Product Management - SaaS vs Traditional Software
By Michael Shrivathsan on Sep 9, 2009 in Product Management, User Experience
Mark Kromer at TechProdo blog recently wrote a nice blog post titled SaaS Product Management: Is there a difference?
In his post Mark poses the interesting question (applicable to a lot of product managers):
I was wondering what differences I would find in my role as a product manager if the products that I was managing moved to the software-as-a-service model…
As our company makes a popular SaaS tool for product management teams, we have good first-hand experience in this - and I’d like to share my thoughts here.
My short answer to Mark’s question is…
There’s NO significant difference - in doing product management for SaaS as opposed to “Traditional” software.
That said - there are some things that become even more important to do well in a SaaS model. Here’s my short list…
SaaS Emphasizes These 3 Things Even More
When a company employs SaaS model, like we do at Accompa - we have to earn the customer’s business again and again every month or quarter (or other time period, usually no longer than 1 year).
Plus, the release cycles tend to be much shorter - i.e. SaaS apps have much more frequent releases.
As a result, the following 3 things become even more important for PMs of SaaS apps:
- Understand REAL Needs and Meet Them
- As product managers, we need to understand real customer needs and meet them well. We’ve got to make sure the features we’re designing meet real needs that real customers will pay real money for!
- Tom Grant talks about the pitfalls of not doing this in his recent blog post.
- Focus on Ease-of-Use
- If your SaaS software is not easy-to-use, users will pretty soon stop using it. It will become shelfware, which means customers are less likely to renew - and your company will lose recurring revenue base.
- Product managers should take initiative to learn about UI design and interaction design - and work closely with UI designers to ensure their software is as easy-to-use as possible.
- Eliminate Wasteful Activities
- SaaS products usually have faster release cycles. This makes it imperative for product managers to focus on value-adding activities and eliminate wasteful activities.
- For example - I consider spending a lot of time on abstract stuff like Personas to be quite wasteful.
I consider all of these to be very important points for traditional software too - but I feel many companies do not emphasize them enough. At Accompa, being a SaaS company, we emphasize these points a lot - they’re an important driving force behind our product management activities.
What are your thoughts on these 3 points? Anything else you think is different in SaaS product management? Chime in here…
Did you know?
1. Len | Sep 9, 2009 | Reply
I agree–there is no significant difference–the Product Manager’s job is to design products that resonate in your target market. However, I don’t agree on all of your points. Quicker release cycles means that you need to understand your customers MORE (i.e. have personae and other good market data) to maximize the value you build into those quick release cycles.
2. Product Management Tidbits | Sep 9, 2009 | Reply
Fundamentally they are the same — but practically, SaaS product management is different. It requires us to retool, drop some of the old, and embrace new methodologies and tactics. I also believe it broadens our scope and increases our dependency (or interdependency) between departments. I touched on these topics and others in several related posts. Below are a few relevant articles.
• SaaS Product Management Challenges
• SaaS and the Evolving Role of Product Management
• Shifting from Product to SaaS - Before you Start!
• SaaS Impact on Product Management
Looking forward to increasing the discussion.
Barry Paquet
http://www.quantumwhisper.com/product-management-tidbits/
3. Michael Shrivathsan | Sep 9, 2009 | Reply
Hi Len - I agree with you that it is important to understand customer needs well.
That said, It’s hard for me to believe that doing *more* (especially abstract stuff like Personas) will help us move faster. I’d think doing *less* will help us move faster.
4. Michael Shrivathsan | Sep 9, 2009 | Reply
Hi Barry - Interesting. I look forward to reading your articles to learn about your perspective on Product Management for SaaS apps.
5. Stewart Rogers | Sep 11, 2009 | Reply
Always worried about failing the math test!
Good post Michael and I agree with you. The job/responsibility is the same but the dynamics are different. But they are different for any product, not just because you are SaaS or not.
Stewart
6. Mark Kromer | Sep 11, 2009 | Reply
So far, I am finding that the planning, pricing and business case activities are quite different in SaaS vs. tradition on-premises media-based software products.
That being said, those are all parts of the job for a product manager for most ANY technology product.
7. Henrik Kenani Dahlgren | Sep 18, 2009 | Reply
When working with SaaS product management I find it usefull to look at others who do not see themselfes ass SaaS providers, like the swedish music service Spotify - Free music (leagal) over the internet. (ad’s com every hour or so..)
The release their new versions of the client without asking, the patches are so small that the customer rarely notice all the sudden there is a new feature there. The release is first to all employees, then t the beta testers and on and on in 5 degrees before all have it… that way they see when something is wrong early. I like that release method, and I think SaaS product Managers can look at their method.
8. Arvind | Feb 22, 2010 | Reply
I think they are not the same. I recently posted on this at my blog here http://soa-bam-bi.blogspot.com/2010/02/how-is-saas-product-management.html
In Saas product management you have to worry in lot more details about all these items listed below.
1) Data Management of customer data (Backup, recovery, export, migration)
2) Additional security around Access & Authorization
3) You earn your money every day and every moment, so it is not a traditional sell once and forget till the next new producty is available. If you fail customers may not and will not renew the subscription. So you have to develop SaaS with some stickiness feature like creating a website with lowest bounce rate and higher CTR (click through rate). so that there is highest probability of customers renewing.
4) Special considerations for On Demand / Multi Tenacy of the product / solution.
5) Much higer emphasis on Disaster Recovery, Peak Load and High Availablity.
6) One size does not fit all, so how would you provide innovation in cloud? How to empower customers in cloud so that they can maintain their cuttting edge by intelligent customizations.
9. Mark Kromer | Mar 6, 2010 | Reply
Arvind - in reading your comments, I will still say this: Product management in SaaS vs. traditional software is very similar with some differences. Even those that both you & Michael mention here are differences in 2 primary ways that, to me, are minor:
1. Focus on the different technologies aspects, particularly in terms of delivery of the value to the customer
2. Focus more on certain aspects of a PM role that effect the way a customer interacts with your product and how they receive & perceive value.
I am sticking with 3 areas that I feel are MOST significantly different:
1. Pricing
2. Release mgmt
3. Analytics
I recently continued blogging my research on this for Oracle on my blog @ TechProdo particularly focusing on collecting and analyzing customer data for hosted/SaaS solutions via Clickstream vs the richer content available from more in-depth CRM systems from traditional software manufacturers:
http://techprodo.com/wordpress/?p=238