One of the most underappreciated roles in software is that of competitive intelligence. Too often organizations see this role as the first to be cut. But having someone that knows where the other vendors in your space are heading can be valuable. I can just imagine how vendors in the Content Services Platform, a.k.a. ECM, and Contract Lifecycle management space felt when a $9 billion gorilla moved into their space at the end of July. Those organizations that understand the value of competitive analysis can dominate their space. Those that don’t understand its value simply won’t.
Here are some examples of how competitive intelligence could have saved a lot of time and money. (Real names have been changed.)
EasyFile Creates a New Platform
I ran into a vendor, let’s call them EasyFile, that decided that they were losing opportunities in the small business market to a few large vendors in a similar space. EasyFile wanted to own that market too. So they decided to create a new product, let’s call it SimpleFile. The team decided that in order to deliver on SimpleFile at a lower price point, they needed to minimize features that were in EasyFile. SimpleFile removed a ton of functionality and delivered a subset of what EasyFile had. After much fanfare at its launch, a year later there is no mention of the product.
What happened? The team didn’t do any competitive intelligence about the existing market vendors. They removed so many of the available features of the product that, even though they could compete with price, they lacked the features needed to match their competitors to win deals. I can only imagine that no one ever looked at the features the competitors offered.
DarlingPartner’s New Strategic Partner
Another vendor, let’s call them DarlingParnter, had been the darling add-on solution for a partner’s platform for several years. As we know, success breeds competition. DarlingPartner’s focus on that sole vendor took a lot of work. Over time, DarlingPartner no longer found themselves the darling. So DarlingPartner took a look at the market and found the next biggest similar vendor and proceeded to create a new strategic partnership. Major announcements were made. A year later, there was no evidence of closed deals and the partnership was no longer talked about.
What happened? The partner team didn’t do any competitive intelligence about the new strategic partner. Had they done any, they would have realized that the new strategic partner already had the same add-on solution in its own product portfolio. The strategic partner’s product was competitive to their own. The sales team at the strategic partner would of course be focused on selling its own products and not the Partners.
Competitive intelligence needs to be a function that is addressed in every vendor organization. Knowing what your competitors are doing, how they are doing it, and why will make your team stronger. It also allows you to act on opportunities rather than react to events.
In the words of Chinese philosopher Sun Tzu in the Art of War, “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”