There's no doubt that technology is driving fundamental changes in many different kinds of businesses. The public perspective on this has been evolving over time: in 2011, Marc Andreesen noted that "software is eating the world." In early 2014, David Moschella noted that as innovation in multiple araeas proceeds, any traditional company "can be seen by the technology industry as either a valued customer or potential lunch." Later in 2014, GE chairman/CEO Jeff Immelt opined that "If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company."
Between Uberfication and the sensor-and-analytics environment that a product firm like GE would likely call "Industrial Internet" and other firms would categorize as "IoT," there is growing recognition that software and data will be at the core of a very wide range of new business strategies. One thing that hasn't been very well covered is what this evolution means to the sales and marketing operations of firms that are newcomes to software and data. A new LinkedIn post entitled "Every Company is now a Tech Company (and What That Means for You) provides some good initial guidance for companies that need to find operational answers to new questions.
The post is written by Bob Segal, a long-time principal at channel consultancy Frank Lynn & Associates. I've worked with Bob over the years on channel training issues, meaning that I can vouch for the depth of his perspective. I've found that Bob is very good at translating complex channel issues into clear business choices and requirements, and this post demonstrates that skill by presenting the new challenges facing traditional-business sales executives as they contemplate the steps required to succeed in a software/data-centric market.
Bob's post highlights six issues that these executives need to understand and act on as they build a strategy for their expanding product portfolio:
- Software is central to customer business operations, which is a good news (more exposure to decision makers) / bad news (is your sales channel equipped to handle more frequent contact with more senior customers?) situation.
- Data provides insights into many important issues...but is your firm adept at data management including security?
- Software uses an ecosystem-type go-to-market model, not a traditional hierarchical channel (Bob doesn't explain this further in the post, but the management issues are very different across these two approaches).
- "Software is increasingly 'rented'...rather than 'sold'." The post is correct in noting that this will tax marketing and sales resources of firms that lack experience in software; the reality of SaaS upgrade, marketing and billing cycles taxes even experienced software firms.
- Software blurs "us vs. them" lines
- Many resellers will need to become integrators to survive; many won't make the transition.
This post is a good example of why the ascension of IoT won't be as smooth as massive forecasts for connected devices might suggest. There are many operational issues - sales, data management, security, etc. - that need to be addressed as part of the transition. Even within IT, firms struggle with how to best sell and support software/data-dependent solutions - and firms within IT have an advantage; I recall the folks at Frank Lynn & Associates, who deal with customers from many different industries, saying that IT was one of the two most complex industries from a channel perspective, and that was long before XaaS and IoT further complicated the landscape. Companies coming from other industries will face a steep learning curve as they make the transition that Immelt predicts.
Here's a link to Bob Segal's LinkedIn post: http://insightaas.com/BobSegalLI