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Morettini on Management

Morettini on Management
Phil Morettini provides commentary on the High Tech industry, as well as tutorial articles for C-level managers in Software & Technology companies

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Structuring Channel Discounts for Software and Technology Companies
2008-09-09 00:44:00
Selling through sales and distribution channels of various types is very important to many software and tech companies. Yet channel programs, and specifically discount structures, are often thrown together quickly and haphazardly, without looking at any real hard data. Let's examine some of the key items it's advisable to consider, when structuring a channel discount program:Market NormsThe absolute first place to start when considering channel discounts is to survey the SPECIFIC market that you are entering. By this I mean look at similar products through the EXACT profile of channel partners you are considering selling through. For example for consumer software, retail margins of 15-18% are common, whereas for a specific VAR segments the discount norms may be in the 25-40% range. If your discounts fall too far below the market norm, your program will likely fail. If discounts are set much higher than the market norm (without good reason), your company will be leaving considerabl...
More About: Software , Companies , Technology , Discounts , Channel

Competing with Entrenched Software & Technology Industry Giants
2008-08-16 01:56:00
I was reading an article in the business section of our local newspaper recently about a new Search Engine name CUIL (pronounced Cool). I already knew about CUIL, because I had noticed that it had recently indexed the PJM Consulting website. One of their claimed differentiating factors is that they've their search index is twice as large as Google's is. In addition, they believe that they have improved the ranking algorithms, and they also present the results in a different way. The results offer fewer results per page, but more comprehensive information on each site, and often include a photo or other graphic. The premise of the article was that it may have a chance to be a real competitor vs. Google, or at least Yahoo and Microsoft, for market share in the huge search business. The founders have impressive pedigrees and come from Google on the technical side.The article gives credence to the possibility of CUIL being a potentially serious competitor to Google, Yahoo and MS, whil...
More About: Software , Technology , Industry , Giants

Integrating the Marketing and Engineering Functions at Technology Companies
2008-07-09 01:09:00
In most tech companies, Product Marketing and Product Development/Engineering are managed separately. There is usually a VP over the Product Development function and another over the overall marketing function, which usually includes future product marketing/planning.While this is certainly an appropriate way to organize a tech company, there is a great danger in one are when it comes to these separate operating "silos": the planning of new products.I have a particularly strong opinion on this topic, with an extensive product marketing background and also having worked as a product developer earlier in my career (albeit in a non-tech business).With respect to current products, the silo approach isn't much of an issue. The day-to-day activities of the marketing and engineering departments are very different, and can be managed separately quite successfully.It's in the future product area that things can get messy. Product Marketing and Product Development both have a key role to pl...
More About: Companies , Technology , Functions

Integrating the Marketing and Engineering Functions at Technology Companies
2008-07-08 23:09:00
In most tech companies, Product Marketing and Product Development/Engineering are managed separately. There is usually a VP over the Product Development function and another over the overall marketing function, which usually includes future product marketing/planning.While this is certainly an appropriate way to organize a tech company, there is a great danger in one are when it comes to these separate operating "silos": the planning of new products.I have a particularly strong opinion on this topic, with an extensive product marketing background and also having worked as a product developer earlier in my career (albeit in a non-tech business).With respect to current products, the silo approach isn't much of an issue. The day-to-day activities of the marketing and engineering departments are very different, and can be managed separately quite successfully.It's in the future product area that things can get messy. Product Marketing and Product Development both have a key role to pl...
More About: Companies , Technology , Functions

Trade Shows for Software & Technology Firms - Do They Still Make Sense?
2008-06-06 01:15:00
Let's talk about what, for some people, is a marketing method from a bygone era: Trade shows, or Trade Fairs, as they're referred to in most places outside of the US.At one point in time, Trade Shows were a staple in most every tech company's marketing budget--shows like Comdex, PC Expo, Network World and a host of others were annual rites of passage. But in this Internet age, they have been greatly reduced in the marketing mix, if not taken completely out of the picture.There are many reasons for this. First and foremost, the ROI of tradeshows was always very questionable for most exhibitors. In marketing departments everywhere there were sharp discussions during budget time, on whether to continue the expense of the major shows. They always seemed important to be at, but usually it was pretty difficult to make a direct correlation to enough actual revenue, to justify the large expense. As the Internet became more prominent, this ROI looked even worse in comparison--as it did fo...
More About: Software , Technology , Sense , Make

The End of Customer Service
2008-05-07 01:11:00
No one answers the telephone anymore.At least, technology companies in the US surely don't. With big companies, you are either presented with an endless phone tree--"press 1 for a company directory"--or the newest innovation in communications technology: the cheerful "automated voice attendant". In many cases these attendants, and several other "innovative" service options, can lead to a great deal of frustration for customers and prospects.As a consumer and business buyer I've found this frustrating, not to mention an incredible productivity sink. As a High Tech industry executive and consultant with a strong marketing background, I find this practice curious at best--and insane at worst!Think about it--how many BILLIONS of dollars companies spend trying to get the attention of potential new customers--most of who are going to need to contact the company at some point. Yet it seems that once we've got their interest, or God forbid, they've signed up as an actual customer--we ar...
More About: Customer Service , Service , Customer

Retail Distribution of Software Products
2008-04-12 00:48:00
Selling software at retail at one point in time was the "Holy Grail" for consumer, home office and small office software suppliers. That's where the volume was. Everything that a company did starting up was intended to build enough volume to get into a distributor, so they could then pursue shelf space at the major retailers of software.But oh, how times have changed. The advent of the Internet and wide availability of broadband has made nearly every consumer and small business application downloadable with the click of a mouse, and a major credit card. In the meantime, major sellers of software have dropped like flies (CompUSA, Computer City) or have de-emphasized software in their retail assortment.PROFITABLE retail distribution of software, which has been a major challenge for software companies dating back more than 20 years, has gotten tougher every year, as the retail distribution pipe shrinks. And even twenty years ago, it was already very tough, for small software companies...
More About: Software , Products , Distribution , Retail

High Tech Market Research for New Products
2008-03-11 04:24:00
One of the biggest problems in High Tech businesses is the "technology-driven" approach that tends to predominate, especially among startups. Much of this occurs due to the fact the many founders of software and technology companies tend to come from an engineering, programming or other technical background. While a strength in creating a flow of technical innovation, this can be a real problem when companies are planning new products which they hope to find a real market for.Everyone has a tendency to focus on what they know best; that's just human nature. Folks spend more time on the issues that they enjoy, are more comfortable with, and are more confident about their ability to make good decisions on. Things that don't fit into this category tend to be put off, or given short shrift.The result is often products are well thought out from a technical viewpoint--but much less well so from a "meeting market needs" perspective. While both are important, the market perspective is abs...
More About: Products , Research , Market

Which Online Advertising Platforms Should You Include in Your Marketing Mix
2008-02-12 17:59:00
I often write about online marketing, as many of my regular readers know. A frequent topic of mine is Pay-Per-Click (PPC) advertising, also known as Cost-Per-Click (CPC). Occasionally, people will refer to this marketing vehicle as Search Engine Advertising . What you're hearing this called more and more is "Google Adwords".HAS GOOGLE ADWORDS "BECOME" ONLINE ADVERTISING?Of course, its kind of like asking for a "Coke" when you want a soft drink, or "Scotch Tape" when you are seeking sticky-backed tape. It's the age old story of a brand DEFINING the category itself, and usually happens when a product becomes dominant in a market segment.The conventional wisdom these days is that Google has basically won the Online Search Engine-based advertising wars, so don't even bother with any of the other advertising platforms out there. This topic is the very reason for Microsoft's recent offer to buy Yahoo for a gazillion dollars; they are motivated to do this because Google is so far ahead ...
More About: Marketing , Online Advertising

Strategies for a Technology Market Slowdown
2008-01-15 02:01:00
Is the world economy slowing down? What are the implications for technology companies?Recently, technology stocks (along with the stock market in general) have tanked. There is a credit crunch that shows no signs of abating, and inflation is rearing its ugly head, with the continual climb in the prices of oil and other natural resources--commodities which touch every aspect of the world economy. Is the economy headed for a severe downturn--taking technology businesses down the drain with it?I hardly think so, but we have had a very long running economic expansion, that eventually will reverse by the universal law of "what goes up, must come down". Economies are cyclical by nature, so a downturn has to happen eventually. And tech stocks are usually affected more severely than average in an economic downturn, which affects technology industry investment and ultimately tech growth rates.So what should you do if you're the CEO of a software or hardware tech business?Be Prudent, But Don...
More About: Technology , Market , Strategies

Negotiating and Working with Large Technology OEM Partners
2007-12-15 00:11:00
The Holy Grail for many software and technology companies, especially the early stage type, is the big deal. Everyone is looking for the big deal, the one that will fund the company's early activities, provide market credibility and momentum in the marketplace. Of course, if it goes well, there can be nothing better. Many times the big deal takes the form of an OEM partnership with a much larger company. But often when these deals do happen, they end up fitting in the category of "be careful what you wish for".TARGET YOUR OEM PARTNERS CAREFULLYThis is where it all starts, good or bad. It's important to pick compatible partners. Companies looking for large OEM partners are often blinded by the potential of what the OEM can do FOR their business. They often fail to pay any attention at all to what the OEM might do TO their business!Can the partner cause severe channel conflict? Will they tie the small company up in endless meetings, procedures and negotiations? Do they have a corpor...
More About: Technology , Partners , Working , Large

Channel Pricing Strategy for Software and Hardware Products
2007-11-24 02:32:00
Pricing software products is always a difficult exercise. With high product development costs, but near zero costs of goods sold, there are many different strategies that people have followed successfully (and not so successfully!) over time. Pricing hardware products is a bit simpler because there is generally a significant cost of goods sold that acts as a governor on pricing behavior. But even with hardware, technology markets are dynamic and fast moving. And it's a complex enough topic when all sales are going direct--once you bring channels into the picture, it only gets worse.CHANNEL CONFLICTThe biggest concern most companies have when pricing for multiple channels is channel conflict. I have seen many companies who actually AVOID selling through channels for fear of the pricing implications it brings. They are afraid of a channel undercutting their direct sales force in price, and channel conflict in general, which arises as a result of different prices being presented to cu...
More About: Hardware , Software , Products , Strategy , Channel

Forecasting New Technology Products
2007-10-18 02:14:00
Forecasting is a thankless job. It's a lot like being a referee or umpire in your favorite sport; the only time a game official is noticed is when they do something wrong! Similarly, a forecaster's primary aim is too stay out of the "news".Make no mistake; forecasting is a very important function in any business. In the software business, your whole business plan could be riding on meeting the forecast to fund growth and product development. In a hardware business, it's even worse--you have to worry about creating too much or too little inventory--either of which can be a huge problem for your business.HARD IN THE BEST OF CIRCUMSTANCESIt's bad enough when you are trying to forecast an existing, mature product, in a mature industry. This is a difficult and complex task, using well known techniques such as smoothing, trending and seasonality to fine tune the next month or annual forecast.Early in my career, at Hewlett Packard, I spend 4 months in a special assignment dedicated sol...
More About: Technology , Products , Forecasting

More SEO Tools
2007-09-29 01:58:00
From time to time, I let you know about some of the more useful (out of the abundant crop available on the Internet!) online tools for Search Engine Optimization (SEO) that I have come across. So here's the latest batch of valuable, and free, widgets that I've found:The first is a site that checks on all of your back links, with a twist: it actually details not only the back link itself, but the anchor text associated with the link. For those of you sophisticated about SEO for your website, you'll know that this is very important information. There are a couple of reasons why this is important. First of all, the search engines use anchor text to associate your site with keywords that might be searched on in that engine, and uses this information in it's search rankings. So it's very important to have your most important keywords show up as anchor text on as many back links as you can manage. Secondly, if the search engines find that the anchor text on your back links is too rep...
More About: Tools

System Integration vs. Product Development
2007-09-22 02:07:00
I've recently engaged on assignments with two new clients. Both of them have businesses selling to large, blue chip customers. Customers of the size that are used to "having it their way"; as a result, getting a deal with them often includes the need for a lot of customization.The interesting thing about these two clients is how they perceive and approach that need to customize.A Tale of Two CompaniesCompany A views customization somewhat as a pain and distraction, something to be controlled--I am assisting them with creating a standard solution offering menu outlining the "Base" offering, with a list of options available at an added cost. They really want to discourage certain customizations, absolutely won't do some things that will be asked, and want to make sure that they charge dearly for items that they find painful. They have the classic mentality of a product company; they want to do the amount of customization necessary to make a large sale to this important customer--but...
More About: System , Integration , Development , Product , Stem

The Future of Wireless Communications
2007-09-04 22:29:00
Land Lines are going away, right? Everyone says so. We hire young women, generally in their twenties, to help take care of my son. I can't remember the last time one of their phones had an Area Code associated with the place they are currently living.That's because they don't use landlines--many people in their twenties and thirties move around a lot, and rely strictly on a cell phone as their sole or primary telephone. If they have a couple of roommates, occasionally they will also have a landline. But the number usually isn't given out, and doesn't appear to be used much.So does this mean that we are rapidly heading toward the wireless society that pundits have been predicting for a number of years? Or is wireless growth slowing and about to settle into mature market mode, with modest incremental growth in the future? There are a number of factors on both sides of this discussion--let's explore a few.Factors Pointing Towards Acceleration Of Wireless MobilitySociety is becomin...
More About: Future , The Future , Communications

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