Evolution of Product Management in a Cloud Services Company

The constantly increasing buzz around Cloud Computing/Services/Delivery has implications on traditional Product Management and the function needs to evolve to incorporate this new delivery model. Irrespective of whether your product/company has any plans to move to the cloud, there are certain key points which need to be delved into. We will try to to explore which major areas are impacted and how Product Managers need to start thinking in certain new directions.

Definition

First and foremost is the definition of Cloud-based services. There are innumerable definitions out there and each company I interact with, the definition seems to be something different. ISVs and Vendors are taking advantage of this fluidity in the definition or rather the lack of it to join the Cloud band-wagon and term their offerings as cloud-based further confusing people. The US-based agency, National Institute of Standards and Technology (NIST) has a definition which tries to provide a single umbrella to all definitions and their interpretation can be read here which is more or less what we will follow for our subsequent discussions. Note that in the definition, there is no mention of Cloud Services being available only through the Internet because of which now some companies have started terming traditional Voice-based hosted services like Audio-conferencing as Cloud Services!!! For our discussions though, we will stick of the NIST definition and restrict ourselves to Internet-based services which the NIST definition implies indirectly

Adoption

Before following the crowd into moving your product into a Cloud-based model, there are two key points to keep in mind as a Product Manager.

• After the internalization of the essential characteristics of Cloud Services (from above definition) and how it applies to your product, it is important to see if your customers and your prospects are asking you to deliver your product on a Cloud-based model. Even if your customers are demanding you to deliver you product through the Cloud model, it is important to check what their definition and expectation are from a Cloud-based model. In the current infancy stage, it is highly probable that all your customers are expecting is a “Managed Services” model where they do not have to incur Capex by investing all money upfront and would rather pay you in a Opex mode. In such a case, the more compelling need of the customer is business-related and this may not necessarily have any impact on the product or its features. Be clear on what the expectations are from your target base before deciding to adopt the Cloud-delivery model
• This point may sound completely controversial, but I believe that Cloud-based model will follow a cyclical model similar to Outsourcing business (Outsource-Captive-Insource-Outsource).While enablers of Cloud like virtualization will be constant factors, services will follow a model where companies move from private clouds to public clouds and back. This will be especially true in case of software applications where the enterprise needs are so diverse and customized they will probably never be a stage where all Software applications will completely reside on a public Cloud Services model. Highlighting whether your product is better off in a non-cloud model not just today, but even tomorrow is probably a direction in which you should delve deeply before reaching any conclusion.

Having said that, it is time to move to those points which need to be specifically considered for a Cloud-based Product by a Product Manager.

Additional Responsibilities of Product Manager

Each point below outlines the incremental responsibilities a product manager must bear or have a significant involvement as part of the product responsibility -:

• Pricing: Product Pricing is an entire subject by itself but in hi-tech product management, Product Managers are most often (and correctly so) not involved in the process. However, in Cloud-based services, pricing is an integral part of the product. Pricing takes multiple forms — monthly-based, transaction-based, volume-based, freemium etc. and this has huge implications on the way the product is presented to the end user. This part is large enough to merit a separate discussion
• Support: The barrier of entry for Cloud Services is low, but so is the barrier for exit. The typical monthly pricing models of Cloud Services ensure that the customer does not invest too much money upfront for the Product. (A company may incorrectly) choose to increase the exit barrier for the customer by not allowing easy data migration out of the service but this will rebound with prospects either not choosing the service in the first place or customers creating negative publicity about the product). Cloud Services comprise a huge Support component in addition to the “Product” component. It is such an integral part of the user experience that the Product Manager has to treat the Support part as a feature of the product. There are also a few areas which might seem to fall more under the Engineering team but which a Product Manager should be aware of and be able to influence. These include availability, scalability, latency (based on location), Last Mile bandwidth constraints, browser-compatibility etc. We will discuss some of these points as part of a later post where we will discuss Customer Support.
• Customisation: A Cloud-based service needs to be generic enough to accommodate most needs of most your customers and yet it needs to be easily customisable in a multi-tenant model. It needs to have advanced features for your power users (who will probably be higher revenue customers) and at the same time provide some features free of costs for easy adoption. Stripping down your product to the bare essentials and understanding what not to deliver is perhaps more challenging than adding new features
• Web Analytics — When your entire product is web-based and over the internet, a key component is understanding your users/visitors’ behavior on your site. This goes beyond just selection of a web-analytics tool but is more strategic in nature. The right metrics, selection of the right tool etc. are various aspects where the Product Manager should be involved as this will provide another source of user behavior for Product feedback
• Social Aspects- With social networking increasingly gaining mindshare, it is being increasingly used in by companies as a Version 1.0 product requirement. I have my apprehensions here- unless there is an extremely strong reason or logical alignment of your existing product with some social networking feature, you need to reduce the visual overload for your end user. For example, having federated identity in a B2C site with existing providers like Yahoo, Gmail, Facebook makes ample sense, but the same will not fly with a B2B site. This is a simplistic example but the point being highlighted is that Social Networking as a hygiene factor does not make sense till it is really important. Another dimension to think along is managing the social community of your product if relevant. If your product does need a social community, to need to ensure you can nurture it in the early stages and then manage it as the community takes over. This will act as a huge marketing division for your product and the Product Marketing Manager should have a direct role in overseeing this area.