Productization: Transforming from developing custom software to standard product software (validation)

Abstract

There are two types of businesses that we know in the Software industry: Service businesses that develop customized software based on the customer specific needs and Product businesses that develop standard software based on the market needs. Software product businesses can sometimes switch to service business when their product sales start to decrease on the market however it is indicated quite challenging to switch from service to product business. The productization process enables the companies to transform themselves from service to product business. This study aims to validate to what extent this process is applicable in a service-oriented business.

The research presents different results captured based on an assessment of seven products on the productization process in an IT service business. The first result concerns all the common characteristics between service and product businesses from societal, marketing and sales, company and development perspectives. These characteristics enabled us to identify the additional dimensions for and to bring improvements in the productization process. The second result concerns the application of productization approach, which consists of certain steps in order to give specific recommendations for each of the analyzed products on how to become market-oriented. Third result is related to the calculation of the average percentage on how mature the products were in their product management practices and identifying thereby the strong and weak areas per SPM focus area. Fourth result is the reflection and interpretation of multi-dimensional productization profile of certain products based on their specific situation. The fifth result is the analysis of all the situational factors of the products, where we identified some concrete differences and similarities based on their current environments on their way to become market-oriented. Finally, some specific recommendations have been provided on becoming market-driven based on the assessment results of the seven analyzed products.