Every Company is now a Tech Company (and What That Means for You)
Perhaps you missed this week’s announcement – “GE Plans App Store.” That’s right, old-line, industrial goods manufacturer General Electric will now be selling software applications written internally, by independent developers and even by competitors. The announcement confirms that over the next few years most non-IT manufacturers will introduce some form of software – to help sell, install, monitor, control, optimize or upgrade formerly standalone products.
This software is part of the broader Internet of Things (IoT) trend. Somewhat dismissed as an over-hyped fad, IoT has actually been a long-time in the making. Building automation companies like Honeywell and Johnson Controls have been selling smart building solutions for years. Companies like Invensys, Siemens and Rockwell have been selling factory automation systems for a similarly long time. IoT extends the reach of these networks into more devices, using open protocols and lower cost networks.
If you are a marketing or sales executive at an industrial, commercial or construction products company the software/IoT trend presents decidedly new challenges:
- Software cuts to the heart of your customers’ business operations. The good news – you will get more frequent customer contact and access to more senior level decision-makers. The bad news – your sales channel is ill-prepared to handle this responsibility.
- Networked software will provide a steady stream of data about customer operations, behaviors and needs. Again, that’s good news, but the bad news is that your company and its sales channels have very limited experience or processes for accessing, organizing, analyzing, securing or sharing that data.
- Successful sales of networked software requires a broader, less-formal “ecosystem” approach to selling, rather than the structured, hierarchical channel arrangements with which your company is familiar.
- Software is increasingly “rented” on a subscription basis with frequent, on-going feature upgrades rather than “sold” with big, new releases every couple of years. This will tax your marketing department and sales channels that are more comfortable with longer new product introduction cycles.
- In the software world your competitors can also be your suppliers, customers, partners and influencers. Your company will have to get over the traditional “us vs. them” mentality.
- Many of your “resellers” will need to become “integrators” to survive. Many won’t make the transition.
To succeed in this brave new world strategy, marketing and sales professionals must rethink their go-to-market strategies. Channel training is clearly one key component of a successful strategy here. Other elements include recruiting of new types of channel partners, taking the customer pulse more frequently, creating new channel conflict management tactics, hiring of more software architects and developers, restructuring traditional channel programs and economics, and re-thinking the customer service role.
If you believe in the apocryphal Chinese curse, “May you live in interesting times;" I think we’re there.
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