As the life cycle of technology accelerates, solutions move to the cloud, and security vulnerability becomes a top concern. As a result, many technology providers are faced with the challenge of upgrading existing customers from legacy offerings to either a newer edition of the same product or a completely new offer. These upgrades can be challenging for multiple reasons and are particularly prickly for on-premise technology providers. Some of the business challenges with upgrades include:
- Active resistance from customers.
- Lack of customer readiness (e.g., their deployment environments or the available personnel to handle the upgrade).
- Financial impact to the vendor to support outdated technologies.
- Security vulnerabilities of older technologies.
- Support organizations incentives not aligned with the product strategy (i.e., being accountable for a revenue number while the business wants the customers on the latest product revisions).
- Sales and service motions are not optimized to execute the upgrade plan.
- Identifying which customer segments to upgrade when.
This paper will provide framing for how a technology provider can segment their existing install base for effective upgrade or upgrade execution. It covers the following topics:
- The cost of kicking the can down the road.
- The carrot and the stick of customer upgrades.
- Three types of transition.
- Segmentation steps for a tolerable transition.