The battle to grab customers in a down market

I attended the HP Analyst Meeting in Boston a few weeks ago and had several discussions with the business intelligence (BI) group. It is clear to me that HP is struggling to try to figure out the best way to sell in this type of down market. Obviously, this isn’t easy for anyone.  HP’s approach to solving this problem for its BI, data warehousing, and analytics solutions was to create a BI solutions group consisting of consulting (based on the 2006 Knightsbridge acquisition) and technology (Neoview, an integrated hardware and software platform for enterprise data warehousing).  One of the best articulations of the approach HP has adopted came from a discussion by a sales executive who is on the front lines of trying to convince customers to part with cash. What struck me was the coordinated effort that was necessary to sell to a large global organization with huge data management challenges.  This got me thinking about what it takes to sell in a very tough market.

To be successful, this sales person went all out. The Neoview product team and BI consultants all pulled to together to provide the right solution for the customer. Over the course of about ten weeks they conducted at least 100 interviews with the company to build strategy, roadmaps, and ROI estimates. The  team worked with the customer to create a master plan that showed how HP could help the company with its goal of transforming its business.

The HP sales team leveraged many different resources to make sure they had an excellent understanding of the customer’s needs and that the company understood how HP could help. HP made sure to get executive sponsors in key leadership positions at the customer organization. They also brought in some of HP’s top thought leaders and made sure that happy customers were available to discuss their experiences. In addition, HP leveraged its partner network (including Ab Initio, SAS, and SAP Business Objects) to provide a complete solution.

Neoview was a good fit for the customer’s data management challenges. Problems with inconsistent customer information and disconnected IT systems were so hard to manage that it was becoming impossible for IT to adequately support the business. This customer’s top priorities were to regain control of its existing analytics data store and revamp enterprise customer intelligence and enterprise risk management. They liked the way Neoview was built. It is based on HP’s NonStop engineering expertise that has been used for over 30 years in industries such as financial services (stock exchanges) and telecommunication (switching) where the management of vast amounts of data is essential. Neoview is designed to support hundreds of terabytes of data and over one thousand processors. The customer also had some concerns about issues like getting its team up to speed on the product. HP stepped up to meet their concern by offering training and help with Neoview’s operation to ensure a smooth transition..

As I stepped back from this discussion, it occurred to me that successful technology sales in this type of complex market is incredibly challenging. It is simply not enough to make an announcement and hope for the best. On the one hand,  the ingredients for a successful sale  sound pretty simple – you need to understand the customer’s pain and provide the right solution at the right price. Easy? Try telling that to a team that just implemented a full-scale, coordinated sales push, made all the right moves, and beat out formidable competitors to win the sale. It’s not so easy, particularly with a complicated IT solution in a market where  the business demands fast and cost effective results.And, if it takes such a coordinated effort to win one sale, how realistic is it to expect to sustain these efforts over the long term?

There are three main requirements for selling IT products and solutions in today’s market:

Get the basics right.You need to provide good technology at the right price. Your marketing plan needs to be based on clear and concise messages and your sales team needs to be able to articulate  those messages in a way  that is just right for your customer. This sounds like a good plan in any market. The difference today is that you can’t count on some of the sales that might previously have been considered “low-hanging fruit”. For example, assume you are preparing a proof-of-concept for a prospective customer and several of this company’s developers know you and your product from their work at other companies. Although it is helpful to have strong supporters of your product on the prospect’s IT team, their support can not overcome a product or solution that doesn’t solve real business problems. Today, the business is demanding more from IT – more business value, more trusted data, more control over costs, and more control over project time lines.

Understand your customer’s needs. You need to understand your customer’s challenges and expectations in order to make sure your product/solution is a good fit One of the most common mistakes that software product marketing teams make when preparing marketing materials is to focus on the outstanding and differentiating features of their product from a product-centric instead of a customer-centric point of view. You need to understand what problem you are solving for your customer and how your solution will solve this problem faster-cheaper-or with more flexibility for future changes than your competitors products. An understand of customer needs should happen at two levels. First, it helps to look at customers in a vertical market so your solution and  marketing strategy account for industry specific complexities and challenges. Second, you need to understand the requirements of the prospect at hand -within the context of its industry as well as unique situations such as a recent acquisition or internal changes that may impact their sales decision.

Develop a coordinated and well organized approach. The difference between a good sales effort and a great one is in the way internal teams and business partners collaborate to put knowledge about customer needs and product/solution capabilities together to find the right fit for the customer. For many software vendors, the services or consulting team (internal team or external partnership) has a large role to play to help close the deal. For example, regulatory requirements in industries such as  health care and financial services industries are continuing to change making significant demands on IT environments for companies in these industries. Although, you may have a great solution for handling vast amounts of data and improving data security and governance, you may not have the opportunity to prove it to your prospect without a coordinated sales effort. By bringing your product and sales teams together with a consulting team with deep experience in the regulatory and data requirements for health care and financial services you will be better equipped to show the business value of your solution.

As you try to finalize your deal, it often comes down to very similar issues across different types of customers.  They are all looking for quick, inexpensive fixes to hard problems! The reality is that there are no easy solutions to closing deals in this economy. Understanding what the customer needs is hard, but  what is even harder is making all of this scalable.

How Less Becomes More in HP’s Transformation of its Data Centers

“Green” in the office or in the home often starts with the addition of recycling bins or changing to more energy efficient light bulbs. For example, an office I know well recently announced a cost cutting measure that would also be environmentally friendly. Signs were posted in all office kitchens indicating that the office was going “green” by eliminating the supply of plastic cups and that everyone should bring in their own mug.

I thought of this symbolic office initiative and how small it is while I was at HP’s Analyst meeting in Boston last week and listened to Randy Mott, HP CIO, describe HP’s very grand “green” data center transformation. The enormity of this transformation really got my attention. A typical enterprise data center consumes about as much energy as a small city. A lot of the energy that enters the data center is actually lost in the cooling process before it can be used to keep the servers and other technology running. HP has placed a high priority on research and innovation around blades, power, and cooling technology so that data centers can use energy more efficiently.

About three years ago, Mark Hurd, HP’s CEO, looked at HP’s 85 globally distributed data centers as energy consuming beasts that needed to be tamed. He challenged Randy Mott and the HP team to make the company’s information infrastructure more flexible and responsive to the business while dramatically reducing the energy consumption of its data centers. And he challenged his team to complete this transformation over an eighteen month period.

HP has made tremendous progress with this transformation effort and plans to be fully operational with its six new data centers in three months time. The new data centers were built in pairs across three U.S. cities (Austin, Atlanta,and Houston). This type of transition from old to new data centers can be painful. You do not want to close down a data center until every last application has been closed out and accounted for. HP has already moved out of 32 major data centers through out the world and closed 150 server rooms.

I am adding a link to Robin Bloor’s blog on this topic. He adds some other really good insights that you’ll find interesting.

What lessons did Mark Hurd have to tell us about HP’s data center transformation? Here is what I took away as best practices:

· Everyone in the company has to play a role in making transformation happen

· Don’t do this in a half-hearted way –- you will have to retire old legacy applications

· The next generation data center need to focus on automating, monitoring and controlling –It is focused on the economics of power in the data center

· You need to think about this in terms of an architected infrastructure – not a single targeted project

It is pretty typically for large global organizations to have data centers distributed throughout the world. These large organizations have all seen an explosion in the amount of data needed to be managed, stored, and shared.

Some of these data centers run the risk of not having enough power to keep running in the near future. While the challenges and expense of taking on such a massive data center transformation in such a short time can not be underestimated, HP’s approach can serve as a guide for other companies facing similar issues.