Over the last few weeks, Steve Duplessie’s blog has been discussing some key elements that determine the relative success or failure of start-ups. It’s his public way of forcing himself to [effectively] write a book, and it’s an excellent–and continuing–series that makes good reading for anyone in this business. One of his points covered the great importance of marketing for early-stage companies (especially during their funding rounds); all too often, sales and revenue are emphasized at the expense of marketing and brand. Now, for the sake of this discussion, we’ll assume a company has a decent product that fulfills a market need, and smart people that can execute. The point was one of emphasis. Get the branding and marketing right and–all else being equal–the necessary funding rounds will flow; small revenue variances likely will not impact the start-up’s valuation as much as its perceived potential.
In reading Steve’s comments, it made me reconsider a few recent communications I’ve had that serve to remind us all that the importance of brand and marketing does not diminish as organizations grow. In fact, brand can be one of the most significant ongoing determining factors that affects the degree of success an organization or product achieves. Let me give a couple of examples:
- When I asked a friend of mine who’d become part of HP via the LeftHand acquisition what some of his big “ahas” had been, one of the main ones was this: “I hadn’t realized how much gets sold simply because it has the HP logo on it.” This is no comment–pro or con–on any HP offering, merely an acknowledgment of the trust that buyers have in certain brands.
- Chatting a week or two ago with Beth Pariseau at TechTarget about the challenges of smaller organizations breaking into the ‘big leagues’ (a conversation covered in her blog), I made a comparison between Pillar Data and Hyundai. Not surprisingly (or is it?), Pillar asked for some clarification. The essence of my point was that the difference between products (especially in this case between being perceived as ‘mid-range’ and ‘enterprise’) is less and less about feature and function in an overall sense. Indeed, the Hyundai reference should be taken positively–if there’s one manufacturer that is scaring the living daylights out of both Detroit and Tokyo, it’s Hyundai. Read a range of reviews of their vehicles; much of it is extremely positive. But while Hyundai is doing very well–certainly as a “mid-range” player–it has not yet cracked that “enterprise” bracket. It’s probably not about feature, function, and capabilities–I’m sure that the reason is focused on cachet and trust: that’s why–even somewhat apologetically in this context–I have two German cars sitting in my garage! Are they better than the Hyundai equivalents? Maybe not, indeed maybe even the reverse is true if you take value and TCO into the equation. But they represent a safe and known bet. Comfort drives inertia (if you’ll excuse the pun!). So far, life hasn’t pushed or pulled me from that comfort zone (for which I’m grateful of course in many ways) but it is that very need to consider options–a double edged sword if ever there was one–that is helping Hyundai grow, and which can help Pillar (and others) do the same. After all, Pillar offers a well-featured, scalable, and flexible unified ‘application-aware’ storage system. Isn’t that what the world wants? Sure, but the world also often prefers the devil it knows. And that’s where marketing strength and brand development play a major role for challengers as well as incumbents. Even when motivated to jump, most buyers want to feel secure in the jumping!
- Looking at some other innovative storage players, it is clear that a brand can drive market success. 3PAR and Compellent have both achieved significant success, and–no surprise–both realize the value of, and invest in, their marketing and brand. They are both ‘a part of the storage conversation’ and are amongst the biggest alternatives (both in approach and revenues) to the ‘big boys’ out there in the storage landscape. But then also take a look at the market success of XIV–would it really have made the strides it’s making without being swathed in the IBM brand? Despite the positioning issues IBM has with its various storage offerings, XIV has become in a short time a large ‘”challenging storage architecture” (if you see what I mean, even though it is now owned by one of the acronym vendors). All the companies mentioned here have distinct and often compelling value propositions, but brand power can be a major predictor of revenue size.
We all know that “just” having a great product isn’t a guarantee of success in the storage market; just as important is the route to market, distribution, channel, sales, call it what you will.. .and most people “get” that. But it’s not enough, either; it is necessary but not sufficient. Marketing and brand should not be overlooked. The odds are tough for challengers, yes, but that’s why the rewards are so good for those that make it. And, much as the obstacles are significant, things do change–big brands can decline, new brands can rise. For instance, DEC was huge and EMC was just an upstart when I got going in this industry. We might not want to admit it in our numbers-driven, comparison-chasing, analysis-loving world; but a big chunk of the decision making process is still about feelings rather than features. And that’s about branding, not just brochures.
Read more of Mark’s blog entries at The Business of Storage.
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