The tech market today is full of start-ups coming up with great, innovative solutions that are getting hundreds of millions of dollars in funding — and rightly so. What this appears to have led to, is the idea of innovation becoming somewhat synonymous with start-ups. The bigger, more established companies have begun to sit up and take notice of this.
Think about Microsoft announcing at the start of the year that it would continue to invest $1bn per annum in cybersecurity, or Cisco investing $1.4bn into Internet of Things last year. The heavyweights are beginning to take up a start-up-like mentality to try to push forward in areas of emerging technology, in an effort to challenge the innovation that we’re now so used to seeing from start-ups. The trend that has become apparent is that these larger companies are beginning to play catch-up in areas that they’re not particularly well known for — and that is one of the biggest problems for them.
In attempting to keep pace with the innovative start-ups in the tech market, we’re seeing lots of small divisions and departments sprout within the larger companies. Working on emerging technology for their solutions, these smaller departments are very much like start-ups in the way they operate and the difficulties that they face. They have expected results that they need to deliver on, with somewhat limited support from marketing and sales departments that are often preoccupied with the revenue streams that make up for the lion’s share of the company’s profits.
Continuing with the examples of Microsoft and Cisco, cybersecurity and internet of things are not areas of the market that you’d immediately associate with these two companies. With Microsoft, you think Office 365 or Windows. With Cisco, you think networking. The nature of these companies is that they do not have a particularly burgeoning reputation as innovators within these emerging technology sectors, and as such, it’s difficult for these departments to thrive within an environment so heavily geared towards getting the most out of the core business. Marketing and sales have a much easier job in selling Office 365 as opposed to cybersecurity, or selling networking hardware as opposed to internet of things, and this is the reason that the emerging technology departments can find life tough within these bigger companies. To a certain degree, this is understandable: Cisco’s networking services and products make up for 66.1% of its total revenue, and Microsoft’s Office software is comfortably its biggest earner accounting for $23.6bn over the 2016 fiscal year.
What these larger companies are doing well is using their existing portfolio of clients, and cross-selling or up-selling their new solutions to them. And whilst this is a perfectly good option to exercise, it is not one that can be solely relied upon. At some point, these options are exhausted, and new prospects are needed. It’s at this point that they will need a solid strategy and go-to-market — which is further in line with how a start-up operates.
Of course, not all emerging tech departments in large companies struggle to make an impact. Some do just fine. But we’ve seen some of these challenges first-hand here at Operatix, having worked with smaller organizations within large companies such as TippingPoint, ProCurve, and Documentum. To varying degrees these organizations were experiencing some of the issues we mentioned above: a lack of support from the core business, a lack of experience selling to new persona, and a market perception that needed to be changed.
The solution that we offered revolved around allowing these companies to take charge of their own destiny. With ProCurve and TippingPoint being a part of the wider HP organization, and Documentum being a part of EMC (at the time), their focus was initially set on inbound, reactive activity. This was to be expected, of course. With all the inbound interest that large organizations such as HP and EMC generate, their sales teams were somewhat rusty with the outbound skills needed to push their emerging technologies. This is where we stepped in. Changing their tactics from a reactive, inbound marketing reliant approach to a proactive, account-based sales approach worked wonders. We also helped these organizations to go out and make critical engagements with personas that weren’t aware of the emerging tech on offer.
We understand that innovation is a necessity nowadays, and large companies are increasingly doing their fair share — regardless of the difficulties. When all is said and done however, there is no magical, blanket solution applicable to struggling new departments in large companies. As we’ve previously outlined in this article, there are remarkable similarities between emerging tech departments in large companies and innovative start-ups.
These start-ups often find great success outsourcing their sales activities and this is where emerging tech departments in large companies could also see similar results.
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