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11 Product Management Insights from Product Next 2018
Leading XaaS (any technology-as-a-service) businesses are certainly not for the faint of heart, and Product Management leaders are in the hot seat. As the stewards for growth and profitability for their businesses and sitting at the epicenter of impact within their organizations, the expectations are high for their strategic insights, leadership, and guidance on a wide array of topics. These topics can include complete (aka whole) offer design, maximizing monetization, effective cross-organization handshakes, product-driven growth strategies, and optimizing recurring revenue growth just to name a few.
TSIA’s Product Next conference was held in Las Vegas this past October in response to the unmet need to create a community for Product Management executives to come together on the business of Product Management. It was a summit like no other with an agenda uniquely focused on the challenges and successes Product Management leaders encounter on the journey to growing, scaling, and transitioning to technology-as-a-service businesses.
I learned a lot from the great speakers and panelists, from big picture thoughts to immediately actionable tactics. In no particular order, here are just a few gems.
Thomas Lah, TSIA’s executive director, unveiled key research on this topic, characterizing the industry and demonstrating the proven connection between deep verticalization and profitability. He outlined a method to understand and characterize your own business’ vertical posture and demonstrated how to “Improve Your Company’s Vertical Leap” in this keynote replay.
As companies look to design “complete” offers with a combination of technology and services, a few companies are unifying technology product management and services portfolio management. Others are importing former customer-facing leaders into Product Management to ensure deep customer knowledge and customer empathy. The panel session, “The Rise of Services: Silos, Collision or Harmony?” included leaders from Ciena, Gainsight, and SeaChange International, and was a great discussion of how some organizations are addressing this potential emerging trend in XaaS.
While it does not have the same “shiny object” appeal as new technology innovations, bringing the traditional back office functions like purchasing, billing, legal, entitlement, and provisioning to the forefront, and automating for scale is a critical part of any SaaS business. It’s an area that deserves special attention. Satya Jena, VMWare’s senior director of SaaS platform and monetization product management, is focused on this and shared his experience and learning in his breakout session, “The Power of Consumption-Based Monetization,” which conference attendees and TSIA members have access to.
Product managers have been long time pegged as the “mini CEO of their product”, however for XaaS businesses this is imperative, given that not just revenue growth, but operational scale and profitability are all driven by the product management strategy. Andrea Morgan, the global vice president of IBM, made a compelling case for this in her session, “IBM: The Path to Digital Reinvention,” where she discusses IBM’s journey. Conference attendees and TSIA members have access to the slides from this presentation.
Deeply understanding the customer journey is a first step in pursuing scale with a product-led growth strategy. However, just 36% of Product Management teams are engaging in the practice. Customer journey mapping has long been the purview of services functions. Why? Because even traditional tech support organizations have long known that they must understand and improve the customer engagement experience to have any hope of reviewing their service contracts. Product Management can learn a lot from them!
Guess what? Data-driven decision-making needs data! Unfortunately, it’s a minority practice for B2B enterprises to instrument their products to capture usage and use resulting analytics for decision making. This applies to born-in-the-cloud companies as well as traditional technology companies. Claudia Chandra, VP Product Management, Cloud Services and Analytics showed how Informatica is cracking this nut for the benefit of the business as well as deliver value for customers in her session, "The Journey Towards a High-Value Data-Driven Customer Experience."
With 70% of enterprise product managers spending little to no time with customers and 62% of customer success managers (CSMs) being solely responsible for onboarding and other customer engagements, there’s opportunity for mutually beneficial collaboration. Product management VPs Denise Stokowski and Minh Phan from Gainsight share their approach to optimizing this relationship for the benefit of the business in, “Product Management + Customer Success: The Makings of a Beautiful Partnership.”
A full 70% of the companies represented at the conference are considering acquisitions or being acquired. It’s interesting to note that Oracle has recently purchased no less than 26 SaaS or cloud infrastructure companies in the last 5 years as they pursue a full cloud fueled SaaS business model. Are organic business model transitions that hard?
Companies with high-performing DevOps teams have a higher employee net promoter score (NPS) at 2.2X and 50% more market cap growth. Product leadership is in a great position to influence the effectiveness of this value stream. Author, Researcher, and Founder of IT Revolution, Gene Kim, discusses the results of multi-year research of over 30K DevOps practitioners in the video session capture, “Product Management & DevOps: A Winning Partnership.”
This one is pretty shocking when you think about as pricing in XaaS has more influence on business profitability than customer retention, yet companies spend little to no time on defining an effective pricing strategy. XaaS Product Management leaders are keen to figure out how to get this right for their business. Lillian Bacher of Profitwell shares more shockers in her talk, “XaaS Pricing: Avoiding the Pitfalls and Optimizing for Profit and Growth.”
Lastly, I presented a keynote where I referred to XaaS Product Management leaders as the new Chief “Profitable” Revenue Officers. Decisions made in Product Management has an impact on the revenue, on the scalability, and on the profitability of the XaaS business. This is significantly truer than when technology was sold as an asset; a time when what Product Management defined and built had way less bearing on the cost of goods or the cost of sale. I made the case for companies to pursue a product-led growth strategy in my session, “The Changing Role of Product Management in the World of XaaS”.
I could go on. There were so many great conversations fueled by the content that was presented from all mentioned above in addition to great speakers and insights from Aha!, Autodesk, Axway, JDA Software, Microsoft, and TSIA. As the host, I am very grateful and humbled by the community that gathered and the sharing that resulted. The post-conference feedback from the executives in attendance was quite gratifying including quotes like:
“Everything was extremely valuable.”
“I loved the focus on strategy.”
“Great hearing from peers on their experiences and best practices.”
“This will be my go-to conference for product management.”
So, when is the next Product Next event you ask? Well, we get to do this again May 6-8, 2019 in San Diego. By popular demand, the Product Management community will now have their own content track at Technology & Service World, TSIA’s twice yearly conference. Come join the conversation and stay current on the latest trends impacting the business of product management!
Post Date: December 6, 2018
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Laura Fay is the vice president and managing director of offers research and advisory for TSIA. She also serves as TSIA’s vice president of XaaS product management research. Laura is a technology industry veteran with over 30 years' experience driving business growth in the enterprise technology industry via leadership roles in product management, general management, product development, and customer success.
The Technology Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.