Solutions Products vs. Solutions Marketing

Article by Martina Lauchengco and Marty Cagan

We realize that most of our topics concern the development of Internet services, and mostly consumer internet services at that. But many product managers out there are working hard on other types of software products, such as enterprise or infrastructure software, both shipped software and hosted services.

One product area that seems to be a long-standing source of confusion for those in these spaces has to do with what are referred to as solutions products and the associated solutions marketing. Just as many companies stretch the truth to call their products a “platform,” many other companies like to claim their product is a “solution” even when it’s not.

The concepts of platform and solutions are both important and powerful, and those products that aren’t really up to the standard just dilute the meaning for the rest and confuse the market.

Before defining a solutions product, let’s first be clear on what constitutes a product in general. This may sound basic, but much software is not actually a “product” at all.

Here is how we characterize a product:

– people will pay for it; it delivers real and distinct value (and typically has it’s own SKU). Note that sometimes people pay by tolerating advertising, or by paying for support and not license fees, but one way or the other they’re compensating the provider.

– it works well in multiple customer installations. The point here is that it’s not a special; this is not custom software.

– your field and/or channel can effectively sell it. You provide the necessary sales tools and sales training.

– your company will stand behind it, providing support and adding improvements as necessary.

– your customers and/or channel and/or services partners know how to install, configure and customize the product.

You might argue that what we’re defining here is not just a product, but a certain quality of product. And we think that’s true. We consider software, even software produced by a product organization, to be just a wanna-be-product if it’s not yet being successfully used by multiple customers. In a sense, the software has to prove its right to be considered a product. Much like a platform that does not have any applications running on it isn’t really much of a platform.

Now, here’s how we describe a solutions product:

A solutions product has all of the characteristics of a “product” above plus:

– the software solves a business-level problem, often for specific industry verticals.

– the product may be based on an integration of one or more component-level products, which may come from your company or from partners, and they are pre-integrated.

– if appropriate, the product is certified with partner’s products as necessary (the customer needs to know the supported configurations).

We like solutions products because they speak directly to a business-level problem or need. In general, customers care much less about the underlying technology you use (other than early adopters), and more about whether you really solve their business problem. Your business problem might be disaster recovery, customer relationship management, or Sarbanes-Oxley compliance. But it isn’t what flavor of the operating system is used, or what type of router you select.

Note that there are some solutions products that are turn-key, and others that require professional services, and solutions products can be for any size customer from a single consumer to the largest enterprise, and also the software may be shipped (installed) software, or software as a service.

But it’s also important to point out what a solutions product is not:

– a set of instructions for how to use an existing product in a new way (customer’s won’t pay for that)

– a set of customizations/scripts from the field or other external source (not supportable)

There are many field or marketing organizations out there where they clearly see the customer demand for true solutions, but their product organization only provides the underlying component products, and they are often tempted to get creative and try to cobble together something that they hope they will have better luck selling. But while this might buy you a little time, as soon as a competitor comes along with a true solutions product the customer can easily tell the difference.

Related but the not the same as solutions products is solutions marketing. We also like solutions marketing over other forms of product marketing because solutions marketing:

– speaks to the business-level problem, aligning products with business value

– speaks to vertical industry segments, aligning value with a particular industry’s more specific and sometimes regulated needs.

– showcases live customer success stories in action, in order to prove the business value

– shows how to leverage products, professional services and business process knowledge or best practices to achieve business results

To us the trend is very clear and has been underway for several years. Increasingly customers are demanding products that directly address business-level needs, and they’re less interested in reading and comparing a data sheet of technical specs. Good solutions products and solutions marketing speak directly to these business needs.