SOFTWARE PRODUCT MANAGEMENT Laxmi Gunupudi

FOURTH INDUSTRIAL REVOLUTION

WHAT IS “DIGITAL” ?
…… electronic technology that generates, stores and processes data in terms of two states:
positive and non-positive
Positive expresses as number 1 and non-positive as 0
 DIGITAL?
Digitization
­ Converting something non-digital to digital

Digitalization
­ Enabling, improving and changing business operations, functions or activities
­ Utilizing digital technologies and digital data to create managerial resilience and actionable
knowledge
Digital Transformation
­ Unlocking new value or create new value propositions through use of technology
­ Requires both digitization and digitalization
­ Focus is on whole organization, and large-scale
­ Involves radical re-design of business-models, processes and competencies

(Refer: http://www.roboticandcognitiveautomation.co.uk/Blog34.html )
DIGITIZATION
Products
Processes
Services
DIGITIZATION OF PRODUCTS
Digital Products – Products that are fitted with computing devices and are connected
to the cloud
light bulbs
Thermostats
elevators, cars, tractors…
Products become smart and connected
DIGITIZATION OF PROCESSES
Business systems that take advantage of digital technologies
Payroll accounting, bank mortgage processing etc..
Increase efficiency and lower operating costs
DIGITIZATION OF SERVICES
Digitization of services to deliver compelling, personalized experience
Mobile phone (+geolocation data) – channel for providing these services
Online booking, transportation services, food delivery services
Smart watches, virtual and augmented reality devices
TECHNOLOGY EFFECTS
Technology is getting better and cheaper
“Falling costs of technology”

2018 $100
2018 $300 to $800 2018 $0.12
2021 $59 2021 $170 to $500 2021 $0.0253
TECHNOLOGY EFFECTS
Cumulative capabilities of
technology are increasing
Combinatorial effects of
(Mobile, cloud, sensors,
analytics, IoT) technology
are accelerating progress
exponentially
TOP TECHNOLOGIES
 SMAC/BRAIDA – PROF. LESLIE WILLCOCKS
SMAC
­ Social Media
­ Mobile Technology
­ Analytics
­ Computing

BRAIDA
­ Blockchain
­ Robotics
­ Automation of Knowledge Work
­ IoT
­ Digital Fabrication and Modelling
­ Augmented Reality

https://blogs.lse.ac.uk/management/2021/01/19/digital-transformation-is-difficult-which-technologies-to-bet-on/
FUTURE
Innovations so far – only warm-up
Industries, Economies and Societies will be transformed in ways which you envisaged
only in sci-fic movies
­ Drones
­ Robots
­ Autonomous vehicles
“Why software is eating the world” ???
Not jut software. Software, hardware, networks and data
DIGITAL JOURNEY
Fortune 500 Companies 1955 to 2015 - 12% remain rate
Today life of a firm 15-20 years
Dow jones index top players: Apple, Alphabet, Microsoft, Amazon and Facebook
Companies who took advantage of digital
Digitization is critical for businesses in every industry , everywhere
Right time to embark on DIGITAL JOURNEY ……
WHAT DO THEY HAVE IN COMMON
• Marc Andreessen, co-founder of Netscape
• Jeff Bezos, founder of Amazon
• Steve Case, co-founder of AOL
• Michael Dell, founder of Dell
• Larry Ellison, co-founder of Oracle
• David Filo, co-founder of Yahoo!
• Bill Gates, co-founder of Microsoft
• Steve Jobs, co-founder of Apple
• Pierre Omidyar, founder of eBay
• Larry Page, co-founder of Google
• David Packard, co-founder of HP
OBJECTIVES OF THE COURSE
Understand the nuances of software products business
Understand the pivotal role of Software Product Manager
Understand the orchestration between product management and other business
functions
Understand the global best practices in Software Product Management
SOFTWARE PRODUCT MANAGEMENT (WORD “PRODUCT
MANAGEMENT” FIRST INTRODUCED
User Experience
BY P&G IN 1931)

Desirability

Feasibility Viability

Technology Economics
PRODUCT LIFE CYCLE

Design Development Sales and Consulting

Marketing and Support

Data Science and Analytics

Finance/ Accounting and Legal

PRODUCT TEAMS COMPOSITION
Design Team

Top Management
Team Product Owner &
Development Team

Product Manager

Finance /
Accounting & Legal
Team Data Science Team

Consulting &
Sales & Marketing
Support Team
Team
source: https://www.mckinsey.com/industries/technology-media-and-
telecommunications/our-insights/product-managers-for-the-digital-world#
CEO AND MINI CEO
What’s Common?
• Stakeholder focus
• Product Mindset
­ • Repeatable
­ • Scalable
­ • Sustainable
­ • Valuable

• Outcome metrics
CURRENT SCENARIO
• 71% Product Managers in India don’t have Software Engineering Degree
• Only 6% of PMs have the coveted 'Software Engineer + MBA' combination.
• 77% of PMs hired by large tech companies are first-time PMs
• Mid-sized firms are risk-averse - 54% of PMs hired by them have prior experience
• Startups tend to hire former entrepreneurs as PMs – 30% of former entrepreneur-
turned-PMs joined smaller startups
HISTORY AND DRIVERS OF GROWTH OF
SOFTWARE AS BUSINESS

Compute Connect
Moore’s Law Metcalfe’s Law
Digital Future

Cloud

Gilder’s Law
CLOUD COMPUTING DEFINITION
US National Institute of Standards and Technology (NIST) (Mell & Grance, 2009)
captures the most commonly agreed aspects of cloud computing:
“a model for enabling convenient, on-demand network access to a shared pool of
configurable computing resources (for example, networks, servers, storage, applications,
and services) that can be rapidly provisioned and released with minimal management
effort or service-provider interaction.”
 Underlying Concept Characteristics

Time Sharing -1955 Sharing of resources across multiple customers–

Resource pooling / Aggregation of demand
Virtualization – 1960 Abstracted infrastructure and virtualized physical
resources; leads to multi-tenancy
Internet - 1985 Connectivity and ubiquity

Mobile broad band - 1991 Mobile technology innovations -> leads to device
independence form of ubiquity
Grid Computing - 1990 Variety of IT resources, optimum utilization –
efficiency, Economies of scale
Utility Computing - 1995 Service offering of IT resources, Measured
service; Based on PSS where the value lies in
service content – result oriented, pay-per-service
unit based business model
SOA - 1996 Based on prior design paradigms aimed at
modularity and loose coupling; Provides agility
and configurability
Web 2.0 - 1999 Based on interactive and dynamic browser
experience; provides rapid, dynamic, on-demand
access based on self-service
 History / Evolution of Cloud Computing
Resource Management
Resource sharing Product Service
Design Paradigms
System
Time Sharing
1960s Virtualization
Value in service content
Result oriented
Pay-per-Service unit
Resource pooling
1970s Abstraction
Device independence Loose coupling
Modularity

1980s Mobile telephony

Location
independence Internet
Connectivity
1990s
Grid Computing
Mobile Broadband
Variety of IT resources SOA Utility Computing
Multi-tenancy Economies of Scale Web 2.0 Agility
2000s Dynamic, RapidConfigurability
On-demand Measured service
Self-service
Ubiquity

Cloud Computing
Emergent properties:
Scalability / Elasticity
Availability
CHARACTERISTICS OF CLOUD COMPUTING
Scalability
Heterogeneity
Consumption based pricing / measured service
Accessibility
Availability
Fully managed
On-demand provision
CLOUD COMPUTING CLASSIFICATION – AS-A-
SERVICE
IaaS – Virtualized computing resources as a service –Compute, Storage - Amazon
Web Services, Google compute engine, Rackspace, Microsoft Azure
PaaS - platform allowing customers to develop, run, and manage applications without
the complexity of building and maintaining the infrastructure – Force.com, Google
App Engine
SaaS - software is licensed on a subscription basis and is centrally hosted. It is
sometimes referred to as "on-demand” software – Workday, Google Apps,
Salesforce
CLOUD COMPUTING CLASSIFICATION –
DEPLOYMENT MODE
Public
Private
Hybrid
Community
CLASSIFICATION

Software as a Service
Platform as a Service
Infrastructure as a Service

Private Public Community

Clouds Clouds Clouds
Hybrid Clouds
TRADITIONAL IT VS. CLOUD COMPUTING
PROJECTED BENEFITS OF CLOUD ADOPTION
Economic Benefits Technical Benefits Managerial Benefits People Benefits Strategic Benefits
Accessibility
Access to State-of- Helps in managing Focus on core
Cost Savings (Anywhere/
art technology demand competencies
Anytime)
Access to skilled Reduces Reduced time to
Time Savings Collaboration
resources management effort market
Reduced risk of
Reduced need of IT Responsiveness and
technical Ease of deployment
Personnel Agility
obsolescence
Reduced risk of
experimentation
Global Reach
New line of business
and products
PERCEIVED RISKS OF CLOUD ADOPTION
Performance Network Governance
Technical Issues Issues Issues Issues Data Issues Legal Issues

Outages /
Interoperability / Network
availability Loss of control Security Litigation
Integration issues capacity
issues
Standard solutions Network
Vendor lock-in Recovery Liability
/ Limited features reliability
Customization? Integrity Disclosure
Legislation /
jurisdiction
issues
Compliance
Business
Continuity
HISTORY AND DRIVERS OF GROWTH OF
SOFTWARE AS BUSINESS

Compute Connect
Moore’s Law Metcalfe’s Law
Digital Future

Cloud

Gilder’s Law
SCALE AND SCOPE : INDUSTRIAL ERA
Alfred Chandler in “Scale and Scope: The Dynamics of Industrial Capitalism (1990)”
“modern managerial firm was born and evolved in order to take advantage of
productive techniques made available by the industrial revolution.”
The modern industrial firm
- multi-divisional managerial hierarchies
-uniquely able to create value and generate competitive advantage by harnessing the
new technological infrastructures of the time (such as electricity and railroads) to carry
out modern production processes.
-obtained, controlled and coordinated resources (such as high volumes of material
inputs) to process them through increasingly automated manufacturing systems.
THREE DIMENSIONS OF DIGITAL BUSINESS –
SCALE, SCOPE AND SPEED – INDUSTRIAL ERA
Scale in industrial era –
­ New markets
­ Based on access to human, physical and financial capital
­ Coca-cola, Walmart

Scope in industrial era –

­ New products
­ Expansion in brands through mfg. or acquisitions
­ P&G

Speed in Industrial Era –

­ Time to act and react / Time to market
­ Gradual increase in scale and scope
­ Traditionally - Helps you reap benefits from first-mover-advantage
THREE DIMENSIONS OF DIGITAL BUSINESS –
DIGITAL ERA
Digital era
­ Scale and Scope increase – non-linear exponential scale
­ Which is widely different from industrial era
THREE DIMENSIONS OF DIGITAL BUSINESS –
SCALE, SCOPE AND SPEED
Scale
Google - 1 billion search queries in 2012 to 2 trillion + (per year) by 2021
Uber – small set of rides in 2011 to a total of 10 billion + rides by 2021
Airbnb (started in 2008) has 150 million + users and 7 million + listings by 2021
THREE DIMENSIONS OF DIGITAL BUSINESS –
SCALE, SCOPE AND SPEED
Retail in Digital - sees the long tail effect – one or two large players and countless
niche players
Metrics comparisons between traditional players and digital players
­ McDonalds Vs.
­ Uber, Netflix, Amazon etc.
THREE DIMENSIONS OF DIGITAL BUSINESS –
SCALE, SCOPE AND SPEED
Scope
Apple
Google
Digital era – core competency is data - expansion is possible even in unrelated areas
THREE DIMENSIONS OF DIGITAL BUSINESS –
SCALE, SCOPE AND SPEED
Speed
In digital era – Fast-mover-advantage
COMBINATORIAL ADVANTAGES – SCALE, SCOPE
AND SPEED
In the digital era, scale-scope-speed are interconnected and they reinforce one
another
THEORIES TO UNDERSTAND RESPONSE TO
INNOVATION
How do firms respond?
DIFFUSION OF INNOVATIONS – EVERETT ROGERS
Innovation Development

Decision & Adoption

Individual
Organization
Government

Consequences of Adoption
Diffusion
ADOPTER CATEGORIES
DIFFUSION PROCESS
TYPES OF ADOPTION CURVES

Network Externalities
TECHNOLOGY TRAJECTORIES – GARTNER’S HYPE
CYCLE

To understand the current maturity, adoption and social application of specific technologies
2019 – 3D PRINTING
HYPE CYCLE FOR CLOUD COMPUTING
SOFTWARE AS BUSINESS
Word “Software” first coined in 1958 article by Tukey from AT&T Bell Labs
In the beginning computer was just a machine – follow instructions and perform computations
Physical machine + OS (rudimentary software was given away free)
Software was integrated with the machine
Each processor had individual assembler language -> instruction set was computer specific
1950 High Level languages like FORTRAN emerged, which could be run on different
processors
Software was unbundled
Business around Software emerged
SOFTWARE AS BUSINESS
1. Definition of Product (What)
2. Definition of Market (Why)
3. Competitiveness depends upon :
Attractiveness of Product
Efficiency and Effectiveness of the Business Processes
Abilities of the Employees
Design of the Customer Interface
UNIQUENESS OF SOFTWARE
Software is an “Intangible Economic Good”
Customer does not acquire the product when buying, but specific, precisely defined
rights of use as defined in a license or a SaaS contract
However, investment in Software represent a large proportion of spending for IT than
Hardware
Software belongs to following classic economic factors of production: capital, land,
labor and “Knowledge”
Can strongly enhance competitive advantage of a firm
Can easily be copied and circulated
UNIQUENESS OF SOFTWARE PRODUCTS
Capital Investment
Entire product cost incurred at the time of development
Minimum revenue (or minimum number of licenses must be achieved to reach the break even)
Any additional revenue beyond break-even is pure profit
International market
Requires some amount of customization of local markets – translation
Development efforts require – know-how and few PCS J. (Garage start-ups)
Low barriers of entry to market – fluidity of know-how, replication is easy
Difficult to create and protect IP
Switching costs are high for customers (integration with other systems)
UNIQUENESS OF SOFTWARE PRODUCTS
Law of Increasing Returns (Brian Arthur)
Software products with high market share experience further improvement in market
position
The Network Effects
Cost of Switching
Trust in Market Leader
“Trends in market share intensify themselves”
UNIQUENESS OF SOFTWARE PRODUCTS
Financial Life Cycle of a Software Product
Venture Capital support for initial funding
Most requirement of funding happens before the first dollar of revenue is earned
Revenue models – One Time Charges (License) and Periodic Charges (SaaS)
Growth by acquisitions
Product Sunset – retire / replace