRODUCT REVIEW – ANDROID 4.0 MINI PC

Google released Android 4.0 Mini PC few months back, and I got to see it now. From the first look to the first test drive, I am very much impressed with this innovation. The Mini PC looks like a USB dongle, but it's a PC!

Hats off to the engineers at Google for thinking up this new form factor.

This small handy device comes with a 1GHz CPU (overclocked to 1.5 GHz), 512MB RAM, 4GB Flash memory, extendable via MicroSD slot. Android 4.0 & can run all the Android Apps.

The Mini PC does not ship with a screen, no key board or a mouse, but you can connect it to the Mini PC and start using it as a PC! Mini PC has USB ports to connect a mouse & key board, and HDMI output to connect to a TV screen, and it also has a MicroSD slot to add more memory. It sports WiFi connectivity for Internet.

Android OS was initially not designed to replace a traditional PC and Mini PC cannot replace a PC in true sense, but then this little wonder can kill the low end PC desktops at internet browsing centers and this tiny $38 device can do all the things my mother does on her PC! 

The innovative form factor make this tiny device a giant killer. I can dream of 100s of new applications for this tiny PC – which a traditional PC cannot. For example, I can take this MiniPC on a road trip & convert the hotel TV into a PC for the night, check my emails, watch You Tube or review the pictures/video I had taken earlier in the day on my camera. 

I can use this Mini PC to stream the video content from a surveillance camera, I can convert any Television into a Remote Desktop and work on Adobe or MS office Applications. I can convert any TV into a browsing station & the list goes on!

Adding to the value of this Tiny powerhouse is the Android platform – the wide plethora of Apps, and new Apps that can be developed for this device – which can make this tiny device  even more useful.

This tiny low cost PC has the potential to kill the traditional home computers in most of the market segments and could truly emerge as the tiny David that killed the mighty Wintel Goliath!!

Where to buy?

1. Amazon  for $38!