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SaaS

The proliferation of SaaS and Apple’s demonstration of the impact of product design and user experience, have changed how marketers and their companies look at products.   The lines between product management, product development, marketing, and sales are disappearing as quickly as chocolate from my kitchen.

At a recent Churchill Club CMO panel, Nora Denzel, Senior VP, Big Data, Social Design and Marketing at Intuit  articulated this trend best with the comment, “our product IS the funnel.”  She described that Intuit customers make decision based on product use, not marketing messages. Their experience in using the product determines whether they spend money on it.  That should be old hat to anyone offering a freemium model, but may not be explicitly understood by companies new to the products as services environment. Even more traditional products are evolving to play a bigger role in sales and marketing.  Interactive TV guides provided by carriers upsell on-demand channels and premium content, toys include complimentary on-line gaming components that cross sell more toys, and grocery packaging offers recipes that promote sister brands and products.

A key implication of this product-as-sales-tool trend is the accompanying change in product design and development, which marketing leaders clearly recognize. Jonathan Becher, CMO at SAP  remarked that “product launch is the day you sat down to decide what product you are going to build.”  To which Laura McLellan of Gartner quipped, “If marketing gets involved when the product is done, engineering gets what it deserves,” voicing my own observations that R&D culture has been slow to change and, in some companies, still drives product roadmaps with a myopic focus on technology and features rather than user experience.  (You know who you are.)

Taking it a bit farther, Jonathan Becher described a vision of product development in which just-in-time creation of features and designs that respond to the customer’s current preferences would replace precisely targeted marketing of existing products

Bottom Line: Whether you’re delivering products on-premise or as service, your Product Managers should have among their top design criteria:

  • Ease of use and high quality customer experience
  • Opportunities for customers to experience the product before they buy
  • Usage and behavior-based upsell and cross sell features
  • Seamless integration of usage, behavior, and request-based support and social features
  • Intelligence and analytics capabilities that use information like product configuration, user behavior and preferences, and transactional data to provide additional value to your company and to customers
  • Product architecture, design, and/or manufacturing process that allow fast and easy modifications, feature additions, and integration of complimentary products.

Please share your examples of products with built-in sales and marketing.

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The “As a Service” business model is spreading like wildfire – in the tech sector and beyond.   This is the first of a series of observations about this old, but new again approach to business, and what it implies for both the providers and consumers of services.
For the first in this series, my own attempt at a basic definition:
“As a service” (AAS) refers to businesses that sell their goods on a subscription basis.  The more traditional alternative  is to sell once, and upon that sale, transition ownership from the seller to the buyer.  The change in ownership is perhaps the core differentiator between “traditional” and service-based businesses.   In the AAS model, the change in ownership either:
  1. Happens slowly over time, as in the case of businesses whose services is to deliver information or products over time – think “Cheese of the Month club” or magazine subscription.
  2. Never takes place at all.  In this pure service model, the seller retains ownership, and in essence sells access to use the goods.   This is of course the model being implemented by Software as a Service (SaaS), Platform as a Service (PaaS), and  Infrastructure as a Service (IaaS) vendors that make up the hot “cloud provider” market.
That’s my attempt at defining  AAS in the broadest possible terms.  All comments and better definitions welcome and encouraged!
Next time –  Why switch?
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CIO Agenda Recap

by Lilia Shirman on May 11, 2009

in Technology industry

At the Churchill Club CIO Agenda event last Thursday, Peter Solvik (formerly CIO at Cisco) led a discussion among a powerhouse of IT leadership:  Matt Carey, CIO of Home Depot (former CTO, eBay and Wal-Mart), Karenann Terrell, CIO of Baxter (formerly CIO at Daimler / Chrysler), and Lars Rabbe, former CIO at Intuit and YahooTopics included SaaS, Clouds, the good an bad of vendor consolidation, and the uptake of Web 2.0 and collaboration technologies.

Here’s a summary of their views and my takeaways on these top-of-mind IT themes:

Q: What are you focusing on over the next year?

All three CIOs are managing costs more actively, but key strategic projects are still very much under way.  Baxter is doing a massive new ERP deployment, and Home Depot is continuing its supply chain upgrade.  Home Depot’s CFO says that right now, “cash is king,” so the company has stopped construction of multiple new stores (while competitors are continuing to build at a faster rate,  and cut costs in IT and operations.

Takeaways:

There are two ways to sell in this environment. 1. Show concrete cost savings and a short time to realize them.  2. Find out what your prospects’ one big initiative is, and show how you add value to it.

Q: Consolidation – Good or bad? Giving vendors too much power?

Here the CIOs disagreed. Lars felt consolidation helps ease integration, though of course too much consolidation eliminates alternatives. Overall, he felt he’d benefited from consolidation as a CIO. Matt agreed that better integration was a positive, but is concerned that vendors may gain too much power in negotiating contract renewals and maintenance fees.

Karenann, on the other hand, believes that the benefits of integration are limited, that it moves slowly, and that it “has not unraveled the complexity.” Even worse, while everyone is busy with integration, there is a pause in innovation. Karenann also voiced a concern about unjustified support and maintenance costs: “I’m willing to pay an annuity, but only if I get extra value.”

Takeaways:

  • Complexity is still a challenge, so both big and small vendors that can help reduce it can do well.
  • If your competitors are buy digesting acquisitions, take advantage of innovation as a differentiator
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