Building a Service–Not a Product

Many software providers would view themselves as being in the business of creating products. And, in many respects, this aligns well with their business model. The mindset here is focused on a pattern where we build something, the customer acquires it, and it’s, for the most part, theirs to use. There are plenty of permutations and nuances within this product-centric model, but they all gravitate toward a model that is focused on creating something more static and having customers buy it.

In this product-focused mindset, the emphasis is generally on defining the features and functions that will allow a software provider to close gaps and land new opportunities. Now, with SaaS, we shift from creating a product to creating a service. So, is this just terminology or does it have a meaningful impact on how we approach building a SaaS offering? It turns out, this is certainly more than a terminology shift.

When you offer software as a service, you think differently about what success looks like. Yes, your product needs to meet the functional needs of your customers. That dimension of the problem doesn’t go away. As a service, though, you are much more focused on the broader customer experience across all dimensions of your business.

Let’s look at an example that better highlights the differences between a service and a product. A restaurant provides a good backdrop for exploring these differences. When you go out to dinner, you’re certainly looking forward to the food (the product in this example). However, the service is also a part of your experience. How fast you’re greeted at the door, how soon the waiter comes to your table, how soon you get water, and how quickly your food arrives are all measures of your service experience. No matter how good the food is, your quality of service will have a lot to do with your overall impression of the restaurant.

Now, think about this through the lens of a SaaS offering. Your SaaS tenants will have similar service expectations. How easily they can onboard your solution, how long it takes to realize value, how quickly new features are released, how easily they can provide feedback, how frequently the system is down–they are all dimensions of a service that must be front-and-center for SaaS teams. Having a great product won’t matter if the overall experience for customers does not meet their expectations.

This takes on extra meaning when software is delivered in a SaaS model, where the tenant’s only view of your system is the surface of your SaaS solution. SaaS tenants have no visibility into the underlying elements of your system. They don’t think about patches, updates, and infrastructure configuration. They only care that the service is providing the experience that lets them maximize the value of your solution.