WYSIWYG

Software Patents - Live To Tell Another Day

Tuesday, June 29, 2010 by Mark Barry

As a growth venture capital firm, we are highly interested in IP and patents. Yesterday, the much anticipated Bilski vs. Kappos business method case decision was released by the Supreme Court. And, while the court affirms the decision in a particular case, it decides not to do much in narrowing the scope of patenting.

It affirmed the overall decision from the Federal Circuit that Bilski's patent was invalid for being too broad, but much more importantly, it turned back the Federal Circuit's machine or transformation test, which many believed ruled out pure software patents. Instead, the court said that the courts "should not read into the patent laws limitations and conditions which the legislature has not expressed." In other words, business method and software patents survive.

With respect to expansion stage software companies, patents have always been an important element when raising venture capital. Over the past few years, it has become an increasingly controversial topic within the tech community and one that we will continue to watch closely.

I would be interested in hearing your opinions.

Sales 2.0: Succeeding in the New World of High Productivity

Monday, June 14, 2010 by Mark Barry

Last week, OpenView Venture Partners, along with the American Association of Inside Sales Professionals (AA-ISP), Georgia Tech Research Institute (GTRI), and Georgia Tech Advanced Technology and Development Center (ATDC), hosted an executive workshop for venture capital investors and venture capital companies entitled "Sales 2.0: Succeeding in the New World of High Productivity".

Our guest speaker was Anneke Seley, CEO of Phone Works and co-author of Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology.

Special thanks to Bill Cutts, Director at GTRI and our sponsors, Bob Perkins, founder and CEO of AA-ISP, Marge Bieler, founder and CEO of Rare Agent and Brent Wallace of ZoomInfo.

Anneke opened up her presentation with a picture of her first boss, Larry Ellison, founder and CEO of Oracle, where she was employee #12 and built out their direct sales channel called OracleDirect. She then went on to introduce a picture of her first employee, Marc Benioff, founder and CEO of Salesforce.com. Needless to say, these are two titans in the world of information technology.

Anneke spent the morning discussing Sales 2.0 as the "new model" for sales. This model is based on inbound marketing and making outbound sales calls with telemarketing people, using the phone and Internet to create qualified leads, while decreasing cost of sales compared to a traditional, face-to-face model or what Anneke refers to as "Sales 1.0". If done properly, Sales 2.0 or "process-driven" sales can increase sales and reduce expenses.

She then went on to describe the Sales 2.0 Framework:

1. Strategy - alignment, resource allocation
2. Process - measurable, predictable, customer centric
3. People - open, team oriented, relationship focused
4. Technology - enabling tools

Each of these stages builds on one another. It is important to think of it in this way in order to maximize resources and enhance overall sales productivity. We often see expansion stage companies that throw resources on the phone without first defining the sales process. Unfortunately, if you can't measure it, you can't manage it. My advice is to make sure that you follow this framework and hire someone to manage the process. Without this, the odds of failure are high.

Other tips and tricks:

- Generic pitches are dead..must be specific to client and include value proposition that
resonates directly to them.

- Use LinkedIn to understand who they know, what they do, who you know that knows them.
Get "connection" or referral to the decision maker.

- Cold Calling 2.0. Research the companies. Use personal approach with cold calls and e-mails to
the buyer. Make the "cold" portion as warm as you can.

- Embedded video in e-mail blast's gets 20% better response rate. Humor works well in videos.

- Use tools like mindjet or jing when "white boarding" with a prospect

- Another article that is extremely useful is "The Sales Learning Curve" by Mark Leslie at
Stanford Business School. The more a company learns about the sales process, the more
efficient it becomes at selling, and the higher the sales yield.

- Gaining agreement between sales and marketing on the definition of a qualified lead is critical.
Anneke previously used the term "BANT" - Budget, Authority, Need and Timeframe.

- Order a copy of Digital Body Language by Steven Woods. Many of today's buyers have access
to information on the web and much better informed. Gone is the day that sales reps are the
primary conduit for information. What are customers doing on your web site? How do they
use the data. How do you measure this data for customer follow up? What measurement tools
do you use for your web site? You need a web analytics engine to see what pages people have
viewed, if someone has come in, downloaded a white paper, looked at customer testimonial,
etc. These are good prospects and need to be contacted quickly.

Sales and Marketing - Crossing the Divide

Tuesday, May 11, 2010 by Mark Barry

I read a great blog today entitled Why Marketing and Sales Need an SLA by Ardeth Albee. Ardeth recently spoke at our inaugural meeting of the Association of Inside Sales Professionals (AA-ISP) in Atlanta. She is also the author of eMarketing Strategies for the Complex Sales. If you have not read this already, I highly recommend it for expansion stage companies. It is a comprehensive guide to help marketers drive decisions to buy in their favor.

In Ardeth's blog, she points out that expansion stage companies that haven't developed an appropriate work flow and process for the disposition and handling of lead generation from start to finish put their customer acquisition success at risk. This is basis for establishing what Ardeth refers to as a lead generation services agreement or SLA between sales and marketing.

This starts by having a clear lead definition and agreed upon lead scoring attributes between sales and marketing support. After all, marketing is responsible for delivering qualified leads and sales is responsible for selling. How on earth can you possibly get there without sales and marketing support agreeing on the basic terms? In the end, this will foster a better working relationship between sales and marketing, enhancing productivity and delivering qualified buyers.

Are You Effectively Leveraging Your VCs and Board?

Friday, May 7, 2010 by Mark Barry

This week, Brad Feld posted an excellent blog on giving your venture capitalists (and board members) assignments. Brad points out that CEOs need to reach out to their venture capital advisors and/or board members for help with key issues/impediments as part of their business growth strategies. This means holding each member accountable and to each other.

Coincidentally, I had the same conversation with one of our expansion stage company CEO's this week. I suggested that he lean on his VCs and board members more often to help remove impediments to growth. Many times, the CEO will shoulder this on his or her own for fear of exposing vulnerabilities. Conversely, I believe it reflects positively on the CEO for digging into the issues, demonstrating a commitment to continuous improvement, and leveraging the skill sets around them. VC or board assignments is a great way of doing this and besides, they really enjoy doing it. Examples of this might be helping to source or recruit senior leadership to the company, raising venture capital, or strategizing on business growth and company exit strategy.

Are you effectively leveraging your venture capital investors and board?

Are you running a profitable professional services business?

Friday, April 30, 2010 by Mark Barry

As a growth capital fund, I am always surprised to find that expansion stage software companies that sell professional services rarely know whether they are profitable or not.

While expansion stage companies have systems for tracking financial performance, they rarely capture essential information about the service side of the business. As a result, companies struggle to manage their service and support financials, while impacting margin.

What are the key performance indicators that matter?

Available Hours: Companies need to be realistic about this. Approximately 25-30% of these hours are attributable to non-delivery hours, i.e., vacations, meetings, training, etc. If your available hours fall below 50% of a normal work week, it's hard to be profitable unless people are working extra hours.

Billable Hours: Well-managed professional services groups typically bill between 50-80% of their available hours. If you focus on greater than 80%, client satisfaction will certainly suffer.

Average Billing Rate: It is important that you maintain and even increase your average billing rate over time. It is easy for customers to haggle over product pricing, however, there should be no sensitivity to service pricing. Also, customers generally pay higher rates for services related to new or cutting-edge products. As customers absorb and build this competency in-house, it tends to commoditize or dilute the average billable rate. I have found that consultants are most happy/productive when they are working on the "new-new" thing and not exceeding projects greater than 3-4 months in length.

Profit Margin: Services margins typically run between 30-35%. Overhead costs will run 60-65% on average. Considering feathering in sub contractors to relieve this cost. Ideally, in house consultants should be focused on high value work. Also, investing in better efficiency, tools, reuse, and knowledgebase will ultimately increase productivity and thus margins.

Cloud Computing and the Great Wild West

Thursday, April 22, 2010 by Mark Barry

Earlier this week, I attended the international cloud conference and expo at Javits Convention Center in New York.

Needless to say, cloud computing is "hot" and this show reminded me of an early Comdex drawing over 11,000 attendees. A number of the exhibitors commented that each cloud conference gets progressively better as well as the content and quality of speakers. The general consensus is that it continues to feel like the "wild west" as vendors scramble to position themselves for what is sure to become the next "gold rush".

As a growth venture capital fund, we are always evaluating new and disruptive market opportunities for deploying growth capital. While some would argue that the conventions of cloud computing have been around a long time, I believe it lacks the innovation that is presently stirring the industry. Unfortunately, this hysteria creates high valuations for investors, but at the same time industry heavyweights who are willing to pay high multiples to play catch up.

It was clear from walking the exhibit floor that vendors are positioned themselves into one of three categories - infrastructure as a service (IaaS), platform as a service (PaaS), or software as a service (SaaS). A large majority were either IaaS or PaaS.

I met with a number of companies including Racemi, Objectivity, CloudTest by Soasta, RightScale, and Savvis.

While some of these companies have been around for a while, the market has created an opportunity for them to reinvent themselves, while creating competitive advantage. One thing is certain, while the public cloud has grown in popularity, the private cloud is still in its infancy and requires industry standards (security, management etc.) before the enterprise will begin to adopt. In the meantime, I expect the heavyweights to stall the market (messaging) to give themselves time to catch up, while creating some interesting inorganic growth opportunities for the market.

Burning the Ships...Advice for Top Venture Capital Firms

Tuesday, April 13, 2010 by Mark Barry

Today I attended the GSU Corporate Intellectual Property Roundtable with guest speaker, Marshall Phelps.

Marshall oversaw Intellectual Property and Licensing at IBM for 28 years and then went on to work for Microsoft as Corporate VP of IP Policy and Strategy responsible for setting the global Intellectual Property Strategies and Policies for the company (comprising well over 60,000 patents and patent applications worldwide). He also co-authored a book entitled Burning the Ships: Intellectual Property and the Transformation of Microsoft which describes Microsoft's radical overhauling of its intellectual property (IP) strategy.

This roundtable series is a partnership initiative with the Georgia State University College of Law and the J. Mack Robinson College of Business and provides the premier forum for the exchange of intellectual property ideas, best practices, information, and networking, exclusively for corporate attorneys and business people.

The roundtable is organized by Kent Stier, Merchant & Gould, and Jackie Hutter, The Hutter Group, and is one of the initiatives of the GSU Intellectual Property Advisory Board.

Marshall opened his presentation by discussing his experience at IBM in building its $2 billion patent portfolio. He shared a story about his initial meeting with Lou Gerstner and how he convinced him that there is value in licensing intellectual property. In the first two years alone, Marshall achieved $1 billion at a cost of $28 million and signed 1,000+ cross license agreements resulting in no patent litigation over ten years. Not a bad return on investment.

The second half of Marshall's presentation focused on his experience at Microsoft and how intellectual property changed the culture of the company from closed to open minded. As a result, Microsoft now has over 63,000 patents and considered one of the most strategic portfolios in the world. He also spoke about the importance of an IP strategy fulfilling the company business needs vs. the other way around.

One thing I found rather interesting is the idea of forward looking patents. Marshall described a process where he would gather Bill Gates and senior people within Microsoft four times a year to discuss where the industry would be in five years. This envisioning process allowed patent attorneys to begin the process of filing patents at a rate of 10-20 a year. An example is cloud computing. Bill discussed this several years ago, which is beginning to bear fruit five years later.

Marshall's advice for top venture capital firms and early to expansion stage companies is to stress the importance of patents. He believes patents allow the small guys to create competitive advantage. For example, Microsoft Windows has over 53 million lines of code and every line represents a potential for patent infringement.

Lastly, I hear that the United States Supreme Court will issue its much anticipated decision in Bilski v. Kappos sometime this week. This could have serious implications calling into question whether business methods are patentable.

A New Generation of Leaders for 2010

Tuesday, March 30, 2010 by Mark Barry

Aspire, an internationally-recognized leader in executive coaching, leadership development, consultancy, events and research related to women as leaders, have recently released a report entitled "Tearing Up the Rule Book - A New Generation of Leaders for 2010". This report is based on a survey completed by more than 300 global leaders from 30 countries, including 60% at Director to CEO level. This annual survey, conducted jointly by Aspire and Customer Interpreter Ltd., is now in its seventh year.

Once considered the domain of women and a hindrance to their effectiveness in the workplace, "transformational" behaviors, such as long-term vision, teamwork, empowerment, and effective communicating, now form essential leadership skills for the future of the global economy.

Research also demonstrates that these behaviors, combined with new transformational traits such as ethical decision making and parenting skills, once labeled as "feminine" and "soft" are now highly valued.

According to Dr. Samantha Collins, founder of Aspire, "The new century needs a new generation of leaders who are more transformational and embrace their feminine qualities. The old school style of many politicians and corporate CEO's is on the way out and transformational leadership behaviors are on the way in".

What makes a new generation leader?

The best leaders tend to be female and they tend to improve with age and business or parenting experience. Contrary to popular belief, the most senior people are not necessarily the best leaders. Interestingly, board members actually had lower leadership (LI) scores than other managers.

People scoring highly on the leadership scale often work in the public sector. They opt for jobs that will make a difference and in companies that make a difference.

The New Generation Leader, has high levels of emotional intelligence, promote teamwork and empowerment, and are committed to seeing the long term picture.

At OpenView Venture Partners, we have a number of women leaders in sales and marketing, operational support and product and development that exhibit these "transformational" behaviors. It is part of firm values and approach to venture capital investment, and growing new generation leaders.

Cloud Expo at Javets..Not to be Missed

Sunday, March 28, 2010 by Mark Barry

If you are planning to attend the Cloud Expo at Javets Convention Center in New York on April 19-12, don't miss Michael Crandell and Lew Mooreman's session entitled Beyond Theory: Applications in the Cloud Today. Michael is the CEO and founder of RightScale and Lew is president, cloud and chief strategy officer of RackSpace.

Citing real-world case studies and best practices process, Michael and Lew will discuss the pragmatics of cloud computing today - what type of applications are best for the cloud (and which aren't), how to get started, operational support, and what steps are already being taken to ensure the cloud's security and stability.

RightScale offers a fully automated management platform that delivers the scalable, cost-effective, on-demand power of cloud computing, while providing complete IT control and transparency. To date, thousands of deployments and over 600,000 servers have been launched on RightScale for leading companies such as Animoto, Playfish, Sling Media and TC3.

RackSpace delivers enterprise-level hosting services to businesses of all sizes and kinds around the world. Since 1998, RackSpace have grown to serve more than 70,000 customers, including over 51,000 cloud computing customers worldwide.

One of my board colleague's at Central Desktop, John Greathouse, turned me on to RightScale a few months back and I continue to run into them around every corner. Good expansion stage investment, John.

FireStarter Series...Cloudy with a chance of Awesomeness

Sunday, March 28, 2010 by Mark Barry

If you are an early to expansion stage software company exploring cloud-ready product and development platforms for creating competitive advantage, don't miss Microsoft's FireStarter event series webcast on April 6th.

Each day tackles a single Microsoft technology, including free sessions presented live by Microsoft developers, IT pro evangelists and technology specialists - with special appearances from Microsoft luminaries. Below is a link to the agenda and registration details.

Cloudy with a chance of Awesomeness!
The cloud is everywhere and here at Microsoft, we’re flying high with our cloud computing release, Windows Azure. As most of you saw at the Professional Developers Conference, the reaction to Windows Azure has been nothing short of “wow” – and based on your feedback, we’ve organized this Windows Azure Firestarter event to help you take full advantage of the cloud.

This daylong event will focus on helping developers get ‘cloud ready.’ We’ll start by revealing Microsoft’s strategic vision for the cloud, and then offer an end-to-end view of the Windows Azure platform from a developer’s perspective. We’ll also talk about migrating your data and existing applications (regardless of platform) onto the cloud. We’ll finish up with an open panel and lots of time to ask questions.

Audience:
Professional Developer/Programmer

Date/Time:
Tuesday, April 06, 2010 8:30 AM Pacific Time

Registration:
http://msevents.microsoft.com/CUI/EventDetail.aspx?EventID=1032441229&Culture=en-US

Hard Knocks and Appreciating Success..The Old Fashioned Way

Sunday, March 28, 2010 by Mark Barry

Over this weekend, I had an opportunity to visit with some of my closest friends in Baltimore. Its been a while since I've been back to visit with family and friends and some of my fondest memories were established there when starting my career and a family.

I began my career at Wang Labs in sales support and marketing as a territory sales rep. This required going through an intensive 6-month associate training program in Lowell, MA before I was assigned a geographic territory. It didn't take me long to figure out that the best way to approach a geography is to segment. Once I selected a segment (wholesale distribution), I then looked for software solutions that ran on Wang's work horse, the 2200. I recall going into industrial parks and knocking on doors to get an appointment. I must have called on every account within a 25 mile radius of Baltimore. It wasn't long before I earned my "stripes" and was assigned a "prime" territory to become a top 1% achiever worldwide.

I will always remember my first district manager who traveled with me on sales calls in the car. As we were driving, he would randomly point to industrial parks and ask me if I had called on a particular company. He was a hard charging type of guy that expected a lot from his sales team. One day while we were making sales calls, I decided to drive through residential neighborhoods. He asked me "what are you doing?" and I replied "looking for new business opportunities". He laughed and we went on to become great friends long after my departure from Wang.

As I look back on this experience, I learned that nothing comes easy in life. You need to take a few knocks and objections before you can appreciation success. I meet many people today that feel a sense of entitlement and looking for a short cut. Well, I have news for you, there are no short cuts and even if you found one, it's short lived.

As a growth stage venture capital fund, I am constantly reminding myself that hard work and tenacity will eventually pay off. It will take a few hard knocks, however, it's worth it in the end run. Whether you are an early or expansion stage company, stay focused, work hard and success will follow.

Ten Hot Cloud Apps @ Google Apps Marketplace

Sunday, March 28, 2010 by Mark Barry

I finally had an opportunity to visit the Google Apps Marketplace the weekend. It's chalked-full of third party suppliers of on-demand or software as a service (SaaS) applications that supplement Google's own cloud-based applications.

As an expansion stage venture capital fund, this is a great place to troll for potential investments/alliances for our existing portfolio.

Google Apps Marketplace takes some queues from the widely popular Apple Apps Store. Currently, Google Apps includes the search giant's Gmail, calender, Google Docs and a host of other applications. Now, with the launch of Google Apps Marketplace, Google offers a myriad of productivity, accounting, security, scheduling, workflow and management applications.

The top ten applications gaining traction are: Manymoon, OffiSync, RunMyProcess, MyERP.com, Socialwok, Aviary Design Suite, TripIt (I'm an avid user), Corsys Process Factory, Zoho CRM (have relationship with one of our portfolio companies (Central Desktop) and FreshBooks.

Google to Enterprise...Beam Me Up Scotty

Saturday, March 27, 2010 by Mark Barry

Is Google finally getting serious about its enterprise strategy? Google recently hired Amit Singh, a 20-year Oracle exec who has worked in product development, channel marketing, sales, strategy and acquisitions as VP of International Sales.

Singh will focus on recruiting Fortune 500 companies, especially in Europe and Asia, to use its cloud based applications. This, in combination with Google's recently released Apps Marketplace store, hopes to provide compelling alternatives to Microsoft's desktop suite, while creating competitive advantage in the cloud.

I'm sure Singh is aware of the up hill climb he will face in trying to convince enterprise customers to switch their business computing platform to Google in the areas of manageability, scalability and security.

I think back on the earlier days at Microsoft when they were trying to win market share from WordPerfect, Lotus and Novell. At first, it was winning the feature/function wars through influence marketing with end users, but quickly moved into IT, which only cares about administration and security.

While Google is winning the hearts and minds of consumers, the question in my mind is how serious are they at making the necessary investments to win in the enterprise (sales and marketing, product development and operational support)? Will they attack this directly or through channel partners (e.g., cloud service providers)? How long will this take?

In the meantime, Microsoft is not resting on its laurels. They are aggressively moving the organization (and field) towards Azure, while "pitching" enterprise customers on the merits of an evolutionary vs. revolutionary approach.

Historically, the key to any change at the desktop has come from consumer adoption and shift in the compute model. As enterprises shift to the cloud, this presents an ideal opportunity for Google and other competitors to attack Microsoft's crown jewels - the desktop. The question is can Microsoft mobilize quickly enough to take advantage of the opportunity?

It should be an interesting one. Stay tuned.

Cloud Computing and Government Oversight

Friday, March 26, 2010 by Mark Barry

There have been a number of blog posts this week about the policy implications of cloud computing as a result of a roundtable dinner discussion at the Aspen Institute, hosted by Microsoft.

According to Cecilia Kang, Washington Post Staff Writer, "Microsoft has emerged as a proponent of some rules of the road for the largely Wild West that cloud computing companies such as Google, Yahoo and Amazon operate. Microsoft has called on Congress to update the Electronic Communications Privacy Act to clearly apply to protections on the Web. And it wants stronger rules against cyber attacks by reforming the Computer Fraud and Abuse Act (I'm sure this is something that venture capital companies would welcome).

Brad Smith, Microsoft's General Counsel, was quoted on his blog as saying "we must work collectively to ensure that we move responsibly to cloud computing". He said a critical way to protect privacy would be for Congress to update the Electronic Communications Privacy Act. This statutory framework for electronic communications privacy was established more than 20 years ago and needs to be updated to be aligned with the current technological realities. There are other new responsibilities that we must work together to address such as strengthening security through enhanced criminal laws and greater transparency from service providers; combating fraud; building use trust through transparency; promoting openness and interoperability, and stimulating innovation through protection of intellectual property. See my earlier blog on innovation and patent protection.

According to Cecilia, the FTC is investigating privacy implications in cloud computing. One consideration is that consumers typically don't know where their data is being held or what protections they have. Also, companies are making money off the data and its not entirely free. This becomes highly complicated as you consider what happens overseas. Nations don't agree on privacy or other rules online and there is no common framework between the United States, Europe and Asia.

In recent weeks, this topic has gained steam with top policy makers as Google, Go Daddy and Network Solutions have decided to cease new operations in China because of censoring practices and competitive positioning.

While there is much debate on how much government regulation there should be over cloud computing and over self-regulation of the market, one thing is for certain, there should be basic privacy and security protections for all consumers and that providers (includes expansion stage software companies) should be held to a higher bar.

Mining Customer Data and Retention...Movin' Dirt and Big "Hunkin'" Spreadsheets

Wednesday, March 24, 2010 by Mark Barry

According to a recent Aberdeen survey entitled "How the Best-in-Class Use Customer Data to Boost Retention Revenue in 2010", 48% of 1,230 business executives from cross-functional disciplines indicated "organic revenue growth" is a top business goal this year. Whereas customer acquisition will be a primary focus among companies in 2010, a growing number are shifting marketing budget away from customer acquisition initiatives to retention marketing initiatives; with the goal of increasing retention revenue from existing customers. In fact, 56% of all survey respondents indicated "increased cross-selling and up-selling to current customers" as a customer-facing action their business has taken (or will take) in response to the economic downturn. Makes sense, right?

As I read through the survey results, one thing stood out for me. Aberdeen stated "Customer retention is about more than just keeping customers; it's about transforming existing customers into a highly profitable source of revenue and knowing how to optimize your marketing investments". I believe this starts with leveraging customer data to gain a more holistic understanding of buyer behavior in order to segment and deploy retention initiatives.

35% of respondents of Best-Class organizations are applying customer analytics techniques to improve cross-selling and up-selling messaging. Likewise all organizations cite the need to identify new and emerging customer segments as a top strategy.

Aberdeen provides the following recommendations:

Centralize customer data within a customer database
Continue to enhance you customer profile
Develop a periodic process to scrub the customer database

Recently, OpenView Venture Partners, an expansion stage venture capital fund, held a quarterly executive forum on market segmentation. Luke Hohmann, founder and CEO of Enthiosys and senior advisor to the firm, discussed the importance of retention and utilization. That is, the addressable opportunity within an existing account and your penetration rate. If you have low utilization, you are at higher risk of losing the customer. In order to increase utilization, you may need to do some research on customer data (move dirt and build big "hunkin" spreadsheets as Luke would put it), to understand the underlying issues (e.g., user/buyer personas, messaging or product). Needless to say, at the end of the day, its about increasing penetration, profitability and switching cost (stickiness).

What is your retention strategy?

Advice on Building a Relationship with Microsoft

Wednesday, March 24, 2010 by Mark Barry

For those of you who are trying to establish a relationship with Microsoft, I thought I would share some of my insights and advice after 15+ years with the company.

As you well know, Microsoft is a complex beast. It can consume massive amounts of time trying to navigate the organization, especially if you are an expansion stage company.

Below are my words of advice.

1. Understand Microsoft's business strategy
It's important that you do some research to understand Microsoft's core business strategies. There is a treasure trove of information available on the web and through the analyst community. One of my favorite resources is Directions on Microsoft by Redmond Communications. It's pricey, but well worth it given the quality of content. This was my primary resource for staying abreast of everything going on within the company. Do your homework, it will pay-off handsomely.

2. Align with something they care about
After you have conducted some research, it's important that you understand Microsoft's whole product marketing strategy and how you fit in. My friend Luke Hohmann, founder and CEO of Enthiosys and senior adviser to OpenView Venture Partners calls it "Marketecture". It embodies the complete business model, including the licensing and selling models, value propositions, technical details relevant to the customer, data sheets, competitive differentiation, brand elements, the mental model marketing is attempting to create for the customer, and the system's specific business objectives. Really dig deeply to understand what this is about and how your product or service compliments it. Another thing that gets Microsoft motivated is to help them beat their competitors. If your product provides the ability to "switch" a customer to the Microsoft stack or generates a sense of urgency (such as compliance that "pulls" the stack), you're in good shape.

3. Adopt the stack
Need I say more? This means adopting the stack from end-to-end. The more products you "pull", the better. In my mind, this is just getting your foot in the door.

4. Become a Microsoft Gold Certified Partner
Once you have your foot in the door, you need to validate this with certification. This is a prerequisite to building any level of relationship with Microsoft. IMO, Microsoft has the best partner program on the planet. One of my early colleague's from the mid atlantic district, Allison Watson, is now corporate vice president of Microsoft's worldwide partner group and has done an outstanding job of taking this program to the next level. Also, if you are an emerging startup, I highly recommend that you leverage Microsoft BizSpark, a program that provides software, support and visibility for software startups. My former boss, Dan'l Lewin, corporate vice president of strategic and emerging business development, launched this program a couple years ago. It has been extremely successful. If you are interested in this FREE program, OpenView Venture Partners is a Network Partner. Feel free to contact me at mbarry@openviewpartners.com for a registration code.

5. Get ahead of the curve
As you plot the course, always stay one-step ahead. Make sure you understand where Microsoft is going with its next product release. If you join the various partner programs, this will give you access to technical previews, etc. that will be useful. The last thing you want to do is to collide and become obsolete.

6. Focus
As I mentioned earlier, Microsoft is a highly complex organization. As an emerging stage company, it's easy to get swallowed up by the machine and spin your wheels. My advice is to subscribe to Directions on Microsoft to gain access to Microsoft's organizational chart. This is published twice a year and highly useful in navigating the organization. This chart lists general manager level and above. It really helps to understand where you are in the organization and most importantly, where to focus your time and effort. I recall a statement from a general manager that resonates with me to this day..."be brief, be bright, be gone". I think this pretty well describes it.

7. Evangelize
My last word of advice is to take advantage of every opportunity to evangelize your company. This means attending the various Microsoft events that matter. For example, the worldwide partner conference , convergence and product development conference (PDC) are all good events to attend. This is a great way to leverage your time by meeting with people from the product groups to field organization to complimentary partners. Take advantage of it and make it a religion.

Hopefully, this information is helpful as you begin to plot your relationship with Microsoft. As an expansion stage venture capital fund, we are always looking for new ways to maximize value for our portfolio companies.

Happy selling!

Growth in Virtualization, Security and Collaboration

Tuesday, March 23, 2010 by Mark Barry

To salute more than 15 years of its Cisco Certified Internetwork Expert (CCIE) certification and to gain insight into what digital infrastructures will look like over the next five years, Cisco today announced the results of the most comprehensive end-customer survey ever conducted of the international CCIE community.

Commissioned as part of Cisco's overall 25th anniversary celebration, the research was conducted by Illuminas, a strategic research firm, to explore the unique perspective of some of the most knowledgeable and well respected information technology professionals in the networking industry. A total of 970 CCIE holders from 79 countries participated; their employers range from Fortune 500 enterprises to small and midsize organizations representing a wide variety of industries.

Survey Highlights:

Rapid Adoption of Virtualization

More than two-thirds of the CCIE holders surveyed said virtualization will be the top networking investment over the next five years.
Organizations are increasingly adopting virtualization as an energy, space and cost savings measure.
CCIE holders expect energy efficiency in the data center to be the top green networking initiative impacting networks over the next five years.

Increasing Security Requirements for Increasingly Sophisticated Networks

CCIE holders believe it is critical that networking professionals stay ahead of the increasing number of internal and external security breaches that jeopardize today's networks. Over the next three to five years, security and risk management will be the networking skills in greatest demand, according to 64 percent of the survey participants. One out of three expects network and information security breaches to remain a top concern of CIOs over the next five years.
As organizations embrace collaboration technologies across business and geographic boundaries, network security will continue to be a critical component of IT strategy.

Collaboration via Unified Communications and Video

Unified communications will lead to increased collaboration in the workforce. 47 percent of the CIE holders said. Thirty percent of the respondents expect that accommodating the needs of a highly collaborative, global workforce will be a top CIO concern over the next five years as companies strive for creating competitive advantage.
Collaboration and Web conferencing solutions will play a key role as enterprises prepare to address the complexities of this highly mobile, highly collaborative global business environment.
Fifty-two percent of the respondents believe that real-time video solutions, such as Cisco TelePresence, will be one of the top green initiatives affecting networks and network engineers.

At OpenView Venture Partners, we have deep experience investing in expansion stage virtualization, security and collaboration companies. We believe these sectors will continue to flourish given the emergence of cloud computing infrastructure and services and we will continue to embrace these trends in delivering superior returns for our investors.

Healthcare Reform and Technology Spending

Tuesday, March 23, 2010 by Mark Barry

As I woke up this morning to grab the paper, let the dog out, start my daily brew and check the morning news, there was nothing but buzz on the historic healthcare reform legislation.

As I contemplated whether this is good or bad for America, my inner IT geek told me "Mark, reform means change, change means compliance, and compliance is good if you're an early to expansion stage venture capital fund". It creates a sense of urgency for customers to "buy" software, which creates new startups, which employs people, which reduces costs and inefficiencies. So, I choose to look at this as cup half full, than cup half empty. Long term, my belief is this is good for America.

Erik Sherman of BNET cites in his blog this morning that there are dozens of references in the bill related to information technology. For example, the "National Committee on Vital and Health Statistics" would review whether non-profit health care organizations had operating rules that were "consistent with electronic standards adopted for health information technology". Another example is an “Office of the National Coordinator for Health Information Technology” will “ensure optimal use of health information technology.” This will include “standards, implementation specifications, and certification criteria” for electronic health care records. That alone could help fuel implementation of EHRs, and that can run millions per hospital, while reducing operational support costs.

There is NO DOUBT in my mind that this will also force the hands of states to use prescribed standards and protocols to receive federal funds.

While this historic legislation is highly debated, it will definitely help to reinvent an industry that has become old and inefficient. This is similar to my blog yesterday about Vivek Kundra, federal CIO pushing for cloud computing and eliminated waste and inefficiency throughout the federal government.

It seems like the Obama administration is taking IT by the horns and riding this bull to the next election.

Let me know what you think.

Sales 2.0...Phone Works, RareAgent and AA-ISP are a winning combination

Monday, March 22, 2010 by Mark Barry

Several months ago, I read the book Sales 2.0 by Anneke Seley and Brent Holloway. This is a must read for expansion stage portfolio companies who are building or redeploying their sales teams for greater bottom-line results. As a student of Sales 1.0, I found this book very useful in understanding the differences between traditional and process driven sales.

Collaborating with some of the best sales and marketing people in the software industry, Anneke Seley gained invaluable experience at Oracle Corp., which she joined in 1980 as employee No. 12. She is known for designing and building what is, perhaps, the best-performing inside sales department in the history of the software industry. Anneke started OracleDirect, Oracle’s inside sales department, in 1985 to address the need to sell newly announced, low-end products through cost-effective distribution channels. By 1988, inside sales was a 65-person, $14 million operation, yielding a 70% profit margin and generating the majority of qualified leads for the field sales force. Today, OracleDirect is a billion-dollar worldwide sales organization and one of the largest revenue-producing groups within Oracle.

In 1991, Anneke founded Phone Works, a professional services company that helps companies build high-performance inside sales teams. Today, she oversees a group of the industry’s best sales consultants who work with companies to achieve measurable, scalable, predictable results using professional inside sales teams.

Two weeks ago, I was introduced to Anneke by Marge Bieler, founder and CEO of RareAgent. RareAgent works with B2B companies providing resources, best-practices, and expertise to build and deliver calling and online marketing programs. I have known Marge for a number of years and she recently formed the Atlanta chapter of the American Association of Inside Sales Professionals (AA-ISP). I am presently working with Anneke and Marge on an upcoming seminar for venture capitalists and their portfolio companies, as well as launching the local AA-ISP chapter. See AA-ISP Atlanta Chapter Meeting for further information and to register for the first event on April 14, 2010.

Whether you are in inside sales, sales support and marketing, lead generation services, or influence marketing, I highly recommend that you visit Phone Works, RareAgent and AA-ISP for its knowledgebase of content.

Happy selling!

Federal CIO Pushes for Cloud Computing

Monday, March 22, 2010 by Mark Barry

I was reading an interesting article this morning in ComputerWorld entitled "Federal CIO calls for modernizing ancient government systems" in which Vivek Kundra, federal CIO describes how the Obama administration hopes to use IT (pursuing cloud computing) to improve public services.

For example, while recently speaking at the University of Washington, Mr. Kundra stated that its takes the U.S. Department of Veterans Affairs 160 days to process benefits because it's passing manila folders from one desk to another. In another example, the U.S. Patent and Trademark Office takes three years to process a patent, in part because it "receives these applications online, prints them out, and then someone manually rekeys the information into an antiquated system," Kundra said.

According to J. Nicholas Hoover of InformationWeek, Mr. Kundra has launched a formal process to dig deep into at-risk and failing IT projects in the federal government, and those that come out on the wrong side of analysis could end up on the chopping block.

In order to address these inefficiencies, Mr. Kundra is looking to the private sector for cues on how to do a better job with IT.

The federal government is the world's biggest spender on IT — the 2011 budget calls for $79 billion worth — and Kundra has pledged to ask tech companies not just for bids but ideas on how to improve and update its operations.

According to Brier Dudley of the Seattle Times, Kundra, 35, has worked to bring federal data and IT programs online, solicited public input with Web systems and encouraged agencies to consolidate and share resources such as data centers. Kundra cited consumer Web technologies such as the Open Table reservation service, United Airlines' online reservations and YouTube as inspiration for the sort of convenience and accessibility he'd like to see offered by the federal government.

In an effort to make government data more accessible, it's developing web sites such as USASpending.gov and creating open APIs for government systems that would allow independent developers to create useful applications for citizens, similar to iPhone applications.

In addition, several agencies internally are turning to cloud computing to include the U.S. General Services Administration's usa.gov and apps.gov. Even Japan's Ministry of Internal Affairs and Communications announced that all government agencies will shift into a private cloud environment by 2015.

As an expansion stage venture capital fund, we are bullish about investing in the cloud compute and services sectors, while delivering great returns for our growth equity partners. Come visit us here.

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