How Red Hat and New Relic market to developers

Red Hat and New Relic are some of the most interesting companies out there. As Linux fans, we have been always amazed at the things that Red Hat has achieved. They are one of the largest contributors of many important open source projects, including the Linux kernel and Kubernetes. And we all know how big Red Hat is.

New Relic is an application monitoring tool company that sped past all its competitors in its early days and achieved IPO. In 2015 the company had a revenue of $29 million, with a year-on-year revenue growth of 69%.

What do these tech giants have in common? Their marketing strategy. Apparently, a huge portion of their marketing is focused at developers and system administrators, as documented in a series of Growth Hackers interviews (Red Hat interview, New Relic interview).

Grass-roots

In the early days, Red Hat and New Relic both followed a grass-roots, bottom-up approach.

Instead of focusing on selling to IT leads, New Relic focused on developers and system administrators. Those people then became internal advocates for their product, because they loved their product.

Red Hat's early story, although it happened a decade earlier, was similar. They had trouble selling to IT leads because back then they were small and enterprises didn't trust open source. But their product was good and (compared to proprietary Unix systems) inexpensive, so system administrators loved them and installed Red Hat anyway. This gave them leverage, because all of a sudden CTOs would discover that their organization was running thousands of Red Hat installations.

Events and community

New Relic organized, and still organizes, a lot of developer events such as hackathons and meetups. They sponsor a ton of conferences. All this generates brand awareness and a sense of community in their direct users.

Red Hat doesn't seem to organize hackathons and meetups as much, but they still generate a lot of brand awareness by being directly involved in the development of nearly every important open source project.

Even though both of them have "graduated" from their early days, and have strong sales teams nowadays that also target executive-level people, they still stay true to their grass-roots origins.

Freemium

Both Red Hat and New Relic believe that the freemium model is important when selling a developer- or sysadmin-oriented product. Developers being able to tinker with a free tier is what allows them to become internal advocates, who will later help Red Hat and New Relic to convince higher-ups to buy their products. New Relic has had a free plan since forever, while Red Hat has a free tier through Fedora and CentOS. Their philosophy is: let people use the product first; if they love it then selling will naturally take care of itself.

I understand this. Developers (myself included) tend to have an aversion against sales and marketing tactics. We want to test things ourselves, we want to know for sure that something will solve our problems. Payment walls and "contact sales" forms pose a significant barrier.

As developers are getting more and more influence over the buying process (and, increasingly, are the buyers), I believe that having a free tier becomes increasingly important going forward.

Closing remarks

Both Red Hat and New Relic are believers in a bottom-up approach to marketing and sales. Stay close to developers, understand them, and let them tinker before trying to close the deal.

Red Hat's CEO has one more tip: sell a vision rather than a product. Advocate a mission larger than your product; one that makes people's lives better.

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