Transcript

Sandro Groganz: Welcome Oliver, thank you for joining us for this interview. Let's start with a few words about what you have done in the past, and what your plans are for the future.

Oliver Nachtrab: Hello, and thank you for the invitation. I started my career after I finished my University Degree in Mathematics and held numerous jobs in the IT industry. I started as a Project Manager and Consultant in an enterprise company that developed software for enterprise customers. It was highly proprietary at that stage. Later on, I moved up in that company in Product Management which was not present in this IT company. I think, you often notice in the German market, that product management comes very, very late in the process.

Later, I joined SUSE Linux as a Product Manager and I led the product management team to establish Linux for the enterprise and also for the business market. I established the maintenance and support model to fulfill the requirements of the customer needs, especially in the business environment and not only in the technology area for the geeks and the technologists. After the acquisition by Novell, I led the product management group for the SUSE Linux Products, and I also led the project which integrated the Novell products into the SUSE products to come to a common product portfolio strategy for Novell. I led that project, so we established a major Linux platform within Novell.

When I joined the Open-Xchange team, it was a pure technology company again. I joined the team to transform that company from a project-driven company to a product-driven company. So I built up PR, marketing and product management, and transformed the company to a product-driven company. I initiated a quality assurance team and led the support team - making sure that Open-Xchange was able to provide the requirements from their solutions for partners and customers and software-as-a-service-providers like ISPs, hosters and web hosting companies.

Sandro Groganz: Thank you! Sounds like you have a lot of experience in the product management area. So, I think we will learn a lot from you today here in the interview. Let me know: Why do you think is marketing is important for open source software vendors?

Oliver Nachtrab: So, basically what I think is that marketing is important for everybody, but especially for open source vendors. If I look into the past and into the trend how open source companies evolved, it's obvious that most of them really came from a technology background, i.e. they are great in providing a new technology, they are great in building up a technology community with developers and beta testers and so on. Sometimes, they lack in terms of marketing the products to the needs of their end customers they want to sell their products to. Therefore, especially in the open source area, those companies really have to focus on what the requirements are, what are the challenges of their target customer group is, and how can to fulfill those customer needs with the solutions.

Rather than focussing on open source and marketing for an open source product, it needs to be a combination of both: The marketing side of “Why open source helps for this product” and “Why the product and what needs the product really fulfills in terms of customer needs and requirements”. That is a point where I think many technology companies have to focus a little bit more on, and therefore marketing specialists in the open source area can help them a lot to satisfy those needs.

Sandro Groganz: What are the major trends you see in open source marketing?

Oliver Nachtrab: I see some of the major trends for how to market a product will change in the future. Open source as a technology and a methodology is becoming more and more of a commodity and adapted by the market. When we look five years back, nobody in the business area except large companies like Deutsche Bank etc. had an open source strategy. That changed when people learned what open source meant, how open source works and what are the business models behind open source. That basically was an education process in the market in the last four or five years which is no longer needed to educate the customers.

Therefore, while in the last five years the companies have been focusing on why open source is a valueable benefit, I think the marketing trend is getting more and more into the space that it's becoming more important for the companies again to focus on the problems and requirements of the customer. Marketing their product and solutions they can serve for more target groups while open source will be a supporter. There will be a combination about the arguments on why it is really a value for the end customer to have an open source product rather than a proprietary one.

The decision process itself for the end customer mostly is “I want to fulfill my business needs”. Fulfilling them is the first thing, and then look at whether it is open source or not. This might not be the key requirement for an end customer. Therefore, the marketing of open source products will probably be more specific towards the customer requirements rather than the question whether it is open source and just a “mee too”-strategy on marketing a product where a proprietary one exists - when you can serve the same needs a proprietary one can already serve. Saying the only  value proposition is open source - I think that is too less for the end customer.

Sandro Groganz: We already heard that you have quite some experience as a Product Manager. Product management sits between sales, marketing and development, so there are all these different expectations towards product development. How in the past did you manage to balance all these expectations to roll out a good product in the end?

Oliver Nachtrab: That's a great question. I think it heavily depends on the environment you're currently in - not the environment from the Product Manager, but the the environment the company is currently in.

As an example: When I worked for Novell, it was a total difference to a startup like Open-Xchange. Within Novell, I experienced that you can set-up a product strategy and follow that product strategy, because it is a mid- to long-term strategy. You sometimes even can afford to say no to some specific requirements from one customer if they don't fit into the product strategy for the whole market. You are able to say that's a direction, and this direction isn't even followed by 90% if we followed one specific customer need.

Therefore you can really follow that kind of strategy by talking to many customers rather than only to one or two. Balancing this is different to a startup like Open-Xchange or startups in the open source area in general, where you need to build up customer reference stories and you need to win strategic accounts. Therefore, the balancing process is much more important as you probably will develop some functionality, find some solution specifically for one customer, even if you know it might not be the market necessity - just for the fact of getting these references. The most important thing on how to balance it best is to clearly talk to many, many customers.

In my experience, it's worth talking to the end customer rather than only filtering it through the sales department or the marketing department. You obviously need to balance all the facts there, but the most important thing is really talking to as many customers directly, face to face, to 100% understand their needs to make sure you can set-up a clear and good strategy for the company.

Sandro Groganz: We saw Yahoo! buying Zimbra some time ago and I guess Zimbra is a competitor of Open-Xchange, your former employer. What do you think - how did the acquisition of Zimbra by Yahoo! change marketing of Open-Xchange?

Oliver Nachtrab: That's a great question - I need to go back a little bit to explain that. When you look in the area of open source vendors like Zimbra, Open-Xchange or others that compete with each other, once open source is set as a strategy at the end customer, they will be in direct competition. But in general, in the example of Zimbra and Open-Xchange, the two companies for example never fought against each other in their marketing, in their messaging and in their whole product positioning, because at the end of the day, there are a couple of big players in that market and there is enough market share. You can take market share away, or create new demand. Obviously these two companies create market penetration and will more or less help each other in getting a viable view in the market that open source alternatives do exist.

So, Zimbra and Open-Xchange - as said - never fought each other, and when I talk e.g. to Scott Dietzen from Zimbra... he's a great guy, and Zimbra is really a great company. It's always an open communication between these two companies. At the end of the day when that acquisition took place for Zimbra being acquired by Yahoo!, what happened in the market is that suddenly many end customers really saw that there are viable solutions out there and which other viable solutions besides Zimbra are on the market.

As our brand was stronger in Europe and in EMEA, Zimbra's was very strong in the USA. Suddenly, a lot of Americans looked at Open-Xchange and saw that they are providing similar solutions, that they are providing software-as-a-service-solutions and that also helped Open-Xchange to focus on that market and in being seen as a viable market player. Therefore, Open-Xchange also focused much more on the software-as-a-service-side of it, making sure the market really understands it architectural-wise, business-wise as well as TCO-wise. It makes much more sense for web hosters and ISPs to take an open source based solution like Open-Xchange instead of e.g. a Microsoft solution.

Sandro Groganz: So you have your experience as a product manager within a startup like Open-Xchange, but you've also been Director of Product Management at SUSE. How did product management and marketing change once SUSE was acquired by Novell?

Oliver Nachtrab: It changed in that sense that we at SUSE suddenly had a bandwith which we had not before - in terms of resources we had as well as in terms of a partner channel. During the acquisition we more or less saw that the vital point of the acquisition making it successful is really the human aspect of it. Looking at the acquisition process and looking at the results afterwards, what changed e.g. in product management and marketing, I travelled a lot to my colleagues in the USA to get to know them.

We recognized that you actually don't buy the technology, you buy the human capital of it. That was a criticial milestone on the whole process. It was also a critical milestone in the process when we first launched a product under the Novell brand. So when we launched the first Open Enterprise Server based on SUSE Linux Enterprise Server, it was a team in the launch process of 50-60 people with about four continents really participating in it. Having people to put in additional resources on the one side, and really spreading out the marketing messages to the needs of the local requirements - USA, Asia, EMEA.

SUSE itself hasn't had this bandwith to really focus on four different continents or geographics, but with Novell we suddenly had the possibility to do so. It was - from a messaging point of view - obviously important for the costumers to get the realiability and take away the fear which was in the market at that point. SUSE being bought by Novell - now SUSE Linux, is getting a proprietary solution. This was never the case to be addressed when SUSE was on it's own. But having Novell together as a strong “mother company”, it suddenly became an issue because people compared NetWare with SUSE.

So we had to refocus again: No worries, Novell is 100% committed to strategies like open source and Linux and we will continue that path. For this, the marketing approach changed a little bit to make sure that reliability stays in the market - and it's been a viable message at the end of the day.

Sandro Groganz: Thank you - great answer, very interesting. Which piece of advice do you have for aspiring marketing experts? How can they become as good as you are?

Oliver Nachtrab: I think there are a lot of really good marketing experts out in the market, but sometimes they are too much in the middle of company strategy, in the middle of missing resources in development etc., so they can't really focus on their work. What I think is really important for product managers and marketing people, that they first really stand up and the end of the day to “do their homework”. What I mean with that is that very often you see a technology coming out of the development teams and departments and is being pushed on the table of marketing experts. Nobody looks at the market they want to serve.

The first thing really to do is to: create a business plan that is viable, look at the target groups you want to serve, look at the challenges you'd like to solve, which customers do you have, what are the key requirements those customers have - and then look at the product you want to deliver, making sure you serve those requirements. If you have done that properly, and if you have created your business plan properly, at the end of the day you will be much more successful in marketing and creating the messaging, because you will base the messaging on the customer requirements, rather than technology.

I think that's one of the most important things. Talk frequently to customers, to prospects. Even share your ideas to those you trust in that area if you'd like to introduce a new product.

I've seen so many great products that have been just marketed for the wrong customer segment and therefore have been totally unsuccessful. That needs to be crystal clear before you start more or less even the development. I know that is theory, because very often product management and marketing are not strategically positioned within the company to have the power to drive that process. That's also very important for people in that area to stand up and make sure you're holding that kind of strategic position, because it is a strategic position.

Make sure you are listened to in that market and in that company at the end of the day, make sure people follow your guidelines as well as listening to the guidelines from all teams and customers. I think these are three to four points which are really important for a product manager.

Sandro Groganz: Thank you, Oliver, for some great answers - thank you very much!