There is an excellent post by Paul McLlelan Crushing fixed costs that describes very elegantly semiconductor economics as it relates to operating and capital costs of doing business.  He notes that…

“There is a trend that the current downturn is only going to accelerate: to turn fixed costs into variable costs. Often this is what is behind outsourcing of some capability.”

While the main thrust of the discussion was driving the conclusion that semiconductor design outsourcing will accelerate, I would look in a different direction for greater savings - the data centers within semiconductor vendors.  This actually ties together a perhaps unintentional thread of Paul’s.  He discusses Amazon and Cloud Computing as an example of a trend to increase capital efficiencies in other industries.

On this blog I have argued that these two threads should be combined.  Specifically, in a gradual move of “well-matched” parts of the EDA flow to a SaaS (Software-as-a-Service) model, semiconductor vendors are able to take a very large capital expense and turn it into a pay-as-you-use operational expense.  This will enable companies to redeploy savings to functions that drive forward their value proposition and differentiation.  ie more designers designing better chips faster.

Back in the 90’s there was the start of the move to the “Fabless” Semiconductor company (that was ridiculed in the 80’s and up until Broadcom started showing success).  Using this current economic environment as a catalyst, I predict that in the next decade we’ll see a move to the “CAD-less” semiconductor company. 

Intel Data Center Utilization and Growth

As an illustration of the imperative, the above chart was presented by Intel at the Intel Developer’s Conference a while back.  It has been calculated that the Net Present Value of this data center is somewhere between $200 million and $300 million.

The move to the cloud will not be a step function, as the hurdles are many, but a gradual transition.  And just as Broadcom showed the way in the 90’s, the company to best take advantage of the opportunity may not be one of the current leaders in the industry.  Someone from the middle of the pack or a cash-strapped startup could use this new business structure as a competitive advantage to take the lead.

For those companies looking to discuss how Xuropa can help facilitate this transition, please contact me.

Posted under Xuropa, business, industry

I’ve been writing a lot about Twitter recently, as have a lot of other people as it continues to charge into the mainstream.  Read What is Twitter, and Why Should I Care? and you’ll get an idea of where this is going, but we have some recent data collected by The Nielsen Company that talks to its increasing relevance as a communication channel:

It’s growth in terms of users is astronomical:

Fastest Growing Community in February 2009

As Nielsen note, this growth does not take into account the number of mobile users, which could increase these stats incredibly.  Twitter’s use-model lends itself to mobile use perfectly, and is a very valid platform.

There is one piece of this story that I’d disagree with though: the title, “Twitter’s Sweet Smell of Success“.  While Twitter has raised an impressive $55M since its founding, it has yet to find a business model.  I’m sure there’s one out there, and it does not have to be solely ad-driven.  But until they have found the secret sauce to generating revenues, the sweet smell of success is still only appreciated by its users.

Posted under industry, marketing

Searching through Twitter I came across an intriguing post by Josh Bernoff (Forrester Analyst, author, and blogger).  New research: B2B buyers have very high social participation.

I think that we’re past the point now where people deny the importance of the web in the selling process, but for those still in doubt you have to read these statistics.

Social Technographics of Technology Decision Makers

Some statistical highlights:

So, the bottom line - if you want to engage the decision makers in your target customers you need to be using social media.

There are different platforms and tools for different purposes.  Your challenge is to build marketing processes around these platforms and leverage the tools available:

1. Xuropa: it’s the only online community dedicated to electronic design.  Professionals, products, companies, news, and the tools to build your own community within Xuropa.
   - Register your products so decision makers can find them.
   - Ask your existing customers to write quick reviews or rate your products - this is important to help prospects find you and immediately get a valid and objective opinion of your product.
   - If you really want to engage your customers, provide an Online Lab where they can try the products out for themselves!
2. LinkedIn: participating in groups would be useful, but this is mostly used by people looking for jobs or contract work.  I don’t see too much product or technology disussion here.
3. FaceBook: A social network ostensibly.  Not much in the way of serious technology discussion that I’ve seen.  However, still an opportunity to engage.
4. Blog: You need to be positioning your company and products within the context of your customers.  Answer questions that they would ask, like “why would I use this technology?”, and “what problem does this technology solve”.  Don’t come at your blog from a marketing pitch perspective.  That won’t help you from an engagement or an SEO perspective.
5. Twitter: That is an “interesting” way to engage that I’m still trying to get the handle of myself.  It has helped me a number of times, but it’s a tough thing to systemize currently given the limitations of the tools available.

It’s not too late to get started…but you have to get started!  Now!

Posted under Features, Xuropa, industry, marketing

It’s been said in various places that marketing has to move on from the “fire and forget” methods of a previous era.  The tools exist and the methods have been proven out to show that “marketing 2.0″ (active and ongoing engagement) works, and the effectiveness of marketing 1.0 alone strategies (press releases, trade shows, direct marketing, etc.) are losing their effectiveness.

A “fire-and-forget” method that was showing improvement in recent years has also been hit by the recession - online advertising.

According to the March 2009 Advertiser Optimism Report by Advertiser Perceptions, the number of marketers and their ad agents that are feeling optimistic about increasing their online ad spending has dropped 16%.

Beyond merely a reduction in budgets, hopefully this means that economic realities are forcing marketing teams to get more creative and learn new techniques and tools to engage their audiences.  This change, if prolonged, could have an impact on web business models as well.

Those sites that are reliant on ad spending for their revenues will start to feel the pinch.  Could this be the beginning of a reduction in the amount of quality content that’s available for free on the web?  That remains to be seen, but investors have been pushing web platforms and entrepreneurs away from ad supported business models for some time.

Posted under industry, marketing

In 199_ (and I’m not mentioning which year) I got my first product marketing job.  It was all I wanted to do after I got my MBA — I wanted to drive the definition and completion of products.  I was coming in from an applications (sales) engineering position right into product marketing, which I thought would give me a good view on what customers needed and what the product had to look like — and it did.  I started right away defining a feature list, prioritizing them, cost-analyzing them, getting customer feedback, drive the schedules, etc.  I quickly found out that product marketing is a thankless job: there are too many people to make happy (customers, R&D, sales, executives, partners, etc.) and there’s no way to make them all happy; and you’re constantly trying to connect all of the dots and pick up the loose ends.

During my first months of product marketing, one of the company’s more experienced marketers, pulled me aside, as he was leaving the company, and told me not to sweat the “small stuff” like features, etc. and instead focus my thoughts and work around positioning and the overall vision of how the product is changing the industry.  That “lecture” didn’t make any sense at all!  I had a lot of respect for him, so I did take note of what he said, but it really didn’t change the way I went about product marketing at the time.

As a few years have passed by and I moved up through the ranks and eventually became a  executive, his comments began to make more and more sense.  In fact, I have come to the conclusion than feature-driven product marketing only sets your product for long-term failure.  It makes you focus on incremental change.  It is very surprising that a lot of my colleagues and consultant, and some that I have the ultimate respect for (example), still predominantly push a feature-driven approach to marketing.  I do realize that pitching a feature-driven approach works much better with less experienced CEOs and it is a better “consulting sell”, but I’m not convinced if it’s what really creates differentiation for their client companies.  I’d go back to what my old colleague told me — product marketing provides a lot more value if focused on the overall positioning (i.e. how differently the product is solving the customer problem) and the long term vision of how it’s bringing non-incremental value to the customer (technically and financially).

One way to drive this point is to highlight that if someone in the car industry polled customers in 1900’s about how a car should look like, the customers would have all said they’d want a carriage with a horse that eats less and “defecates” less!

Posted under business, industry, marketing

It will be interesting to see what the corporate landscape will look like when we get to the other side of the recession.  According to a report by The McKinsey Quarterly, it will be quite different to how it looks now.

“[After analyzing] nearly 700 high-tech companies during contractions in markets around the world over the past two decades. [They] found that the turmoil accompanying downturns significantly reconfigures the high-tech landscape. About half of the companies that entered these downturns as leaders—the top 20 percent—ended up as laggards when the economy regained momentum.”

There are many ways that this could come about of course, some are:

1. The leaders were slow to react to changing economic pressures and costs dragged them down
2. The leaders saved cash and did not invest in technology to keep up with market demands
3. Entrants or non-leaders innovated around the leaders with a business model that the downturn actually strengthened

Of course, “business model” is not limited to “pricing” or “cost structure”.  It could include the channel, licensing model, support structure, etc.  Everything that goes towards how a company makes and uses money.

In a software-based industry, there is a great deal of opportunity in #3.  And if you’re interested in discussing how Xuropa can help your company take advantage of the environment, please drop me a line via Twitter (sfojames), LinkedIn, or Xuropa.

Posted under Xuropa, business, industry

Great - another acronym.  As twitter grows I expect more of these to come along.  Anyway, I saw it this morning on Harry Gries’ blog, and it stands for “Yet Another Social Network”.

Harry painstakingly gathered tweets from a thread and tied them all together into an interesting conversation.  You would not have got this conversation if you a) had not been “following” every member of the conversation and b) not been on Twitter at the exact time it was going on.  So, thanks Harry!

I put a pretty long comment on Harry’s blog, but there’s a point I’d like to emphasize.

JL Gray was wondering if “we” needed another social network when it came to Xuropa.  Of course, my answer to that is - he’s right, we need a professional network.  At the same time he was making that comment he added that using Cadence tools on Xuropa was “cool”.  And that’s the whole point - using the actual Cadence tools with no downloads, plug-ins, or license agreements is very cool.  But more to the point - it’s useful.  Xuropa is about providing a community that is useful and specific to your career and work.

Within a Xuropa Online Lab you can use the tools and ask questions of the tool’s application engineer directly; read the manual, or watch a video about how to use the tool.  At the same time, if you want to twitter about it, great!  Write a blog post, wonderful! Write about it on someone’s “wall”, knock yourself out!  Each of these social networks has its purpose and focus (or not).

Here’s a video introduction to one of the Cadence MIPI Labs on Xuropa:

This is what Xuropa is about.  Connecting engineers with technology.  The rest is up to you.

Posted under Community, Features, Xuropa, industry, marketing

A new report published by Nielsen describes some incredible statistics related to the growth of Social Networks (or Member Communities) on the internet: Global Faces and Networked Places.

• Two-thirds of the world’s Internet population visit a social network or blogging site
• This sector accounts for nearly 10% of all internet time
• This sector ranks higher than email as fourth most popular online sector (see below)

Ranking of Internet Sector Reach

This probably reaffirms anecdotal evidence of older demographics newly discussing their “Facebook page”.  However, what is not as widely understood is the headway that has been made in terms of time.

“The staggering increase in the amount of time people are spending on these sites is changing the way people spend their time online and has ramifications for how people behave, share and interact within their normal daily lives.”   

 

Percentage of Internet Time Spent in Member Communities

Another interesting way to think of this increase in terms of internet “mindshare”:

“A year ago ‘Member Communities’ accounted for one in every 15 online minutes globally – now it accounts for one in every 11.” 

 

But it gets more interesting, and more relevant to electronic design.  Common wisdom within the industr is that the senior demographics do not participate in online member communities.  Times are a-changin’ - the highest level of growth is in the three demographic ranges from 35 years old and up beyond 64.

While anecdotal evidence points to an increased desire of these demographics to access the photographs and videos of younger relatives, that’s not the point.  As with all of these web 2.0 phenomena, consumer adoption and growth will drive corporate adoption as users become familiar with use models and more comfortable with the degree of access.

So, does this mean that every company should rush out and create a Facebook page?  I think they should consider one as part of a comprehensive internet marketing strategy.  But I would tell them that this should not be their primary online channel for two very closely related reasons.

“Much like a friendship, marketing on social networks requires continual investment – in terms of time and effort as opposed to financial – to be of value to both parties.

So, use Facebook as a signpost to your community on a Professional Community Platform - that would be Xuropa - and build your community there.  Even better, place your product at the center of your community!

Posted under Community, Xuropa, industry, marketing

Considering the number of open source tools available to create the basics of an online community site, it is tempting to go this route to leverage the ubiquity of the web.  Indeed, a couple of companies within electronic design have done this.  However, there are some fundamental reasons why this is a very bad idea and ultimately won’t work.

It’s only when you get into the web and community building business that you understand that there are two key elements to the process:

• Building the platform (software)
• Building the community (people)

It is easy to think that installing the software and configuring it is the hardest part.  This is the “build it and they will come” mentality.  Dead wrong.  If it’s on your own website there’s a great deal of work and maintenance required.  If it’s on an unrelated platform, you’ve just made your job harder for yourself.

If you’re a budget constrained organization take a look at the amount of effort and length of time it took John Cooley to build his audience (it’s not really a “community”).  A heck of a lot of guerilla marketing to get on everybody’s radar (and I would not want to maintain that site).  Or take Janick Bergeron’s Verification Guild.  It’s a relatively more modern web platform that allows interaction, but it has taken him years to build that community.

The problem is, you’re on your own.  Without some heavy duty marketing, how are you going to cut through the noise of the web?  It’s not the tool you use, but the fundamental marketing principles and effort behind the way you use the tool.

You on your own

There is another way  - to build your community within a group of communities with a point of commonality.  This way, there is a resonance from those around you that amplifies your efforts to build your own specific community.

So, for electronic design, you want to be building your community within a larger online electronic design community…this is Xuropa.

Your community on Xuropa

Building an online community is an on-going effort.  It needs to be fed and watered over time - daily.  This is hard to do when you’re a resource limited company.  But if you’re in amongst a number of other communities with a similar background, their efforts will help yours.  Leverage.

Of course, in addition to community functionality, you can have your software product at the heart of your community in an Online Lab.  That’s something that no other solution out there can provide.

So, please don’t waste your time, effort and money because the software’s “easy” to install and free.  You’re just taking a technical short cut that will make the whole process harder and the likelihood that you’ll achieve your objectives little to none.

Posted under Features, Xuropa, industry, marketing

My blog post about “What is Twitter, and Why Should I Care?” had not been up more than a few hours when the Twitter stream offered up this perspective from John Stewart of the Daily Show.

As usual, it’s hilarious, made funnier by the more-than-grain of truth to it.  The clip highlights the extremes of the Twitter spectrum.  Of course, the reality lies somewhere in between.

Twitter can (and is) used for banalities.  And Twittering while attending an important speech broadcast simultaneously worldwide says more about the Twit(terer) than anything else.

Mass communication tools, like email or SMS, can be used for spam.  But, that does not mean that they don’t have their place and their appropriate business use models.

Some basic professional uses:

• Product announcements (linking to a demonstration or blog post)
• Instant polls
• A low-cost help-line
• Focus groups
• Event announcements and simple coordination
• Build and simply engage your users
• Live streaming (of something that is NOT broadcast worldwide!)
• Event (seminar, presentation) question submission (can be very effective)

How have you used Twitter professionally?

Posted under industry, marketing