This week, I had another presentation from a tech vendor who was presenting a new tool targeted at customers who wanted to present their products in a more interesting and successful manner. They argued they had deep skills in the technology, that it would improve close rates and customer interest, and that it would positively differentiate the firms that used the solution.
However, the vendor didn’t use the solution to pitch its value or its competence, making me question whether the presenters really understood what the tool did, their representations of “competence,” and whether they overstated (what vendor EVER does that) the value of the solution.
I recall a presentation years ago by Intel, which argued at the time that buying employees a new laptop every 24 months was the best way to optimize your PC budget. Every Intel employee at the table had a five-year-old laptop. Before that, I was at an event where IBM’s CEO was asked, “If your technology is so good, why don’t you use it?” Louis Gerstner said something to the effect of: “Would you rather I used my best technology or sold it to my customers?” I never understood the “or” part. Why couldn’t they do both?
I could continue with a list of vendors over the years that pitched but didn’t themselves use advanced products, but we’d never get to the point of why firms behave so foolishly.
Let’s talk about why firms don’t eat their own dog food.
The Solution Sucks
I’ve seen several instances where using its own products almost put a firm out of business. Oracle came up with a competitor for Microsoft Office and forced employees to use it, but it didn’t end well for the employees or the firm. IBM deployed Profs (Later called Office Vision and it still sucked) as a communications/productivity solution and it sucked so bad folks left the company because of it. Sun had an interesting product it brought out to compete with Windows called the Sun Ray One (now owned by Oracle). I watched a room full of CIOs call the Sun reps idiots because the offering sucked so badly (it was a good idea, just badly executed and overpriced). Now, the core problem in each case was that the deployments were driven by executives who didn’t use the products and believed the marketing hype.
The Profs example was particularly interesting because the VP who owned the product asked his best salesperson why it wasn’t selling. She took him into a room, logged him into a Profs terminal, and had him use it. He was aghast that it was so horrid (he’d had his secretary use the tool and had never touched it himself).
These were companies that did deploy. What about the ones that didn’t? Often, it is because the CIO, who knows the product well, also knows it sucks and he’ll be shot if he deploys it. Folks won’t blame the product; they will blame the CIO, and in those firms, the CIO has the power to say no and uses that power vigorously to self-preserve. I lead with the examples I did because forcing a deployment of a bad product is worse than saying no to it. Bad products shouldn’t come to market until the “bad” parts are fixed. (You’d think that would be obvious, wouldn’t you?)
The Product Management Doesn’t Know How to Sell to IT
One of the weirdest meetings I ever had was in the 1990s at HP. I thought I was brought in to talk competitively about HP’s products only to find it wasn’t product management that had set the meeting, it was HP’s IT department, who wanted to know what technologies they should deploy. I remember having a “deer in the headlights” moment while I tried to figure out a nice way to suggest maybe they should deploy an HP solution. It became very clear that HP product management and HP IT didn’t talk much and that HP IT just wasn’t sold on HP solutions. They didn’t want to be measured on a solution that didn’t work. The sad thing was that the HP solutions were competitive but the firm was so focused on the outside that it forgot it also needed to sell on the inside. Mark Hurd was the CEO that fixed that at HP.
There is also, I think, a turf issue. For instance, you’d think CIOs at firms like Gartner would talk to their analysts, but that is often not the case because of a fear that they will give up their control to the analyst. (Not so funny story: At one of the firms I worked for, I remember going to the head of research and asking which idiot picked out the phone system because, as the telephony analyst, I’d known it was crap. Yep, it was the head of research. There’s a lesson you learn once.)
It Is Too Expensive
I co-owned a competitive lab for a time and I got a call from a VP asking why in the world some of our divisions were using a competing offering. So, I considered it and the competing offering was so much cheaper than our solution that even at cost we were too expensive. This should have been a huge wakeup call because if you can’t be competitive at cost, you have a significant problem. Yet it wasn’t. The sense I got back from the executive was that he believed this was more of an internal politics issue than it was a cost/price issue, and so moved to use his authority and contacts to pressure the other sites to deploy (I don’t recall that ending well).
Often, a firm will field a product that isn’t remotely competitive priced and depend on discounting, bundles, and other retail tricks to get the job done. This typically comes right before you have a margin crisis and a few executives find the path to early retirement surprisingly short and easy. One of the first initial tests for a product offering should be the firm’s internal users because, if they can’t justify a massively discounted cost, the firm likely won’t be able to sell it at retail.
Wrapping Up: If the Vendor Isn’t Using Its Product, Ask Why
If I’m on the buy side of a transaction, one of my first questions is whether the firm is using the technology itself. If not, that raises serious questions to me about the maturity of the offering, whether it is competitively priced, or whether it is even viable. But deployment isn’t a magic bullet, either, because I’ve noted that folks can be forced to deploy bad offerings. I’d still want to kick the tires and talk to reference accounts. If the firm cannot deploy it internally, I tend to ask them to call back when that changes. Because, at best, if they can’t get their own folks to buy it, there is a good chance that if I do, whatever caused that internal deployment issue will bite me.
Something to think about this weekend.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+