Transcript Slide 1

Elevating from Consumer to
Mission Critical Value
Brian Cox
Sr. 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
“Dropbox wants to take over the enterprise,
but one thing stands in its way:
Dropbox itself.”
—VentureBeat August 13, 2013
http://venturebeat.com/2013/08/13/dropbox-the-enterprise/
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A Global Brand Leader in Consumer Flash Storage Solutions
Retail: The Leading Brand of
Flash in Key Markets
All Leading
Smartphone
& Tablet
Manufacturers
use SanDisk
SanDisk
Client SSDs
Used by
All Leading
PC Manufacturers
#1 Global Retail
Revenue Share
Given that SanDisk has a very strong brand in Consumer products,
how can this be extended to Enterprise IT?
NPD
Estimate, Nov., ‘13. Estimates of the memory card & USB markets from NPD (Nov. ‘13) and GfK Retail and Technology, Sep., ‘13.
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Flash/SSD’s and Buying Intentions Quadrant
Comp Set Avg. Definitely Would Consider
Index of Percent Definitely Would Consider
240
220
Comp Set Avg. Definitely Would Buy
156
SanDisk
200
SanDisk
180
Fusion IO
160
140
Hitachi
120
Seagate
Toshiba
100
51
66
130
Seagate
Western Digital
80
Toshiba
Comp Set Avg
60
115
Hitachi
Western Digital
40
109
Fusion IO
20
Comp Set Avg
0
0
20
40
60
80
100
120
140
160
180
200
Index of Percent Definitely Would Consider/Definitely Would Buy
220
94
240
Tech Buyer Intelligence Reports | Spring 2013, Wave Two
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Keys to Success in
Consumer versus Mission Critical
CONSUMER
• Nearly All about the Product (and scale)
• Supported by online marketing
• Must be intuitively easy
Lower prices afford little or no
individual customer nurturing
Source: http://svpg.com/moving-from-enterprise-to-consumer/
MISSION CRITICAL ENTERPRISE
• As much about the Sales organization
as the Product
• Supported by Field Engineers
• Product requires training and
integration with existing gear
High prices with extensive
nurturing and long sales cycle
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Managing the Buyer Personas
CONSUMER
• End User driven
• Influenced by advertising and possibly
consumer sites
MISSION CRITICAL ENTERPRISE
• Purchasing Department driven, but
influenced by End User stakeholders
• Influenced by Sales Reps, industry
studies and community of experts
Requires convincing the End User
http://www.mindtheproduct.com/2013/02/consumer-vs-enterprise-product-management/
Requires convincing
multiple stakeholders
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Do It Right: Go Back to the Basics
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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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Direct  Indirect  Influence
are the Enterprise SSD Customers?
Enterprise Application Software Vendors: SAP, Oracle, Microsoft, VMware…
Line of Business/Function Owners: Manufacturing, Sales, Finance, HR, etc.
Traditional Enterprise Data Centers: General Motors, Texaco, AAA, IRS, etc.
Traditional OEM Server & Storage Array Vendors: IBM, Dell, NetApp, etc.
Growing Web 2.0 & Cloud Computing companies: Google, Yahoo, eBay, etc.
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to Reach the Customer: Routes to Market
TRADITIONAL ROUTE
SSD Vendor
OEM
End Customer
INFLUENCE
EMERGING ROUTE
SSD Vendor
OEM
End Customer
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
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to Reach the Customer:
Build Awareness
Advertising 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.
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Source: KnowIT Information System, Prof. Michael Goul, Arizona State University
Revenue
R&D $
Sales & Mktg.
Headcount
Sales Headcount
Mktg. Headcount
Sales: Mktg. Ratio
Sales & Mktg. $
Sales Mktg. % of
Revenue
Revenue per
Salesperson
to Determine the Level to Staff the Team
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
Growth/land grab
Competitor D
$191
$66
115
66
49
1.3
$27
14%
$2.9
Declining revenue
Competitor E
$503
$151
260
142
118
1.2
$72
14%
$3.5
Mature / Harvest
OEM centric
Industry benchmarking for staffing the Sales and Marketing effort
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to Target:
End User Segmentation / Focus – Go To Market
Segment
HyperScale
Datacenter
Sub-segment
Web 2.0
Database
MemCached
Transaction
(OLTP)
Analytics
High
High
Virtualization
Nearline Archival
Workstation
…
Cloud
High
High
Large Enterprise
High
High
Medium Enterprise
High
High
High
High
High
Small Enterprise
Pro-sumer
Requirements:
Medium
Requirements:
Requirements:
• Dedicated business/tech sales per
• Build direct engagement, by vertical/geo
• OEM co-marketing to scale efficiently
major account
• Dedicated support team, on par with
Tier 1 OEM
Need right product, partners, proof points, reach, sales, fulfillment, support to win in each
segment
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to Target:
End User Segmentation / Focus – Product
Segment
HyperScale
Datacenter
Sub-segment
Web 2.0
Database
MemCached
Transaction
(OLTP)
Analytics
High
High
Virtualization
High
High
High
Large Enterprise
High
High
Medium Enterprise
High
GeoHigh
High
High
Vertical
Finance
Small Enterprise
Media
HPC
Telco
US
EMEA
Japan
…
…
Medium
Flash Usage
China
Where Marketing team will further define
Workstation
…
Cloud
Pro-sumer
Nearline Archival
Storage Model
Server
Ext. Storage
Cache
Primary Storage
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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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Information do Buyers Need to Buy
Flash/SSD’s Key Criteria That Drive Intentions—IT and Line-of-Business
Index of Brand Selection, Marcomm and Sales Effectiveness Criteria Regression to Likely to Buy
IT Criteria
283
270
171
122
A
Case Studies**
A
Thought
Leadership*
121
B
Post-Purchase
Support*
Quality/
Reliability/
Uptime*
Industry
Knowledge**
*
120
B
106
Sales Effectiveness
77
72
72
B
Product
Evaluations**
Bringing in
Experts***
123
116
63
52
Marketing Effectiveness
Key Purchase Criteria
Ease of
Integration*
Support by My
VAR/Reseller*
Sales
Creativity***
94
91
Technical
Knowledge**
*
TCO*
Line-of-Business Criteria
307
185
A
Product
Evaluations**
B
White Papers**
167
B
ROI*
Source: Tech Buyer Intelligence Reports | Spring 2013, Wave Two
139
B
TCO*
139
B
B
Customer
General Events/
Testimonials** Conferences*
113
88
B
PostPurchase
Support*
3rd Party Rec.*
Value*
Case Studies**
Ease of
Doing Business*
75
Ease of Use*
Source: Silicon Valley Product Management Association| March 5, 2014 Milpitas, CA
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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 510 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
THIS
NOT
THIS
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