Product Management and SaaS

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Product Management and SaaS

Today, more and more products are offered as Software as a Service (SaaS).

Is the product managers’s job the same for SaaS offering, or is it completely different than the product manager’s tasks for the traditional, non-SaaS product?

In short, we can say that the product manager’s “job description” is the same whether the offering is a traditional / on-premise one, or if it’s SaaS. In both cases, product managers are expected to understand the market needs, perform competitive analysis, define the roadmap, provide high- and low-level requirements, and define the positioning, packaging, pricing and messaging of the offering. So, at first sight, there is no difference.

 

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However, the difference lies in the CONTENT of the above tasks, the dilemmas we have to solve, and the way we do it.

Here are some points that can illustrate the above:

 

1. Product releases –

for on-premise products, we define the roadmap, with major and minor releases. In SaaS there is no reason to discuss major and minor releases – the users do not care whether the changes in the product are part of a major release or not. They don’t pay for it anyway. Once they subscribe to the service – they automatically get whatever is there. This implies that the product manager is “free” from these definitions, and can introduce any changes at any time, if these make sense.

 

2. How many releases?

How often do we make changes to the product? – For on-premise products, the answer is clear – every release, according to the release policy (normally, one to a few releases per year). For SaaS offerings, the decision is more complex. Think about yourself, as a user of Gmail or Facebook: Do you like the fact that the product changes often? Would you prefer to see less (or more) changes? The answer is tricky.

On one hand, the ability to add/change things in SaaS is great and very tempting. After all, that’s one of the benefits of the SaaS business model. On the other hand – if we change too much, we might irritate the users. Product managers should find the fine balance between the two options – and it’s not an easy job!

 

3. Pricing –

Pricing for traditional products is based on licenses. In SaaS, we use the subscription model. And on top of it, we normally offer either a free trial and/or the Freemium model. So it’s clear that the product manager’s job in determining the pricing model is very different. Just think of the Freemium model: it is the product manager’s responsibility to decide which parts of the product are provided for free, and what is “the first step” for which users will have to pay. A poor decision here can affect the company’s ability to be profitable! It could be a life and death decision.

 

4. Product infrastructure –

do product managers have to care which technological infrastructure will be used for the products? In the traditional model – the product manager has a strong say, as the customers will have to support this infrastructure and approve of it. However, for SaaS – product managers should not care. Let the R&D people make these decisions.

 

5. Simplicity –

the name of the game in SaaS is simplicity. If the product is complex to use – no one will buy or stay with it. So please, no bells and whistles – just make it simple and easy to understand with little or no training.

There are many more differences, but this list shows that even though it’s the same product manager, with the same tasks, there are significant differences in focus within each task. Does it mean that traditional product managers cannot do it for SaaS – absolutely not! They should adapt to the changes in focus, but overall their role is unchanged.

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