There is a common belief among the tech industries that the
most important person to talk to is the engineer. Magazines like EDN, EE Times, Electronic Design and
Electronic Products are traditionally dedicated to the electronics engineer and
providing "solutions" to the engineer's problems. They are right, of course, that the
engineer has to be convinced before a product can be sold, but the problem is
that in today's economy, the engineer isn’t the final decision maker. That decision rests with the CFO. And they aren't buying anything right
now because no one is telling them what they want to hear.
The CFO asks only one important question and, invariably,
the head of engineering answers that question wrong. And the reason they answer the question wrong is because the
vendor's marketing efforts are geared only to answer the questions the
engineers ask, so the engineers are not prepared to answer the CFO correctly.
What's the question?
"Can we you do your job with what you have now?"
What does the engineer answer? "Of course we can."
So the CFO says they can't buy the tool or service.
Engineers always like to have the latest gizmo to try out
and see if it work, so they get
enough budget to try a few new things but never enough to put the new stuff into action. Engineers believe that they can solve any problem with whatever tools they have already and whatever
they don’t have they can jury rig. The tech industry will remain in a slump until someone
figures out who the real customer is, because it isn't the engineer.
Take for example, my favorite whipping boy, Electronic
Design Automation. Just about
every company in that industry will say the same thing about marketing: There's only 5 to 10 companies that we
are concerned about as customers, we know who they are, so we don’t need to do
marketing. Let's take a look at
who those companies are:
Freescale, Texas Instruments, AMD, Intel, Infineon, Nokia, Samsung, NEC,
Toshiba, LSI Logic.
Not a single company in that mix, with the exception of (Yeah, yeah. I've heard of all kinds of wonderful things are being worked on, but nothing of significance has come out for a decade.)
Intel, is doing anything of consequence in new semiconductor development. They are only tweaking what they have already developed. Some of them are on the verge of
disappearing altogether. They are renewing licenses of current EDA tools, but
they are not buying anything new because they are not making anything new. Those small companies that they are
talking to are being strung along with experimental single-license sales, and they aren't giving permission for the
smaller companies to say anything about their relationship, so there is no
marketing advantage in the relationship for the smaller companies.
(Yeah, yeah. I've heard of all kinds of wonderful things are being worked on, but nothing of significance has come out for a decade.)
Almost no company in EDA has made a financial case for their
technology to their customers.
They can give all kinds of reasons about how it makes the design of the
customer's products easier, but that means the customer ultimately needs fewer
engineers to do the job, and they aren't going to tell the CFO that. (Full disclosure: my compatriots in the communications biz aren't establishing their financial benefit either. And because I'm one of the few who does, no one believes me. Sheesh.)
The semiconductor companies have the same problem. They can't sell the financial benefit
of new products to systems companies because they don't know what that benefit
is. The systems companies don't
know how much money their customers will save by buying their systems and so
those customers can't sell new products to, ultimately, to the general
consumer, because they can't figure out what good it is. (Link NSFW).
The way we get out of this financial mess we are in world
wide is to figure out how to sell the financial benefit, not the engineering
prowess. That is going to take
some investment in the form of marketing, and that still is in the hands of the
our bottleneck right now.