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Elevating from Consumer to Mission Critical ValueBrian CoxSr. Director of Marketing, SanDisk Enterprise Storage Solutions
Silicon Valley Product Management Association
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Forward-Looking Statements
During our meeting today we may make forward-looking statements.
Any statement that refers to expectations, projections or other characterizations of future events or circumstances is a forward-looking statement, including those relating to market position, market growth, product sales, industry trends, supply chain, future memory technology, production capacity, production costs, technology transitions and future products. This presentation contains information from third parties, which reflect their projections as of the date of issuance.
Actual results may differ materially from those expressed in these forward-looking statements due to factors detailed under the caption “Risk Factors” and elsewhere in the documents we file from time to time with the SEC, including our annual and quarterly reports.
We undertake no obligation to update these forward-looking statements, which speak only as of the date hereof.
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Life Examples Elevating to Critical Value
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A Number of Companies Have Been Successful
CONSUMER MISSION CRITICAL
Intel
Microsoft
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A Number of Companies Have Struggled
CONSUMER MISSION CRITICAL
Sony
Nokia
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A Number of Companies Are Aspiring
CONSUMER MISSION CRITICAL
Dropbox
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Dropbox’s Enterprise Shift is the Hardest Thing It’s Ever Done
http://venturebeat.com/2013/08/13/dropbox-the-enterprise/
—VentureBeat August 13, 2013
“ Dropbox wants to take over the enterprise, but one thing stands in its way: Dropbox itself.”
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Given that SanDisk has a very strong brand in Consumer products, how can this be extended to Enterprise IT?
A Global Brand Leader in Consumer Flash Storage Solutions
NPD Estimate, Nov., ‘13. Estimates of the memory card & USB markets from NPD (Nov. ‘13) and GfK Retail and Technology, Sep., ‘13.
All Leading Smartphone & Tablet Manufacturers use SanDisk
SanDisk Client SSDs Used by All Leading PC Manufacturers
Retail: The Leading Brand of Flash in Key Markets
#1 Global Retail Revenue Share
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Index of Percent Definitely Would Consider/Definitely Would Buy
Comp Set Avg
Western Digital
Toshiba
Seagate
Hitachi
Fusion IO
SanDisk
94
109
115
130
66
51
156
Index of Percent Definitely Would Consider
Flash/SSD’s and Buying Intentions Quadrant
0 20 40 60 80 100 120 140 160 180 200 220 2400
20
40
60
80
100
120
140
160
180
200
220
240
Comp Set Avg
SanDisk
Fusion IO
Hitachi
SeagateToshiba
Western Digital
Comp Set Avg. Definitely Would Consider
Com
p Se
t Avg
. Defi
nite
ly W
ould
Buy
Tech Buyer Intelligence Reports | Spring 2013, Wave Two
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Lower prices afford little or no individual customer nurturing
High prices with extensive nurturing and long sales cycle
Keys to Success in Consumer versus Mission Critical
MISSION CRITICAL ENTERPRISECONSUMER
Source: http://svpg.com/moving-from-enterprise-to-consumer/
• Nearly All about the Product (and scale)
• Supported by online marketing• Must be intuitively easy
• As much about the Sales organization as the Product
• Supported by Field Engineers • Product requires training and
integration with existing gear
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Requires convincing the End User Requires convincing multiple stakeholders
Managing the Buyer Personas
MISSION CRITICAL ENTERPRISECONSUMER
http://www.mindtheproduct.com/2013/02/consumer-vs-enterprise-product-management/
• End User driven
• Influenced by advertising and possibly consumer sites
• Purchasing Department driven, but influenced by End User stakeholders
• Influenced by Sales Reps, industry studies and community of experts
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Do It Right: Go Back to the Basics
WHO HOW WHERE
WHY WHAT WHEN
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Enterprise Customer Mix Is Changing!HDD and SSD TBs Shipped by Enterprise Consumption Categories
Source: IDC “New and Growing Channels for Storage Industry Terabyte Shipments” Mar 2013 - Doc # 239953
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WHO are the Enterprise SSD Customers?
Enterprise Application Software Vendors: SAP, Oracle, Microsoft, VMware…
Line of Business/Function Owners: Manufacturing, Sales, Finance, HR, etc.
Traditional OEM Server & Storage Array Vendors: IBM, Dell, NetApp, etc.
Growing Web 2.0 & Cloud Computing companies: Google, Yahoo, eBay, etc.
Traditional Enterprise Data Centers: General Motors, Texaco, AAA, IRS, etc.
Dire
ct
Ind
irect
Infl
uenc
e
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HOW to Reach the Customer: Routes to Market
Building a direct to End Customer relationship is a competitive advantage• Enables SSD vendor to create and manage perceptions with the End Customer segment• Customer knowledge, support & trust are a significant barrier to new entrants• Direct, unfiltered feedback on pain points, growth areas to innovate ahead of OEMs and competition• Platform to grow business, extend into new market segments• Risks: This business model has high S&M, so must maintain higher ASP units and profit margins, moderate R&D as % of OpEx
TRADITIONAL ROUTE
EMERGING ROUTE
SSD Vendor OEM End Customer
End CustomerOEMSSD Vendor
INFLUENCE
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How to Reach the Customer:Build AwarenessAdvertising and Social Media
• Online, Print, External (billboards)• Blogs, Twitter, LinkedIn, SpiceWorks, Wikipedia, SlideShare, etc.
News Articles and Product Reviews• Tech enthusiast press (SSD Review, Tom’s Hardware, etc.)• IT Decision Maker press (Computerworld, InformationWeek, etc.)• Business press (WSJ, Bloomberg, NY Times, SF Chronicle, etc.)
Industry Analyst coverage• Gartner, IDC, Forrester, etc.
17Source: KnowIT Information System, Prof. Michael Goul, Arizona State University
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How to Determine the Level to Staff the Team
Revenue R&D $
Sales & Mktg. Headcount
Sales Headcount
Mktg. Headcount
Sales: Mktg. Ratio
Sales & Mktg. $
Sales Mktg. % of Revenue
Revenue per Salesperson
Competitor A $135 $53 62 39 23 1.7 $16 12% $3.5
Competitor B $440 $79 387 200 187 1.1 $101 23% $2.2
Competitor C $221 375 194 181 1.1 $99 45% $1.1
Competitor D $191 $66 115 66 49 1.3 $27 14% $2.9
Competitor E $503 $151 260 142 118 1.2 $72 14% $3.5 Mature / Harvest
Growth/land grab
OEM centric
Declining revenue
Industry benchmarking for staffing the Sales and Marketing effort
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Segment Sub-segment Database MemCached Virtualization Nearline Archival Workstation
Transaction (OLTP)
Analytics
HyperScale Datacenter
Web 2.0 High High High High
Cloud High High
Large Enterprise High High High
Medium Enterprise High High
Small Enterprise
Pro-sumer Medium
…
Where to Target: End User Segmentation / Focus – Go To Market
Requirements:• Dedicated business/tech sales per
major account• Dedicated support team, on par with
Tier 1 OEM
Requirements:• OEM co-marketing to scale efficiently
Requirements:• Build direct engagement, by vertical/geo
Need right product, partners, proof points, reach, sales, fulfillment, support to win in each segment
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Segment Sub-segment Database MemCached Virtualization Nearline Archival Workstation
Transaction (OLTP)
Analytics
HyperScale Datacenter
Web 2.0 High High High High
Cloud High High
Large Enterprise High High High
Medium Enterprise High High
Small Enterprise
Pro-sumer Medium
…
Where to Target: End User Segmentation / Focus – Product
Geo Vertical
Finance Media HPC Telco …
US
EMEA
China
Japan
…
Flash Usage Storage Model
Server Ext. Storage
Cache
Primary StorageWhere Marketing team will further define
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Why Do They Buy?
• OEM System Vendors• Procurement & Qualification Engineers Acquisition Cost & Specs• System Architect & Business Leaders App Performance, Reliability, TCO
• Traditional Data Centers• Data Center Managers Meeting SLAs through Performance & Uptime• Line of Business owners Meeting business objectives, IT as enabler
• Web 2.0 & Cloud Data Centers• Acquisition & Operating Cost• Acquisition & Operating Cost• Acquisition & Operating Cost
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Index of Brand Selection, Marcomm and Sales Effectiveness Criteria Regression to Likely to Buy
307
185 167139 139 123 116 113 94 91 88 75
283 270
171122 121 120 106
77 72 72 63 52
Flash/SSD’s Key Criteria That Drive Intentions—IT and Line-of-Business
IT Criteria
Line-of-Business Criteria
Product Evaluations**
White Papers** ROI* TCO* Customer Testimonials**
General Events/Conferences*
Post-Purchase Support*
3rd Party Rec.* Value* Case Studies** Ease of Doing Business*
Ease of Use*
Case Studies** Thought Leadership*
Post-Purchase Support*
Quality/Reliability/Uptime*
Industry Knowledge**
*
Product Evaluations**
Bringing in Experts***
Ease of Integration*
Support by My VAR/Reseller*
Sales Creativity***
Technical Knowledge**
*
TCO*
Sales Effectiveness
Marketing Effectiveness
Key Purchase CriteriaB BBA A
A B B B BB B
Source: Tech Buyer Intelligence Reports | Spring 2013, Wave Two
What Information do Buyers Need to Buy
Source: Silicon Valley Product Management Association| March 5, 2014 Milpitas, CA
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When to Pursue Which Customers
• Focus on a critical few solutions and locations where we can build a full value chain• Horizontal and Vertical solutions where our products demonstrate
a clear benefit• When we see a sizeable Total Addressable Market (TAM)• When the current pain point of the customers compels them to invest in adopting a
new approach• When we have established ISV certifications and partnerships• In geographic locations where partner and Sales and Field Engineers are staffed and
trained in the enterprise products, ISV solutions and the language customers use to describe their business
• Achieve success, then expand
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8 Fundamental Keys to Success
1. Ensure your CxO suite and Board of Directors are committed to the Enterprise business for the long haul and goals are aligned
You have to earn the trust of Enterprise customers – they are making 5-10 year commitments when buying and integrating your product or service into their infrastructure
Make sure everyone has a common definition of Enterprise
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8 Fundamental Keys to Success
2. Trying to grow Enterprise “DNA” internally is difficult and will take many, many years to get it right.
It is easier to import Enterprise DNA by acquiring some existing Enterprise providers or staff and setting them up to run their own operations.
Avoid the temptation to functionalize the operations out of the broader company, e.g. developing both Consumer and Enterprise software out of the same team, doing both Consumer and Enterprise sales out of the same team, etc.
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8 Fundamental Keys to Success
3. Pick a business that has an expanding customer need
e.g. Growing economic region, expanding industry, underserved market
4. Ensure you have a technology or service that is sustainably superior to the status quo or alternatives
e.g. Higher performance, more reliable/secure, better value
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8 Fundamental Keys to Success
5. In Enterprise, the Sales infrastructure is just as important as the Product. Enterprise requires a different mindset than Consumer.
Best to hire Sales talent from other proven Enterprise providers rather than trying to re-train existing Consumer Sales folks
6. Enterprise Channel and ISV Partners are a key catalyst to success
They already know the Enterprise customers and can provide a halo of credibility when they promote and certify your offering
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8 Fundamental Keys to Success
7. Cover all the right communication avenues to build awareness and influence
Gain trust with the customer’s CxO suite/Business Unit leadership and those that approve the purchase in addition to those who will actually use the product or service
There are many stakeholders in the mission critical enterprise and each has their own trusted information sources
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8 Fundamental Keys to Success
8. Focus on selected markets and build success in steps
You can’t conquer the world successfully all at once.
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To Achieve Critical Value is to Make the Right Extension
NOTTHISTHIS
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THANK YOU
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