Tuesday, June 13, 2006
Venture Capitalists: Please teach your portfolio companies how to sell to enterprises
Why does every single security software vendor nowadays mention as part of their pitch Sarbanes Oxley compliance? Don't you think us customers have heard this one before? It is way to cliche and should be dropped. Instead focus on your real value proposition.
It is amazing how much your sales folks don't really know about the marketplace. I usually send them away with homework when I ask them to email me the URL to their CTO's blog. Likewise, I also ask when was the last time they have briefed industry analyst firms such as Burton Group, Redmonk, Seybold, ZapThink and so on. I expect that they would have briefed Gartner and other larger analyst firms as this is mandatory. The specialist analyst firms tend to go deeper on some topics and hence the reason for us wanting to understand.
Maybe you shouldn't be so surprised if we ask you not only what open source software is embedded in your offering as the folks from SCO nowadays make us inquire, but we also would like to know what open source projects you directly contribute to.
Engaging a community is a predictor to the success of your offering and allows us to gain visibility into how well you support your customers which is something we don't normally see in our Hello World ceremonial POCs we do inside our enterprise.
Software vendors, you really need to think deeper about software licensing models. In this particular instance, several vendors were targeting tools that provide scanning of source code and would be used by the development community. Just because software is used by developers doesn't mean that licensing has to be per developer-seat. If you haven't been paying attention to the marketplace, enterprises have become disacustomed to paying for software at the developer seat level. Remember, five years ago when we all used to pay for IDEs in order to do J2EE development? Do you think we are still paying today?
Maybe if you thought about your problem space more deeply you would realize that the appliance form factor is appealing to us. Consider how many people within an enteprrise have to get involved to install a product vs simply getting a preconfigured box that all a network engineer needs to do is assign it an IP address? Your development environments can have useful plugin's that communicate with your appliance so I only have to install a stub into my IDE that I don't have to otherwise syncronize or even inventory when licensing time rolls around.
Consider for a moment, if I had to spend money, say $100K for a solution where one requires me to keep track of all the places it is installed, and I have to coordinate installation with the desktop folks, the network folks, the DBA team, the server team, etc vs simply accounting based on the capacity of the appliance, which one do you think I would choose?
Have to ping Cote of Redmonk to see if he has ever thought about steering vendors away from licensing stupidity. He has the perfect background to fix this problem forever. Anyway, Venture Capitalists are getting it twisted. Maybe they should start noodling getting some enterprise architects on their advisory boards instead of their usual players. Insular thinking isn't so healthy. Maybe they could hire Stowe Boyd or James Governor to provide useful advice on how to sell to enterprises...