Give it Away - The Value is in the Knowledge

By Chris Walker posted 05-21-2014 09:54

  

If I were to start an enterprise software company today, I’d give the licenses away. No, I am not thinking about open source at all. I’m thinking about services, non-core functionality, and integration. I’ll stick to Enterprise Content Management software, but the principles are applicable to any enterprise grade platforms or suites (we can debate what “enterprise” means until the cows come home to roost, but not here or now).

Let’s face it; you can go and pick almost any large ECM suite and the core functionality is going to be pretty much the same across all of them. For the sake of this discussion, let’s define core functionality as:

  • Check in / check out
  • Versioning
  • Basic search
  • Metadata
  • Security
  • Basic workflow
  • Audit
  • Some sort of UI (usually pretty crappy)

There is no substantive value differentiator to be had in choosing one over another. In fact, if any one of those items were missing, I doubt the software in question would even qualify as an ECM tool. I also think that in the very near future, file synching and sharing (e.g.: EMC’s Syncplicity and OpenText’s Tempo Box) could become core functionality (if it were my company it would be).

So, I’m going to give you the basics for free and I’m not even going to charge you for training and maintenance. I will charge you for implementation (if it’s on premises or on hosted infrastructure) and support, though. Why would I be so generous? Because I am really friggin’ smart. I want your organization to deploy, use, scale, and extend my software. I want you to realize that what really sets my software apart from the competition is the people I’ve got advising you, architecting your solutions, and deploying to your people.

What enterprise is going to live with just core functionality beyond a proof of concept phase, if that long? Even if they do, how long until they figure out that they’ll get way further if they hook up content services (yes, I said services) to other enterprise or line of business systems.

Don’t get caught up in the whole “if it’s free there’s no value” thing; it’s bogus. You need to understand the difference between cost (what you pay) and value (what you get). Besides, I already told you it’s not free, sort of. You’re going to have to implement the software. I or a partner can do it for you, and you’ll get billed. You can have your internal folks do it, and you’ll get billed to get them trained. It comes down to paying for the knowledge and expertise, not for the tool.

The value proposition for core content services (or content as a service if you prefer) is in pushing the content to other systems (processes+people+tools), and in being the core repository for content across the organization. Once your content is in the repository and being managed with the basics, only then am I going to start charging you for the add-ons. Add-ons are not by any means trivial, but they are not core for all organizations. For example, Digital Asset Management (DAM) – not everyone needs it, but to those that do it’s critical. And I am going to charge you for it (license and services). Hey, you want to use someone else’s DAM solution because it’s more suitable for your organization? Cool, but I am going to charge you for the integration. Same goes for web content management, ediscovery, records management, migration tools, large file transfers, etc. Integration to desktop tools, other enterprise systems, line of business systems, and cloud services? Damn right I’m gonna charge you.

“But what happens when partners do the initial implementation? You won’t make any money.” Truthfully, I don’t care. What I do care about is being at least as diligent about selecting partners as you are about selecting technology and service providers; I want partners that are every bit as invested in your success as I am. I want you, me, and the partners to be a triumvirate. If I really want a shot at success, I have to make sure that you succeed, regardless if you engage me directly or not. The only way I am going to do that is to support my partners as much as I support you, and to be there when their skills have gaps.

“But they’re a partner, how can they have skills gaps?” Well, because they’re partners and not my staff. Partners are never going to be as close to the product as those who build the product; it’s a fact. Besides, they’re out in the field implementing stuff and gathering feedback. That’s what I want them to do. And if I’ve set my partner model up properly partners are integrated into my processes and supported. My partners are also a revenue stream.

I don’t want any schmoe that’s done one implementation and read some stuff to be running amok out there. I want partners that can do as good a job, maybe even better, than my own staff can. I am going to spend time and money making sure partners are up to the task, and for that partners are going to pay me. If you want to work with the schmoe, that’s on you. Don’t come crying to me when it all goes wrong. Do come to me to help you fix it. I promise not to say “I told you so”. As long as there’s long-term success, I’m not too concerned about short-term faux-pas.

Anyways …

I don’t own or run a software company, and I’m not about to start one up; I’m an analyst/consultant with Digital Clarity Group. We help organizations get stuff done, including selecting technology and service providers. I hope that I’ve made you think about a few key things as you ponder your technology and vendor choices:

  • Cost does not determine value – lots of open source and low cost tools are every bit as good as stuff you’d pay a fortune for;
  • Regardless of cost, knowledge is far more valuable than tools;
  • Clients, service providers, and vendors must, must, must be in a symbiotic relationship to truly succeed.

And if you happen to be looking for some guidance on selecting technology or service providers, reach out; we’re happy to chat. You should also check out our European and North American service providers guides (note that they are specific to the Customer Experience market).



#cost #serviceprovider #vendors #technology #serviceproviderselection #implementation #Procurement #Documentum #integration #technologyselection #serviceproviders #vendorselection #customerexperience #ECM #EMC #OpenText
5 comments
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Comments

05-27-2014 22:58

Hi Chris,
This is the future indeed.Market is flooded with open source / low cost tools. How businesses will compete after this ? Its the core ? let it go..you have covered in your article. Its the knowledge , the value that will make a difference. Not that it is not considered in the past or now as a differentiator, but it will be valued much more in the time to come.

05-27-2014 22:58

Hi Chris,
This is the future indeed.Market is flooded with open source / low cost tools. How businesses will compete after this ? Its the core ? let it go..you have covered in your article. Its the knowledge , the value that will make a difference. Not that it is not considered in the past or now as a differentiator, but it will be valued much more in the time to come.

05-27-2014 22:57

Hi Chris,
This is the future indeed.Market is flooded with open source / low cost tools. How businesses will compete after this ? Its the core ? let it go..you have covered in your article. Its the knowledge , the value that will make a difference. Not that it is not considered in the past or now as a differentiator, but it will be valued much more in the time to come.

05-23-2014 11:48

To be very, very clear ...
I am all for charging for the non-commodity functionality. It's only the core (i.e.: basic, "little ecm") bits that I would give away.

05-23-2014 06:42

Hi Chris, once again I find myself in violent agreement with your position. I have long maintained that market penetration trumps license revenue (something Microsoft understood a long time ago and the rest of our industry doesn't want to hear...). The only caveat I would add is that the commodity here is the repository only ("little ECM") and not necessarily the whole platform ("big ECM") with Analytics, DAM, WCM, Case management, etc, etc. These "extended service" areas of ECM is where the vendors differentiate, and if you try to commoditise that part, then the whole industry will collapse by starving R&D. Semantics aside, your model is totally sound and I am 100% behind it! :-)