Low Cost Innovation Confuses Buyers With Excess Choices
As a Web Strategist, you seek to balance the three spheres of business, technology and community. Perhaps a challenging one is the ‘technology’ sphere as you’re faced with the decision of build vs buy, specialized vs broad, cheap vs expensive. The choices are staggering –there are over 100 community platform vendors, thousands of Facebook developers, iPhone apps, and Twitter apps being created each year. Despite the proliferation of innovation, one thing remains constant: the economics and strategy of buying doesn’t change. As a result, the web strategist must first understand their strategy, develop the right parameters for buying and recognize the strengths –and weakness of each type of partner.
First, Buyers Must Understand Their Level of Sophistication
Companies that purchase technology and services must first recognize where they are in the sophistication curve. Those who are new to social technologies should seek out strategy and education first, and rely on external experience and expertise to deter risk. Those that are in mid level should focus in on specific needs –forgoing unneeded services and features. Expert level companies are thinking of a holistic experience for customers and are focused on scalability, interoperability, and integration. In many cases, these expert level companies may be focused on building their own tools and resources –rather than relying completely on third parties.
For Growth, Focused Vendors Go Broad
Interestingly enough, some companies with rich histories in a particular vertical are also expanding to larger markets by rebranding efforts. Take for example 10 year old Neighborhood America, a community platform with strong background in government, local, and federal agencies as a vertical as recently rebranded as INgage networks –giving them a broader reach to the enterprise space and international space –-read their FAQ and watch their video to learn more.
As Market Matures, Vendors Become Specialized
Radian 6, Visible Technologies, Nielsen Buzzmetrics, and TNS Cymfony have all broad reach across multiple industries by being fairly agnostic to any particular vertical. Of course, they each have experiences in particular verticals and likely have a majority of clients in one industry over another, but that’s a contrary position to Revinate, a company I recently met with that focuses in on deep integration with the hospitality industry. Their listening platform, while it doesn’t go as wide to cover the ‘brand scope’ comes pre-rigged with connections to travel rating sites like Tripadvisor, Yelp, and other consumer rating sites.
Note that no vendor is perfect, and if they can do it all, you won’t need all their offerings, and their price point will be high, as a result, understand the strengths –and weaknesses of all.
Social Technology Buyers Matrix: Broad vs Specialized vs Do It Yourself
|What it is||Examples||Benefits||Downsides|
|Broad||Technology or service vendors that serve a variety of industries without a specific focus,||Buzzmetrics, Radian 6, Visible Technologies, Cymfony offer a range of services that can be use with any variety of industries. On the community platform side, Jive, Telligent, Mzinga, Awareness, Liveworld* Lithium* (update) can meet the needs of many enterprises.||Wide deployment ensures that the scope can spread to a large set of sites to crawl. In most cases, these companies can scale, and have a broad base of clients to learn from.||Configuration and specialization for your particular market may require setup costs and configuration efforts. While features may go wide –not all will be needed for your specific customer socialgraphic behaviors and industry usage.|
|Specialized||Technology or service vendors that offer vertical (or industry) specific skills, honed in on a unique market need.||In the brand monitoring space, Revinate offers specific brand monitoring for the hospitality industry, and Kickapps*, Pluck, and Cisco EOS*, offer solutions for the media vertical and recently rebranded INgage networks has long history of serving Government –although they are moving to the broad category.||Faster deployment and features and deployments are pre-customized for deployment. Experienced teams that truly get the nuances of your particular industry.||Vendors may not be able to go broader, feature set may become limited when it comes to scaling. Sometimes specialization increases costs of goods and services.|
|Do It Yourself (DIY)||Rather than rely on vendors, many companies prefer to build their own social media tools and processes and integrate with legacy CMS and WMS systems.||A variety of brands have bolted on social features to their corporate website using BBS systems, WordPress, or Drupal like platforms with extensive customization. Or, developers that build custom installations on .net, jsp, php, and other software languages and frameworks.||Reduced up front cost and custom tailored integration with existing systems. A controlled environment not dependent on the product roadmaps of other SaaS companies and increased security measures.||Constant rejiggering of features as the outside technology space innovates quickly. Often the soft costs and internal maintaince isn’t always accounted for up front, and innovating new features are often not native to corporations.|
* The Altimeter Group takes pride in transparency and openness in research and analysis, as a result, the starred companies are currently clients, read our disclosure page.
Web Strategists Must Plan For the Long Term
Regardless of which path you choose from Broad, Specialized or DIY, there are a few baseline considerations the web strategist must factor into their long term planning, they include:
- Deploy systems that are designed to scale. Buyers must demand access to the product roadmap and understand where the company is headed at least in their 2 year plan. The benefits of a SaaS technology vendor is that you can quickly scale your deployment on a turn key basis, while on premise has it’s upsides for conservative industries –scaling can quickly become an issue and out-the-door fast deployment.
- Deploy systems that can integrate. Only buy systems that have protocols that can allow data to be accessed by other parties, and put into terms of service your data can be accessed at any given time, no questions asked.
- Analyze their partnership and alliance relationships. Selecting a company that has a healthy set of partnerships and alliances will ensure that they your company will fit within the heterogenous ecosystem of the social web. Yet, probe deeper, during initial sales calls, vendors will flash ‘Nascar slides’ with dozens of logos of partnerships, find out how many relationships are truly deep integration and aligned product roadmaps –not just former one-off projects.
Although this post is buyer focused, technology vendors with a broad focus should start kindling relationships with channel partners that can resell and focus in on specific marketers. For example, Radian 6 is known for offering its service to PR and digital agencies who can then focus in on specific markets.
Above: Roderick, a designer, has created this handy print out after I posted, thanks.