Tag Archives: product

Product company or services company?

The question came up during a conversation recently – do I work for a product company or a services company?

Historically, technology “product” companies – those that produce one or more standard applications that can be used by many different customers – are seen as having more value in the marketplace than services companies. A product may be sold again and again (goes the thinking), continuing to leverage and profit from the initial work that went into its creation. A company that provides services must tailor their offering to each client, leading to fewer options for scalability over the long term.

But just because you make something does not mean people will come.

The last 40 years are littered with instances of great products (do I even need to say Betamax?) losing out to others that are not as good but cheaper, marketed more effectively – and today I would add – easier to tailor to your own needs.

Everyone’s getting used to being able to do whatever they want with their consumer products and software, so it’s inevitable that they should start to have the same expectations in their work environments.

But personalizing for business is a little more tricky. Everyone has to adopt a solution in order for the business to realize the proper return on investment, but how do you allow everyone to do what they want while maintaining some order?

To get to full adoption, the seller of a business product has to understand the whole business and provide the services necessary to create value for everyone. Otherwise the awesome product you sold your client ends up a bit like a paperweight – an executive decoration that doesn’t offer any real return.

So the question really isn’t “product company or services company?”

It’s how much service does your product company need to provide to make sure your clients realize the full value of what they’ve purchased.

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