Lecture 1
SDPM is structured out of two components:
- Software Product Management (SPM)
- Software System Development:
• Product development
• Project management
Software as a business is a high-risk business because of the high speed and rapid
succession of technological changes.
- High failure rate among start-ups
- High return when successful
Revenue models in software products:
- One-time charge model: pay once, before you use the product → Short payback
period.
- Periodic charge model: pay periodically for a product, e.g. license/subscription fee,
transaction fee. → opportunity for high customer loyalty.
- Advertising: fees from advertisers
- Affiliate: fees for business referrals
Difference product and software product:
- Product: combination of goods and services, which a supplier or development
organisation combines in support of its commercial interested to transfer defined
rights to a customer
- Software product: product whose primary component is software.
Types of software products:
- Embedded software: software parts of software-intensive systems that are not
marketed and priced as separate entities
- Original Equipment Manufacturer (OEM) software product: software product of
software vendor A that is used by company B as a component under the covers of
one of B’s products.
- Solution:
• A product that is a combination of other products, human services and
possibly some customisation or;
• A combination of products and customer-specific code that is developed and
implemented for a specific customer
- Product platform: the technical foundation on which several software products are
based
- Product family: a group of software products that are marketed as belonging
together under a common family name. Example: Microsoft Office.
, - Product line: a set of products based on a common platform with defined (static or
dynamic) variability tailored to different markets and users.
- Cloud computing: service and delivery model for the provisioning of IT components
through the internet based on an architecture that enabled a high level of scalability
and reliability.
• IaaS: Infrastructure as a Service, processor capacity or storage
• PaaS: Platform as a Service, IaaS + enabling products like database
• SaaS: Software as a Service, PaaS + application software
Types of products or services:
- Financial products: for example cash and other assets
- Physical products: real, durable and non-durable goods
- Intangible products: for example software, but also other intellectual property,
knowledge and brand image
- Human services: people’s time and effort
Archetypes: basic patterns of doing business. Four types:
- Creator: designs and/or produces a product sold to customers
- Distributor: buys a product and provides the same product to customers
- Lessor: provides the temporary right to use, but not own, a product or service to
customers
- Broker: facilitates the matching of potential buyers and sellers.
Difference between professional service versus a product business:
Professional service: development of customer-specific software → focus is on projects and
employees that deliver the service instead of the software product.
Service business Product business
Focus Customer Market
Project Product
Financial model Small investment Significant upfront investment
Low risk (for provider) Higher risk (for provider)
Continuous moderate profit Potentially high profit
Price calculation Cost-based (cost + margin) Value-based
Existing software usually Software products usually priced
included separately from services
KPI Utilization Market share
Average daily rate Profit
Market evaluation Moderate Much higher
Open Source: everyone can use it, but there are still clear ownership rules.
Three types of free commercial products:
- Freeware: product that is free to use
- Trialware: product with a demo version that is free, after free trial runs out or you
want to full product, you need to pay.
- Upgrade-ware (Freemium): user can use product for free, but as soon as they want
extra features, they need to pay.
,Rating startups:
Relative market share
High Low
Market High Question
Stars
growth marks
rate Low Cash cows Dogs
There are 4 main areas of attention in software product management:
- Portfolio management: having only one type of business (only cash-cow or question-
mark) is bad. There needs to be a balance. To improve:
1. Market analysis
2. Partnering & contracting
3. Product lifecycle management
- Product planning: when are you going to invest in what? → Larger scale than release
planning. To improve:
1. Roadmap intelligence
2. Core asset roadmapping
3. Product roadmapping
- Release planning: related to product planning. Once a product has been released,
we go to release planning. To improve:
1. Requirement prioritisation
2. Release definition
3. Release validation
4. Change management
5. Build validation
6. Launch preparation
- Requirements management: the key to the question: are we on the right track?
What does the customer want? To improve:
1. Requirement elicitation
2. Requirements definition
3. Requirements structuring
The software product management framework:
, Four software product scenarios:
Life cycle phase
New product Existing product
development evolution
Vendor-
Powerboat Speedboat
Runtime controlled
environment Customer-
Icebreaker Cruiseship
controlled
Powerboat (question mark): focuses on defining the minimum viable product for the first
customer → launch a new product as fast as possible.
Speedboat: focuses on extending the product scope, increasing the target market → the
product is already there, keeping the speed high with new releases. Ongoing analysis of
actual usage of the product, the market and the competition.
Icebreaker: focuses on defining the minimum viable product for the first customer, with
extensive domain analysis with potential customers and planning of the first release
(product introduction) → customer is in charge, telling the developer what they want. It’s
more controlled than powerboat → want to break the ice of the market first.
Cruise ship (cash cow): focuses on extending the product scope, increasing the target
market. Customers don’t want to test and install new releases. Often the frequency of
releases is low → one or two per year.
Objective of SPM: achieving sustained success over the life cycle of the software product.
Software needs to be sustainable. Success can be economic or measured by customer
satisfaction. Economic → conflict between product management (long term focus) and
executive management (short term focus).
Legacy system/business: trying to do anything to keep something alive even though it’s
worth it.
Lecture 2
Agile method: do not have the end-product in mind, maybe only very rough. Create very
small concrete image of first functionality, put into the market, ask what the market thinks
about it.
Product vision: direction for the future of the product, to keep the product team aligned.
The product name is the internal and external identifier of your product (= the face). The
product vision contains:
- Conceptual image of what the future product will be
- The customer value proposition, which says why the product is need and cannot be
replaced by an alternative
- The business value for the vendor → why it will be successful
Customers:
- Aren’t always the users → parents can buy a phone for their children, the customers
are the parents and the users are the children.
SDPM is structured out of two components:
- Software Product Management (SPM)
- Software System Development:
• Product development
• Project management
Software as a business is a high-risk business because of the high speed and rapid
succession of technological changes.
- High failure rate among start-ups
- High return when successful
Revenue models in software products:
- One-time charge model: pay once, before you use the product → Short payback
period.
- Periodic charge model: pay periodically for a product, e.g. license/subscription fee,
transaction fee. → opportunity for high customer loyalty.
- Advertising: fees from advertisers
- Affiliate: fees for business referrals
Difference product and software product:
- Product: combination of goods and services, which a supplier or development
organisation combines in support of its commercial interested to transfer defined
rights to a customer
- Software product: product whose primary component is software.
Types of software products:
- Embedded software: software parts of software-intensive systems that are not
marketed and priced as separate entities
- Original Equipment Manufacturer (OEM) software product: software product of
software vendor A that is used by company B as a component under the covers of
one of B’s products.
- Solution:
• A product that is a combination of other products, human services and
possibly some customisation or;
• A combination of products and customer-specific code that is developed and
implemented for a specific customer
- Product platform: the technical foundation on which several software products are
based
- Product family: a group of software products that are marketed as belonging
together under a common family name. Example: Microsoft Office.
, - Product line: a set of products based on a common platform with defined (static or
dynamic) variability tailored to different markets and users.
- Cloud computing: service and delivery model for the provisioning of IT components
through the internet based on an architecture that enabled a high level of scalability
and reliability.
• IaaS: Infrastructure as a Service, processor capacity or storage
• PaaS: Platform as a Service, IaaS + enabling products like database
• SaaS: Software as a Service, PaaS + application software
Types of products or services:
- Financial products: for example cash and other assets
- Physical products: real, durable and non-durable goods
- Intangible products: for example software, but also other intellectual property,
knowledge and brand image
- Human services: people’s time and effort
Archetypes: basic patterns of doing business. Four types:
- Creator: designs and/or produces a product sold to customers
- Distributor: buys a product and provides the same product to customers
- Lessor: provides the temporary right to use, but not own, a product or service to
customers
- Broker: facilitates the matching of potential buyers and sellers.
Difference between professional service versus a product business:
Professional service: development of customer-specific software → focus is on projects and
employees that deliver the service instead of the software product.
Service business Product business
Focus Customer Market
Project Product
Financial model Small investment Significant upfront investment
Low risk (for provider) Higher risk (for provider)
Continuous moderate profit Potentially high profit
Price calculation Cost-based (cost + margin) Value-based
Existing software usually Software products usually priced
included separately from services
KPI Utilization Market share
Average daily rate Profit
Market evaluation Moderate Much higher
Open Source: everyone can use it, but there are still clear ownership rules.
Three types of free commercial products:
- Freeware: product that is free to use
- Trialware: product with a demo version that is free, after free trial runs out or you
want to full product, you need to pay.
- Upgrade-ware (Freemium): user can use product for free, but as soon as they want
extra features, they need to pay.
,Rating startups:
Relative market share
High Low
Market High Question
Stars
growth marks
rate Low Cash cows Dogs
There are 4 main areas of attention in software product management:
- Portfolio management: having only one type of business (only cash-cow or question-
mark) is bad. There needs to be a balance. To improve:
1. Market analysis
2. Partnering & contracting
3. Product lifecycle management
- Product planning: when are you going to invest in what? → Larger scale than release
planning. To improve:
1. Roadmap intelligence
2. Core asset roadmapping
3. Product roadmapping
- Release planning: related to product planning. Once a product has been released,
we go to release planning. To improve:
1. Requirement prioritisation
2. Release definition
3. Release validation
4. Change management
5. Build validation
6. Launch preparation
- Requirements management: the key to the question: are we on the right track?
What does the customer want? To improve:
1. Requirement elicitation
2. Requirements definition
3. Requirements structuring
The software product management framework:
, Four software product scenarios:
Life cycle phase
New product Existing product
development evolution
Vendor-
Powerboat Speedboat
Runtime controlled
environment Customer-
Icebreaker Cruiseship
controlled
Powerboat (question mark): focuses on defining the minimum viable product for the first
customer → launch a new product as fast as possible.
Speedboat: focuses on extending the product scope, increasing the target market → the
product is already there, keeping the speed high with new releases. Ongoing analysis of
actual usage of the product, the market and the competition.
Icebreaker: focuses on defining the minimum viable product for the first customer, with
extensive domain analysis with potential customers and planning of the first release
(product introduction) → customer is in charge, telling the developer what they want. It’s
more controlled than powerboat → want to break the ice of the market first.
Cruise ship (cash cow): focuses on extending the product scope, increasing the target
market. Customers don’t want to test and install new releases. Often the frequency of
releases is low → one or two per year.
Objective of SPM: achieving sustained success over the life cycle of the software product.
Software needs to be sustainable. Success can be economic or measured by customer
satisfaction. Economic → conflict between product management (long term focus) and
executive management (short term focus).
Legacy system/business: trying to do anything to keep something alive even though it’s
worth it.
Lecture 2
Agile method: do not have the end-product in mind, maybe only very rough. Create very
small concrete image of first functionality, put into the market, ask what the market thinks
about it.
Product vision: direction for the future of the product, to keep the product team aligned.
The product name is the internal and external identifier of your product (= the face). The
product vision contains:
- Conceptual image of what the future product will be
- The customer value proposition, which says why the product is need and cannot be
replaced by an alternative
- The business value for the vendor → why it will be successful
Customers:
- Aren’t always the users → parents can buy a phone for their children, the customers
are the parents and the users are the children.
