WL Study Conducted for Brocade: New Infrastructure Services and New Service Provider Revenue

We recently conducted a study among 192 medium and large enterprises in the US for Brocade Communications. The goal of the study was to obtain information that would help service providers better understand the opportunity that new cloud service can bring. In addition to IT challenges, priorities, and buying behaviors, we specifically wanted to know more about packaging and pricing for IPV6 translation services, server load balancing as a service, SAN extension services, and virtual desktop services.

Click this link to read about the results.


Cloud Computing Penetration into Enterprise IT Gaining Momentum

WaveLength/Winn Report Says Early Cloud Users and Planners Estimate 30% of IT will be Cloud-based by 2015

Today we release our new study, Five Key Themes in Enterprise Cloud Computing Migration. It discusses the changing Cloud market from a broad perspective and provides probably the first segmentation of what we call the Early Cloud Era.  It introduces the three segments, Pioneers, Planners, and Stragglers and looks at the market through this lens.  Specifically, it examines penetration of different service deployment models, drivers that encourage adoption, and concerns that limit it.  It also looks at enterprise projects before, during, and after Cloud deployment, as well as the role of the different vendors and channel partners in those enterprise IT Cloud computing deployments.

It’s worth saying again that this study reports from a broad perspective.  However, it is by no means exhaustive.  There is always more to say and the right recommendations to make, themselves highly dependent on the audience, the tech segment or the technology or telecom segment.  In other words, the same piece of data can mean something different to a security hardware company.   To that end, if our vast data set may answer a specific question anyone might have, we are happy to take a look.  Just let us know.

Five Key Themes in Enterprise Cloud Computing Migration is a joint effort.  WaveLength conducted the analysis and created the report.  We would like to thank our partner, Winn Technology Group, who did a fantastic job with data collection.  We are also thankful for the contributions from our friends and colleagues at Channel Navigators, LLC and Telecom Strategy Partners LLC.  We’d also like to thank graphics partner Beyond5280, who makes our work artistically shine.

Download the entire report here:


More than Half of US Large & Medium-sized Enterprises are, or Plan to Be, in the Cloud

According to our recent research, most medium and large enterprises are going to the Cloud.  About 33% of the sample is a current user and additional 8% are piloting it.  This group, known as Cloud Pioneers, is not composed of a group of just SaaS users, either.  To be considered a Cloud user, an enterprise had to be testing or using a Cloud model other than SaaS.  This included any kind of private or public cloud, be it Infrastructure-as-a-Service (IaaS) or Platform-as-a-Service (PaaS).  Furthermore, they also had to actually have people working on it.  Another 16.8% are planning for Cloud.  This group is aptly called the Cloud Planners.  The remaining 42.1% are the Cloud Stragglers, those organizations with no current Cloud plans.

Source: WaveLength Market Analytics/Winn, Five Key Themes, May 2011


Meet the Cloud Pioneers… and a Note about Security Limiting Cloud Adoption

Meet the Pioneers, the group of enterprises leading the way with Cloud adoption. They are distinguished from their colleagues, Cloud Planners and Cloud Stragglers in many ways.  In this post, we’ll keep it to security.  As the figure below show, when Cloud Pioneers prepare for Cloud deployment, tops on the list is upgrading security and implementing encryption.

Source: WaveLength Market Analytics/Winn, Five Key Themes on Enterprise Cloud Computing

For this reason, Pioneers are less concerned with security, as opposed to Stragglers, where security truly limits their adoption.  As you can see from the table below (click it for a larger view) that combines all the concerns we asked about, it is easily apparent.  The highest ranking for a security concern, which is “Reduced control/visibility for security” is 8th for Pioneers, tying with “Technology not yet proven.”  This is because Pioneer’s upgrade security prior to their Cloud deployment.  Because of these projects, for Pioneers, all security concerns rank in the bottom half of the list.   For Stragglers, it’s a different story.  Of their concerns, all security concerns we asked about rank in the top half.  After costs, lack of trusted third parties to help them, and the perception that it’s an unproven technology, security concerns are the real barrier for this group.  It all suggests the opportunity for security vendors to develop the market by easing  the fears of the mainstream market.



Source: WaveLength/Winn Five Key Themes in Enterprise Cloud Computing




Now Available: Research Summary on Enterprise IT Buying in the Era Cloud Era

Wavelength Market Analytics recently partnered with Winn Technology Group to conduct a cloud computing research study.  While many recent studies size the market, we wanted to help our vendor clients better understand to whom they need to sell.  In our study, we sought to understand the differences between organizations that are currently adopting or planning some type of cloud computing solution from those that are not.

Study characteristics:

▫         IT decision-makers to include IT VPs and directors

▫         Sample size = 126 surveys collected summer 2010

▫         Large and medium-sized enterprises

▫         Three distinct buyer groups to include Pioneers who are using or testing a cloud solution, Planners who are actively planning for a cloud solution and Stragglers who have no cloud plans at this time.

▫         Complete results in a full-length presentation and report to be available March 2011.

We found that 41% are Pioneering with their Cloud apps, and another 17% are actively planning for a cloud solution.  A total of 58% are doing something in the cloud, meaning that the majority of participating enterprises have some kind of cloud project.

To find out more, a short summary, Generating Demand: A Summary on Enterprise IT Buying in the Early Cloud Era, is available on SlideShare. You can download it at  The full report will be available the second week of March.

You may also want to participate in our latest Webinar Leveraging Data for Demand Generation Success -Wednesday, February 16, 2011 1:00 PM and find out how you can substantially increase lead rates through data analytics best practices in demand generation campaigns.

Click on this link to REGISTER


Distributor CEOs Agree: Emerging Technology Sweet Spot for VARs

More VARs Should Sell Mobility, Virtualization
When the Global Technology Distribution Council gathered in May, the CEOs of the major distributors spoke out on what they believe their VARs should sell. The perspective of each one is as follows:

  • Tim Dolan, Chairman, Westcon Group: Video
  • Bob Dutkowsky, CEO, Tech Data: Mobility
  • Roy Vallee, CEO, Avnet: Unified computing or converged infrastructure
  • Kevin Murai, CEO, Synnex: Virtualization and server consolidation
  • Kia Hong Lim, CEO, SiS Technology Group: Mobility and Data Storage
  • Fabian von Kuenheim, President & CEO, Magirus: Storage Virtualization and Storage de-duplication
  • Meinie Oldersma, CEO, 20:20 Mobile: Mobility

The overarching theme – sell emerging technologies. Why? That’s where a VAR can add the most value and extract the highest profit. Enterprises don’t need VARs for commodity products – they can, and do, buy those products from DMRs, eCommerce or retail. They need VARs when technologies are complex and when those technologies need to integrate into existing network infrastructure without disrupting users.

Vendors – Make Your Technologies Easier for VARs to Sell!
Now, the trick for vendors is to make it easier for their VARs to sell emerging technologies. Easier said than done. Most vendors treat emerging technologies the same as a commodity technology. These vendors forget that VARs have to be taught how to sell the new technology. Not the speeds and feeds but instead the VAR needs to know:

  • How to recognize and qualify an opportunities
  • How to present technology benefits to the end user
  • Why the end user should buy
  • How to overcome objections
  • How to win against competition
  • How to identify purchase timeframe, budget and decision cycle
  • How to upsell to higher value solutions
  • How to cross sell to add higher profit to the sale
  • How the technology applies to various vertical markets such as education, healthcare/HIPAA, public section, etc.

Build the Right Go-To-Market Tool Set for Partners
VARs need all the same go-to-market tools as your direct sales force. Look to leverage these materials for quick time to market.

  • Selling skills training (prospect identification, overcoming objections, competition, etc.)
  • Technical skills training (pre-sales, installation, troubleshooting and post sales
  • Demand generation tools (lead generation and nurturing, co-brand collateral, MDF, etc.)
  • Product oriented tools (ROI calculator, product configuration tools, demo program, trade-in program, etc.)

Selling emerging technologies is a winning strategy for both VAR and Vendor.  It just takes work on both sides to make it successful.


The changing role of marketing in a consumer-driven world

By Sarah Sorensen
It should have come as no surprise when Twitter, one of the most popular sites on the Internet, introduced advertising to try to start to monetize their traffic. So why did it make news? I believe it’s because their advertising model epitomizes the seismic shift currently taking place in marketing. In today’s hyper-connected world, the advertiser has less influence and control; it’s all about the consumer.

Through Promoted Tweets, advertisers will be able to target any of the millions of Twitter users that conduct a search relevant to their products and services (e.g. if a user’s looking for coffee, a Starbucks‘ Promoted Tweet will show up in the results; similar to the Google model). However, it’s not just about getting the message of the promoter out; these Tweets need to be useful to the visitor, and if they are not, they will stop being shown.

This is the Marketing 2.0 model; in all communications, companies need to engage and address the needs and interests of the consumer or risk losing credibility and quickly becoming irrelevant. Marketing is less about generating one-to-many discussions, in the form of advertisements or press releases, and more about creating an ongoing dialogue with customers. This is because success hinges on being able to develop a productive relationship with the consumer that allows companies to stay on top of customer preferences and concerns to understand how best deliver on evolving requirements.

It’s not about talking TO but WITH the consumer.

No longer can you carefully craft your message, buy ad space or radio or TV time, and assume your message will be heard by a quantifiable audience. Today, the audience is fragmented, and they want to hear from you on their own terms. You need to figure out where your customers are spending their time. Perhaps they are on Facebook, where users post more than 55 million updates a day and share more than 3.5 billion pieces of content weekly, or maybe they’re on their phone sending one of the 2.5 billion text messages that are sent, according to Blackberry, every day in the U.S.?

Then, you need to determine how they want to hear from you on a regular basis. It could be they want to come to you. This was the case for more than 93,000 people who submitted questions to a new “Open for Questions” section on within just forty-eight hours of launching. Or it could be they would like the convenience of your information embedded in their regular activities, as in the aforementioned Promoted Tweets.

Regardless of the communications channels you choose to pursue, the key is to not just talk, but listen. If people have problems, acknowledge and learn from them. That’s what Frank Eliason, a customer service representative for Comcast, did. He saw that many Comcast customers were on Twitter posting their frustrations, so he decided to reach out to them with a simple question “How can I help you?” He then responded to each and every Tweet he received and tried to resolve their issue. He now has close to 42,000 people who follow him and has become one of the go-to resources for Comcast customers looking for help.

It’s not a CAMPAIGN but a CONTINUUM.

The Eliason example highlights another important point; marketing shouldn’t be about the latest buzzword or trend, but rather about how you live the brand promise in each and everything you do. It’s about creating an ongoing relationship with the consumer, and every communication and touch point with the consumer is an opportunity to further develop that relationship. Ever get frustrated when you call customer service, punch in some information and then get asked for that exact same information when someone comes on the call? Or maybe you are one of the more than twenty percent of people who stopped their online purchase because of a lack of company information. These are marketing issues and opportunities.

Look at everything you do, all the intersections you have with consumers and determine how you can enhance the experience and provide additional value to the customer. Financial institutions have found the loyal customer is the one they can help with their overall finances. It’s about creating a relationship with the customer that supports them in all their financial planning and decisions, regardless of whether there is an immediate transaction or profit to be made; customers who use an institution’s tools to track their spending habits, pay their bills, create a budget, and manage their debt are much less likely to switch banks and will ultimately do a lot more business with them long term.

This is critical, since consumers are going to be turning to a lot of different voices to get their information on you in this digital age. An ecommerce survey by Squidoo found that more than 70 percent of customers looked at online reviews before buying. Intuit revealed that out of every ten sales, eight are due to word of mouth. The lesson is to ensure that you are consistently delivering value to everyone because you never know who or where that critical influence will be.

United Airlines learned the hard way how, in this digital information age, the impact of each and every consumer can be amplified. When Dave Carroll’s Taylor guitar was damaged during a flight and United refused to reimburse him ($1200) to get it fixed, he wrote and sang a catchy song about the incident that he posted on YouTube. Within eight months, more than 8 million people had seen the humorous video, with “pass the buck” and “don’t ask me” phrases attributed to their customer service, along with the refrain “should have flown with someone else or gone by car because United breaks guitars.” What do you think 300 media interviews, a Top 10 viral video, and a Harvard Business Review Case Study cost their brand? I would venture it’s more than $1200.

There’s no such thing as CONTROL.

One critical mistake that many companies make is that they are obsessed with trying to control each and every interaction, which means they can’t develop a real relationship with the customer. Employees following strict guidelines and policies, such as the one United probably had around luggage, have no room to consider the context of the interaction, or create solutions that are unique to the specific requirements of the customer, which means their ability to deliver value is significantly diminished.

The reality is that gone are the days when formal statements and copy that’s reviewed by legal can be the voice of a company. Customers are dubious of “spin,” they are suspicious of anything that looks contrived or too “corporate;” they want transparent and genuine. Going back to Eliason, when he reaches out to customers, it is not formal or rehearsed. He is not working off a script. You can tell he truly cares and that makes people want to listen to him and work with him, even when he can’t actually solve their problem.

Customers want to know you are aware of issues and actively working to solve them. Just as in all relationships, there’s the good and the bad. Companies that are open and honest about their problems have earned the trust of their customers and they are rewarded with their pocketbooks. Just look at Nike or Wal-Mart; they have both been able to successfully recover from issues within their operations (supply chain and human resource-related, respectively), in large part because of their willingness to openly address them with the consumer.

But it’s important to understand this relinquishment of a perfect façade and control may manifest in surprising ways. For example, some hospitals are letting their patients read the notes their doctors write about them during exams – of course, there’s the worry that patients might react badly to a statement that points out they are “slightly obese” or “appears stressed,” however, it’s a step towards a more transparent relationship. The initial reaction has been positive; patients say it takes some of the fear out of the process (you no longer have to worry about what the doctor knows that you don’t), often confirms what the patient already knew, and ensures they have all the information they need to make better decisions about their health.

Businesses that can look across their extended operations and open themselves up to communications that are real and not always comfortable can build trust with customers. Those companies that can relinquish control and instill confidence in their employees to represent them well will be able to engage consumers in authentic, ongoing dialogues that will build the relationships that pivotal for the success of companies in this consumer driven world.


Are Your Partners Getting Their Money’s Worth from Your Certification?

Channelinsider recently showed that the value of IT Certification, in terms individual pay premiums. For all but one category, it had turned positive in the last 3 months versus last year as compared to average base salary. Another way to look at this is that Partners are now able charge more for the services their technically trained people provide.

  • When you prepare your certification programs, do you consider the certification costs from the Partner’s perspective? You may want to make sure you’ve asked the following questions…
  • Do you evaluate everything the Partner must invest in certification before they will realize any revenue?
  • Have you looked at how long it takes a Partner from the time they become certified until they begin consistently producing revenue as a result of this certification?
  • Do you know how your Partners compare before and after training?
  • Do your Partners believe that their investment in certification was worthwhile? Did they see any ROI?
  • When will the Partner breakeven on their investment in your certification? Is this reasonable?

Here’s where analytics can help. Relying on sound data and quantitative analysis removes guesswork. For example you might want to do the following actions.

  1. Compare revenue and 2-tier POS in your Oracle, SAP or other ERP data base with information from your training and certification records in your learning management system.
  2. Marry that information to your Partner data base.
  3. Estimate the cost for each component of certification (course(s), equipment, testing, etc.).
  4. Identify average gross margin that your Partners will realize for each certification for your breakeven analysis.

Now you’re ready to start crunching numbers. Sound like a daunting task? It can be. Most of the information you’ll be gathering comes from different data bases. It’s in different formats that will have to be adjusted before you can even begin your analysis.

An alternative might be to work with an outside team of professionals such as WaveLength Market Analytics. Know Your Channel from WaveLength takes your partner, product, customer, company, and market data together with any necessary 3rd party sources to build your customized Partner Intelligence Scorecard. We work with you to identify Key Performance Indicators that your want to measure. If the data allows, we compare channels and partners, groups of partner-types, geographic locations, certification levels, experience levels, and any other types of analyses to assist decision-making, program evaluation and management.


For the IT Technology Market Vendor Go to Market Plans, the 4th C=Cloud!

By Ken Rutsky

This ones bursting out like a rainstorm (pun intended) exciting stuff…

Eucalyptus, according to GigaMon, appears to be on the verge of raising a round with a post valuation of $100M on best I can tell revenues in the $0M range! (Granted, a big name CEO joined, but still, 100M valuation??) When I saw this, it really got me thinking of 1) are we entering a cloud bubble and 2) why, even if we are, how the cloud is changing the business that I and my clients are in. I’ll leave topic 1 for another day, but let’s take a look at #2.

4Ps and 3Cs – A Cloudy View
Let’s pull out the trusty old standard and QUICKLY examine how these change or might change because of the cloud….

Product – The cloud opens up new delivery options for just about any hardware or software offering or capability. IT vendors MUST rethink their product plans and at a minimum better have good reasons NOT to be in the cloud.

Pricing and Cost– In IT mind, cloud = subscription, but does cloud = cheap? That’s one of many open questions. The move from perpetual to subscription business is a very tricky one the bigger you get, but the cloud is accelerating an already present trend. Services = subscription. IT products = services…get it…How do you price cloud offerings relative to your traditional on premise/package ones…

And on the cost side, the good news, it’s really cheap to get into business, no more hardware, no more datacenters, no more test labs, no more power bills. Ahhh, that works great for new start-ups. But aren’t you ISVs used to zero marginal costs on sales. Sorry!, get ready for COGS, more users = more COGS. A great example of a business model issue that helps new entrants move faster than existing ones.

Worried about margin cannabilization, well, guess what, the yCombinator start up down the street built hosting COGs into the model from day 1. They don’t expect 95% margins, but you do, oh, no wonder their offering is cheaper. Oh, and by they way, they’ve been built for low cost scaling too, while it’s going to take you a year to get there. Price for scale now and take a margin hit??? Oh so many great marketing problems to solve!

Place – How do you spell “disinter-mediation?” C-L-O-U-D. As product become services, product providers become service providers. Distribution is “free” and market friction goes away. New geos open without friction. At least that’s the theory, but the reality is much more complex and the channel will not go away without a fight and transforming itself…

Promotion – Try and buy, freemium, SEO, Social Media, Viral spread. The Cloud accelerates ALL of these trends. Time to learn some new tricks???

Customer – Who’s your customer, where are they, what do they expect. What are they thinking, what are their habits, who cares about you? How do they find you (see P=Promotion) and how do they expect to be found. As more customers can easily try your product is it right for them, are you missing new growth segments that you just aren’t looking for???

Company – Is the company ready for change? Is the executive team engaged or scared. How high is the sponsorship of cloud inititatives? Is it genuine of lip service. Do you understand the business model barriers to transformation? Sales quota and incentives, rev rec, HR policies? This type of change can hit every corner of the business, you’ve got to be ready.

Competition – New competitors, more cloud ready, new substitute products, new pricing models to compete with and on and on. What Hosting provider or Telco would have ever predicted Amazon as a competitor???

OK, have I convinced you or is the cloud all hype? I’m ready to add the 4th C to the old model, CLOUD! Are You????


Opinion – How the Role of the F.C.C. Impacts Internet Providers

By Sarah Sorensen—how-the-role-of-the.html

On April 6th, a federal appeals court ruled that the F.C.C. did not have the authority to regulate how Internet service providers manage their network. At issue was Comcast’s right to slow customer’s access to the bandwidth intensive, file-sharing service BitTorrent. While they can now limit traffic that is overloading the network, Comcast was careful to say that it had changed its management policies and had no intention of doing so.

These comments were most likely to ease the minds of those who recognize the affect that this court ruling has on the F.C.C.’s authority to mandate “net neutrality.” Advocates of net neutrality worry that this decision is going to give providers free reign to control what a user can and cannot access on the network.

It is this point that many of the media outlets focused on, turning this case into a potential watershed moment for watchdogs looking for unfair and biased treatment of traffic by Internet service providers. A single instance of seemingly preferential treatment of one type of content over another could end up causing a provider to lose the trust of their customers. It could also be reason enough for Congress to step in and explicitly grant the F.C.C. the authority to regulate.

As such, it is more important than ever for Internet service providers to be transparent in their actions to sustain customer loyalty. They need to make sure customers know how they plan to manage their networks and what to expect in order to build trust and a lasting relationship. Given that the national focus is on increasing Americans’ access to high-speed Internet networks, anything seen to be contrary to achieving that goal, regardless of whether it is real or simply perceived, will have very negative connotations on the brand of that provider.

This is probably why Comcast’s statement around the verdict was subdued and focused on the future: “Comcast remains committed to the F.C.C.’s existing open Internet principles, and we will continue to work constructively with this F.C.C. as it determines how best to increase broadband adoption and preserve an open and vibrant Internet.”

Providers who want to allay customer fear and skepticism around their motives should make an extra effort to reaffirm their commitment to providing high-speed access and high-quality services. They should start to have an authentic, ongoing dialogue (that is threaded through everything from their Web and social media communications to policies and procedures) that explains the challenges associated with supporting all the different demands of high-bandwidth applications and exactly what they are doing or are going to do to meet these challenges. Only if customers trust that they are providing an equal opportunity service will providers be able to sustain their business without a lot of regulation.