Upstream 2.0 Platform Marketing

Part 4, Optimizing for the Age of Anybody as a Partner (XaaP)

Joseph Bentzel, Platformula1


“It is critical for the new generation of on-demand or SaaS ISVs to see this convergence of sales strategy between both Microsoft and Google (in their startup phases, JEB). A strategy based on leveraging the market clout of an incumbent leader via OEM or ‘powered by’ (web services JEB) relationships.” Asymmetric Marketing: Tossing the ‘Chasm’ in the Age of the Software Superpowers, Joseph E. Bentzel

Introduction

In Part 1 of this series, I outline how many of today’s software platform leaders (Google, Microsoft, VMware, RedHat, Adobe) did not practice downstream market disruption in their startup phase, but instead chose to partner upstream as software OEM or web services providers to the established alpha vendors, centers of gravity, and monocultures of their day—-from systems companies to leading web, e-commerce and broadband portals. And even Apple, when it launched the iPhone, did so initially via an exclusive distribution agreement with a telco partner.

In Part 2, I describe how this ‘monoculture advantaged partnering’ (MAP) approach practiced by these category leaders in their startup phase triggered a life cycle of asymmetric market dominance I call the Superpower Pattern. I used Google’s original ‘Powered By’ search services deal with Yahoo as a case study of the Superpower Pattern.

In Part 3 I unpack the Superpower Pattern to show how a single upstream partnering deal with an established alpha vendor can bestow a ‘DNA inheritance’ or market power upgrade on a startup that enables that startup to more easily attract upstream partners 2-N.

In this installment of the series, let’s take a quick look at how today’s cloud/mobile distributed application architectures provide the ideal foundation for the upstream platform marketing approach described in Parts 1–3 in what I call the age of ‘anybody as a partner’ or XaaP.

The Upstream 2.0 Platform Marketing Equation

Smart tech vendors always position their product, service or platform value proposition with an eye toward describing and owning emerging categories. That’s why you’ll see today’s cloud/mobile distributed application architectures being creatively described in various ways by different vendors (and online media serving those vendors). From the “programmable web” to the “future stack” (or “new stack”) to the “composable enterprise” to the “API economy” to “microservices” to the “3rd platform”, there is almost no end to the creative category descriptors that innovators use to frame themselves at the heart of the cloud action.

From the standpoint of upstream platform marketing—-the discipline of leveraging partners to advantage your own product adoption and growth—-I find it helpful to simplify the complexities & subtleties inherent in the “new stack” paradigm. Here’s how I reduce it to a simple equation that can help marketers focus on the importance of upstream partner marketing.

Upstream 2.0 Platform Marketing Equation: Today’s cloud/mobile architectures are driving an explosion of new XaaS (anything-as-a-service) ingredients. This open approach has laid the foundation for ‘Anybody as a Partner’ growth opportunity.

Let’s break it down.

XOA: Anything-as-a-Service (XaaS) Open Architectures

As 21st century enterprises adopt both public and private cloud computing and/or commit themselves to continuous digital re-invention—legacy SOA (service oriented architecture) and API management are converging. From where I sit as an upstream marketer, I call this convergence XOA or ‘anything as a service’ open architecture. XOA has incredibly positive implications for partner marketing and BizDev teams. It means that your innovative new service (or ‘microservice’) can be incorporated into an upstream partner’s XOA-based ‘new stack’ as an ingredient in their app, cloud, network, system, solution or experience. The growing popularity of new hybrid integration & PaaS offerings from Mulesoft to Snaplogic to IBM BlueMix to Apprenda—-and the adoption of API management platforms from Apigee to 3Scale to SOA Software to Mashery is testament to the rapid growth of this converged XOA landscape in both enterprise and new web and mobile businesses. Not to mention of course the exponential growth of public cloud service catalogs and add-on marketplace plug-ins.

XaaS: Anything-as-a-Service

XaaS is a holistic product marketing term I use to describe the set of all digital ingredients and/or microservices that are available for incorporation in an XOA (new stack) enterprise.

These service ingredients can run the full gamut from basic IaaS capability to high growth XaaS categories—From security-as-a-service to big data-as-a-service to user management as a service to mobile backend-as-a-service and beyond. But it’s not just about cloud infrastructure.

End-user only SaaS applications are increasingly being “XaaSified” for upstream partner adoption and made available via an API-as-a-Product model, an AWS Marketplace AMI, a Docker container, an OEM distro in a major corporate open source community, e.g. OpenStack or CloudFoundry, etc.

Which brings me to XaaP.

XaaP: Anybody-as-a-Partner

When you multiply the mainstreaming of XOA times the ever-growing number of XaaS ingredients, the Upstream 2.0 Platform Marketing opportunity begins to come into focus. XOA times XaaS means that literally, anybody—-any major IaaS vendor—-any major IoT vendor—-any leading SaaS or mobile app vendor—-any enterprise undergoing digital transformation and ‘externalizing’ their internal IP and apps to new customers and partners—-can become your upstream partner and drive growth for your company—-And do so at a much lower cost of sales/marketing than a direct downstream model.

In the Age of Anybody-as-a-Partner (XaaP), Developer Marketing Can Be Optimized with ‘BizDevOps’.

When one acknowledges the anybody-as-a-partner opportunity, the question of how to engage it is raised. One popular point of view sees it as basically a developer marketing or developer evangelism issue. In my experience this is only half true—-and if followed will leave money on the table for your product.

Why? Because while developer self-service is a powerful trend and anybody can become your upstream partner—-there is still the issue of segmenting and prioritizing those partners from the standpoint of ‘product/partner fit’, monetization, time-to-market, resource allocation, and future ‘DNA inheritance’—That is, who should be your upstream partners in the near term in order to optimize your growth and future dominance.

At a high level, one way to approach segmentation of upstream partners is to think of them as large sets of unknown developers’ (LSUD) and small sets of known developers’ (SSKD). This pragmatic approach has been well articulated by Daniel Jacobson, VP of Netflix Edge Engineering (API & playback). In discussing the popular API-as-a-product form of XaaS, he calls this segmentation approach ‘separation of concerns’.

Jacobson’s ‘separation of concerns’ concept can be adapted and applied by upstream platform marketers as a way to describe the go-to-market differences between ‘one size fits all’ developer evangelism and alpha partner focused ‘BizDevOps’—-i.e. the converged team model that supports the kind of outbound business development needed to attract and close alpha partners.

The graphic below illustrates these two distinct patterns of upstream partner engagement in the age of anybody as a partner (XaaP).

Upstream 2.0 Platform Marketing is about partnering with ‘Small Sets of Known Developers’ (SSKD) vs ‘Large Sets of Unknown Developers’ (LSUD) in order to access pre-existing networks of customers and ecosystem participants. It’s about capitalizing on incumbent monocultures to drive growth for your XaaS startup.

Pattern One: Long Tail Developer Marketing

In this pattern (please see the right side of the figure starting at the bottom), XaaS innovators engage the market with a ‘one size fits all’ offering via developer evangelism and developer marketing.

They typically leverage the power of developer self-service and DevOps—focusing on developer convenience and developer communities to drive adoption by ‘large sets of unknown developers’ (LSUD). They regularly host hackathons (award-based developer events) to attract developers to their offering.

In developer-led startups, future upstream partner monetization is often a secondary consideration in this approach—or at best takes a back seat. Often the goal is simply to drive adoption for adoption’s sake with an eye on convincing one or more VCs to invest in your startup.

Pattern Two: Upstream 2.0 Platform Marketing

In this pattern (on the left side of the figure) the XaaS innovator begins connecting the organizational dots between DevOps and BizDevOps. BizDevOps is a term I use to describe the platform marketing role that owns responsibility for understanding potential alpha partner agendas—-those “small sets of known developers” (SSKD) that have an existing installed base of customers, an in-place developer ecosystem, and an established sales channel (direct or indirect or both).

BizDevOps supports your outbound partner sales ‘boots on the ground’ so they can be more productive in the field. The value added by a BizDevOps role lies in the ability to analyze the gaps in current alpha partner products, product families, business models etc. so you can properly position and monetize your XaaS offering as a critical ingredient in their roadmap. BizDevOps also enables you to segment your upstream partner engagement by monetization potential and optimize it for your future ‘alpha partner DNA inheritance’, making it much easier for you to attract new partners.

By drawing this comparison, am I arguing not to do long tail developer marketing? Not at all. It’s a mainstream function in any XaaS company that wants their digital ingredient integrated inside a partner app, cloud, network, system, solution or experience.

What I’m saying is that developer evangelism is not a silo—-And you can and should optimize your developer evangelism by applying upstream 2.0 platform marketing best practices to the specific challenge of your category or emerging category.

Three Takeaways

1. Get Serious About BizDevOps

Unlike downstream ‘markets of 1', upstream markets are not just about consumer profiles or fuzzy user personas. They are about intense landscape rivalry—-between and among incumbent centers of market gravity—-and how you can profit from it. One proven way to profit from it is to partner with the alpha vendors that dominate these centers of market gravity and symbiotically close gaps in their offerings (and product families) exposed by this landscape rivalry, e.g. the current cloud wars. It’s been my experience that the best way to do this is to closely integrate your developer evangelist(s) with your outbound partner marketing assets in a BizDevOps team model. Why? Because by the time you identify these upstream partnering opportunities via your inbound marketing programs, it may be too late to capitalize on them. Somebody else got their first.

2. An ‘MVP’ is Not Enough to Win Upstream

To win upstream, it’s going take more than an “MVP”. Minimum viable products consistently don’t cut it with upstream alpha partners who serve large installed customer bases and established ecosystems. In practice the MVP model has baked into it the notion of using early downstream customers as the equivalent of marketing ‘crash test dummies’. What you need to win is a partner viable product (PVP) that can pass the more rigorous upstream partner adoption test demanded by alpha players. BizDevOps can be an important stakeholder in providing the ‘human intelligence’ (HUMINT) needed for a PVP-centric product process.

3. Platform, Good. Platformula, Better.

‘Kick the can down the road’ business model development won’t work in upstream markets. You’re building a XaaS platform company and you’ve made the investment in a developer self-service portal and developer evangelism. Now it’s time to effectively and profitably monetize your developer investment by supercharging your upstream outreach with a rich platformula.

A platformula is about designing in the right partner monetization and partner incentives that will make distribution relationships as sticky as possible and preempt your competitors.

For a deeper dive on Upstream 2.0 BizDevOps in the age of anybody-as-a-partner (XaaP), ask about Upstream/Focus, Platformula1 crash course for XaaS startups.

Joseph Bentzel is the senior consultant at Platformula1and the author of “Asymmetric Marketing: Tossing the ‘Chasm’ in the Age of the Software Superpowers” available on Amazon.com. You can reach him at joe@platformulagroup.com.