Goliath's Revenge

David, getting the better of Goliath, happens quite often these days, that it doesn’t seem paradoxical anymore. To start with, it should have been a paradox, at all. The agile opponent who has no memory or fear of failure, scoring points over his oversized rival, who is heaved down by the defensive armour and sporting a weakness, as glaring as an unguarded forehead, wouldn’t come as a surprise, would it? Add to it, the unflinching bias the 'underdog' enjoys from spectators and suddenly Goliath doesn’t seem a tough opponent at all, especially in the marketplace-battle field!


So when Youtube broke away from the pack of online-video-provider lookalikes, or when Netflix stole the mind-share and wallet-share of the home dvd viewers or when SFDC grew a near 100% three years in a row….we had many a Goliath watching aghast.


If Youtube and Netflix rung a bell and SFDC left you scratching your head, I won’t blame you! SFDC a.k.a SalesForce.com, is the Youtube/Netflix equivalent in the CRM (Customer Relationship Management) software market. The 100% growth was an exaggeration, the exact figures were 76%, 84%, and 88%. Quite impressive, I’nt it? The heavy weights SAP, Oracle were busy consolidating their businesses or buying out other rivals when Salesforce.com carves a niche for itself and almost single handedly makes a fortune out of a, till then non-existent market,..of Hosted Enterprise softwares.


Goliaths lead a tough life, if there is one thing they hate, it is to adapt to change. Elephants can’t dance, can they?

The SFDC model is pretty simple. Companies don't need to have costly Enterprise software installed at their sites (On-Premise), they could instead subscribe to Hosted applications. The Hosted/On Demand application provider would be all too happy to manage and maintain the applications for them in return for the handsome periodic subcription revenue.

SFDC announced 45,000 new subscribers last quarter (!!!). That worries investors though, (the previous quarter it was 48,000. The total subscriber tally is 444,000). .
Salesforce.com has been life’s gift to the Sales executive hard-pressed for time, wishing to make effective pitches assisted by information and intelligence on his company’s offerings without needing to be a technical expert himself and for the CEO who did not want an all too-mighty CIO.
All said, Salesforce.com is not having an easy ride either. They face lot of competition from other feature-rich vendors such as RightNow, NetSuite, SugarCRM, ( not so much from the big Vendors ). Also, inspite of the stellar growth, they are even smaller than many ERP/CRM technical implementation service providers (Indian companies like Infosys, Wipro, TCS, Cognizant etc) who specialize in technical consulting on the ERP/CRM software of the bigger Vendors like Oracle, SAP, Microsoft. A recent 5 hr Service outage makes many of us wonder whether this is too much, too fast. Considering the fact that, competitive pressures forces Salesforce.com to spend 10 times more on their Marketing budget than their Research and Development budget, I was personally impressed to know how Salesforce.com still manages to innovate. AppsExchange, their recent offering has already being ranked in the top ten technical innovations last year, sharing honors with Youtube (once again!). ( Courtesy Forbes.com)

AppsExchange, an online marketplace for complementary software includes more than 200 applications, from partners including Adobe Systems, Business Objects, Google, and Skype. AppExchange offers HR, marketing, finance, and other software, mostly from small vendors, that Salesforce doesn't make, and which runs inside Salesforce's user interface. To use these applications you need to subcribe to it, opening way to a whole new revenue stream for SFDC. Infact CEO Marc Benioff even calls their CRM, a Trojan horse !

I digress! I was supposed to write how Goliath (in this case Oracle, SAP ) could have his revenge!

An easy way would be to follow Google's example..buy 'em out. :)

Oracle , SAP could be inspired by store based movie rental giant ‘Blockbuster’s spirited fightback, which is no less interesting than any movie they sell.

Netflix, commands a great mind-share among movie audience and a huge market-share in the online dvd subscription market, which is blamed for keeping people away from movie theatres even! Over the years Netflix has carved out a neat little business for itself. For a monthly fee, online subscribers can rent DVDs that are sent out by mail. Each time a disk is mailed back to Netflix, a new one can be rented. There are ‘No late Fees ever’ or postal charges of any sort! This business model has fetched Netflix an enviable 80% YoY revenue growth over the past many years.

Nevertheless, Blockbuster is fighting back. They are out to prove that online dvd subscription and store based movie rental services can co-exist. Their flagship scheme, ‘ Blockbuster Total Access’, provides you all that Netflix does, with an additional convenience of exchanging movies at their 5600 odd stores, rather than waiting to email the dvds and get your replacement.

Wow!!

If you still aint convinced. Get yourself a copy of, one of my favorite reads

Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround by Louis V. Gerstner Jr.

Netflix has drawn its swords too. They will soon introduce an online movie streaming service, to complement the existing subscription service. So would Blockbuster just copy this move or come up with something better!

This is as good as it could get!!


My take:

The best Defence is Offence!!

The 2.6 Million Gamble: Superbowl Commercials

Widely regarded as America’s greatest national past time, the Super Bowl is a mammoth sporting carnival! Millions of Americans and many around the world are estimated to watch the Big Game. Every year it gets bigger, the 41st edition commanded a viewership of 1 billion, says certain stats.

A prime reason for its universal acceptance, as the national party time, is due the fact that, fans and non-fans equally, engage in the fun. While the real fans grunt and groan riveted to the screen all the while, everyone else is hanging around in the kitchen helping themselves…and when it’s the time for commercials, even they rush to the big screen!
Strange, eh?

‘Superbowl TV commercials’ are an undeniable part of this annual tradition. Its anybody’s guess that Marketers would get excited by this whole commotion and sense another opportunity to sell, but barely could one foresee that it would come to be regarded as the informal Oscars of TV advertising!

All the attention comes with a price..a pretty hefty one, at that.
2.6 million for a 30 second spot!!…

The wisdom of a 2.6 million investment on a 30 second spot has been questioned over and over again. An interesting article in Forbes.com suggests alternate modes of using this money.

Some of their alternatives:

· One could run 10 full page insertions in leading daily papers in each of the top 10 markets!
· Two giant hoardings could be erected at Times Square, New York for a whole year !
· 2.6 million would fund, 1.7 million mailers sent directly to potential customers or 52 million e-mails . [ No expert on this, but if I assume you share the disdain I have for email marketing, only a knuckle-head would spend such money this route]

Check the link:
http://www.forbes.com/technology/2007/01/30/super-bowl-advertising-tech-media-cx_lr_0130superbowlad_slide_2.html,

I personally believe, the undivided attention of a billion pair of eyes, is worth the effort. (‘undivided attention’ would be an overkill!, football fans are known for their short attention spans) Rarely, do we see viewers rushing to the TV while a commercial is being aired!
Add to this the word of mouth which follows, the Superbowl Ads voting and the millions of re-runs on the web, you have your money’s worth of visibility.


[ Though the ‘audience reach’ is high for a Superbowl Ad, the other dimensions of Advertising effectiveness, is not equally positive.
Also note that, as near everyone, is watching the game/commercials, you never get to send a focused message to your targeted audience. Refer Myers Five Dimensions of Advertising Effectiveness ]

This tremendous marketing opportunity has been historically used by the Big ones or the ambitious few. Coke, Fed ex, Budweiser, Bud Light and so on have been the front runners.
Perhaps, the most known success has been for Apple, with their ‘ 1984 Ad’ which has since then become part of Advertising folklore.



Along with some great successes we have many well known failures too.Due to the High stakes involved, a faux-paux would mean catastrophe!!.

For any other TV Ad, at any other occasion, care needs to be given on the Content, the objective, the motivation, the message and the Cognitive/Affect/Experience aspects. While all this, do apply to a Superbowl Ad too, nothing should transcend the ‘Ambition’ and ‘Entertainment’ value.
You can tell viewers on your sales promotions or product benefits some other time, a Superbowl should be mainly for ‘Brand Image Reinforcement’.

..and about the Ads this year, I personally felt, we did not get to see any outstanding ones.


The 2007 Superbowl Ads can be viewed at : http://www.youtube.com/superbowl


Of the ones, I feel the ‘Budlight’ series was effective. I especially like the Ad on the hitch hiker. The axe being a ‘bottle-opener’ was awesome!!
At my office, I noticed the Budlight Classroom Ad, getting lot of giggles, though I watched the Ad somewhat stoic ( or was it because the Indian with his terrible accent, offended me )





I felt, the GM Robot dream Ad was quite good and it did convey the intended message well. Some say that the Ad reminded them of the mass-fires and shutting down of plants and thus may back-fire! Well, I am not sure..



The Snickers Ad was quite funny, especially the way the mechanic guys freak-out when they realize they had an accidental kiss.(I promise, I’m not homophobic) However, The next time while I was at the vending machine deciding which bar to take, I decided to give Snickers, a skip… Sweaty men kissing and the caption ‘Most satisfying’ (!!) got me confused, I believe.



Sprint’s ‘Connectile Dysfunction’ and the Snapple Green Tea Ads were hillarious.





I loved the Fed-Ex caveman Ad last year, but the ‘Moon office’ this time was quite disappointing, The Fed-Ex Ground shipping Ad, probably was effective, but drab..
the Giant Robot inspired Garmin Ad, was primitive!!









The Coke Videogame Ad is one of my all time favorites, but i have seen it plenty times before. The new 'Superbowl' Happiness factory Ad, on the otherhand look creepy..the happy little creatures seemed as if there were some Micro-organisms in the drink!! ..psbttt..






My take:

All Publicity might not be Good Publicity, especially if they spell your name right but get your intent wrong ! ;)

Hi Everyone..

Guess i'll have somethin worth to say..

Love, Dan