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Article

The 4th C - How the Cloud Changes Everything in B2B Marketing

How marketers must re-evaluate their entire strategy

"The Cloud Changes Everything" is heard so often that it is a cliché. But then again, distributed energy production and transmission enabled our 20th century manufacturing revolution and the interstate highway systems changed our society. Those of us who practice B2B technology marketing are living in the most interesting time of our careers. Not only is social media changing our communications channels faster than our ability to manage them, but cloud economics and delivery is changing our products and our customers. In order to thrive and succeed in cloudy times, we must be disciplined and innovative, focused yet adaptable, agile and efficient. No easy task. We must re-invent every aspect of our marketing mix, from our very notion of our product, to pricing and promotion, to our channels, understanding of our customer and view of our competition. So now, instead of 3C and 4Ps, I officially anoint the Cloud as the 4th C of B2B tech marketing.

Let's take a quick rundown of how the cloud changes our marketing mix:

Products Become Services
When your product becomes a service, everything you know about release cycles, quality measures and customer satisfaction changes. Products are judged on what and how well they deliver, not on future vision or roadmap.

Pricing Becomes Value Driven
Cost plus pricing doesn't mean anything to a buyer who can outsource smaller and smaller pieces of applications or virtual infrastructure. Buyers want pricing that is directly related to value, not in the future, but what is delivered today.

Promotion Becomes Experience
Freemium, try and buy, social media referral, instant access, ecosystem integration, online demos and other experiential means replaces PowerPoint, datasheets and whitepapers in every product category. Why evaluate on paper when you can try? Activity that doesn't drive trial is wasted energy and money.

Place: Channels Are Destroyed and Created
Traditional channels are quickly being usurped and replaced. Sales' role is transformed as marketing takes prospects further into the sales cycle. Service providers are the new channel; sell to them or through them. New ecosystems emerge and thrive, such as the Salesforce AppExchange and the iStore.

Companies Are Transformed
From the role of sales and marketing, to the revenue model, the capital requirements and the engineering processes, nothing is the same. Managing this transformation is essential for success for existing providers, and a key competitive edge for new entries to exploit.

Customer Segments and Behavior Change
Buyers and buying shift as IT technology managers become business services managers and business users can trial and even buy products without IT involvement. Service providers, both external and internal, drive purchase behavior in more advanced organizations.

Competition Comes From Anywhere and Everywhere
The world's largest bookseller becomes the world's largest on-demand infrastructure provider. Online document sharing sites come out of nowhere to gain share. Companies are built and capitalized on the heels of online marketplaces. Your competition moves fast and comes from unexpected places.

More Stories By Ken Rutsky

Ken Rutsky is a Product and Service Marketing Consultant, and has spent 20+ years in the industry, launching his first Internet services while at Netscape from 1995-99. Since then, he has been CMO at several start-ups and ran Network Security Marketing at McAfee. Ken launched McAfee's Secure Web Protection Service, and his time as a consultant has included the launch of Nimsoft's Nimsoft On Demand service. Today, he is laser-focused on helping ISVs and start-ups understand how to bridge from the world of products to SaaS Services with their mindset, organization and go-to-market tactics. Follow him on Twitter @jayrutz, on Linkedin at http://www.linkedin.com/in/kenrutsky, and on Facebook at http://www.facebook.com/home.php#!/pages/KJR-Associates/224894750772.