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February 2010

Scott McNealy's Final Goodbye

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I met Scott McNealy several times over the last year in customer meetings and to talk about Sun's open source strategy.  He's a class act all the way.  He sent out his final email to Sun employees and partners earlier today. 

Here's an excerpt:    

    While it was never the primary vision to be acquired by Oracle, it was always an interesting option. And this huge event is upon us now. Let’s all embrace it with all of the enthusiasm and class and talent that we have to offer.

    This combination has the potential to put Sun, its people, and its technology at the center of yet another industry and game changing inflection point. The opportunity is well documented and articulated by Larry and the Oracle folks. Not much I can add on this score. This is a very powerful merger. And way better than some of the alternatives we were facing...

    So, to be honest, this is not a note this founder wants to write. Sun in my mind should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company. And I sure “hope” America regains its love affair with capitalism. And except for the auto industry, financial industry, health care, and some other places (I digress), the invisible hand is doing its thing quite efficiently. So I am more than willing to accept this outcome. And my hat is off to one of the greatest capitalists I have ever met, Larry Ellison. He will do well with the assets that Sun brings to Oracle...

    Oracle is getting a crown jewel of the technology industry. They will do great things with Sun. Do your best to support them and keep the Sun spirit alive and well in the industry. Our children will be better for it...

    My best to all of you, and remember: Kick butt and have fun!

You can read the entire letter over at CNet.


Growing 100x through inbound marketing

Around a year ago, I took on a new role at Sun as vice president of lifecycle marketing. While the title was an odd one, the charter was pretty straightforward: Bring the best practices of open source, Web 2.0, and modern online marketing to Sun's portfolio of servers, storage, software, and services in order to drive up revenues and drive down customer acquisition costs.

Open source was an incredible calling card that we could use to determine what customers were interested in. Now we just needed to figure out how to harvest that interest.  It worked for MySQL as a startup, but how would these techniques apply in a bigger company like Sun?  Pretty well, as the graph below illustrates.


(Click to expand the image)

We achieved more than 100-fold growth during the year in terms of top-of-funnel raw leads as well as qualified BANT (Budget, Authority, Need, Timeframe) and pre-BANT leads. And while there was sometimes skepticism that online marketing activities could generate real revenues, we finished calendar Q4 with a sales-accepted pipeline value that would be on par with what you might see in a 5- to 10-year-old startup company.

In fact, the group operates a lot like a startup within Sun and has achieved the kind of growth that would be the envy of any startup in the Valley. We haven't reached the point of having a perfect closed-loop system to track every deal that closes anywhere in the world, so the pipeline metric is fairly conservative. From a cost perspective, we achieved more than a 10X ROI on fully loaded costs, including all program dollars and head count costs. We've seen our efficiencies improve through the year, with response rates increasing by a factor of 10 to 20, while cost per lead has gone down and average deal size has gone up. (Note that these numbers are exclusive of MySQL's results, which continue to operate as a well-oiled lead machine.)

Even more promising is the fact that there's still plenty of room for growth. I expect that over time these efforts could approach half a billion in pipeline if they are connected to an expanded inside sales effort. Limited calling resources have been the gating factor in our growth at Sun and that's an area where Oracle has considerable expertise.

The most common question we get when we present our results is "what was the one thing that drove the growth?" Unfortunately, it isn't that simple. As Brian Halligan, CEO of Hubspot has said, for 99 percent of companies, marketing doesn't require automation -- it requires a transformation. And that's exactly what we did. It wasn't a question of doing one thing, it was more like getting hundreds of things going across many different areas of the business, ranging from holding product-positioning workshops with engineering teams to establishing broad efforts to generate leads with white papers, Web seminars, and product registration incentives. There was relentless A/B testing of e-mail campaigns, new efforts for lead nurturing, scoring, and routing optimization.

Mostly it came down to continuous experimentation, measurement, and refinement. There wasn't a single quarter where we didn't overachieve on our results and still feel that  we had more room for improvement. That approach is alive and well in the lifecycle marketing and online marketing teams at Sun, and I hope it will continue on at Oracle.

In a subsequent post, I'll describe some of the specific techniques we've used to drive growth, many of which are described in the excellent book Inbound Marketing by the marketing gurus over at HubSpot.

Update:

Here's a follow up blog post I wrote over at HubSpot.

You can follow my blog posts via twitter at http://www.twitter.com/zurlocker.


Dennis On the Road to Recovery

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(Click on the image to enlarge)

Dennis Wolf, former MySQL CFO, has been undergoing Plasmapheresis treatment in the last week and despite a mild setback due to an infection, he will be checking out of the hospital today to continue rehab as an outpatient.  Dennis reports that he has increased mobility in his leg and that the test for Devic's Disease and Multiple Sclerosis has come back negative.  So there's a bit of a mystery as to what has caused this NMO flareup, but the fact that it's not Devic's disease is good news as it means a recurrence is less likely. 

Dennis will be continuing treatment as an outpatient for the next several weeks and will also be getting a second opinion from the experts up at UCSF. 

Marten Mickos put together a couple of nice posters that were hanging in Dennis' hospital room including the one above featuring the MySQL executive team (known informally as the 4th Box Club) and a quote from James Stockdale:

“You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

Dennis, we are thrilled to hear of your progress!

Feel free to add your comments for Dennis below.