Category Archives: product lifecycle

Remember the song “Steam Heat”?

There was a famous Broadway musical back in the 1950s (and NO I am not old enough to remember it from back then!) called Pajama Game.  The show stopping number was called Steam Heat — and the number and show helped to make Shirley Maclaine a star!

These days the word “steam” evokes a whole different image.  Ask my son who is the expert on all things gaming (as are most teen boys).    Steam is a platform developed by Valve Corporation.  It lets users download games (and in October 2012  Valve expanded the service to include non-gaming software).  In our tech world, Steam gives access — digital distribution, digital rights management, multi-player and communications.

If you haven’t heard of Steam before — it will probably become part of your life in the near future.

Remember the X-Box from Microsoft?  The X-Box (the current one is called the X-Box 360) is a video gaming brand created by Microsoft. It includes a series of video game consoles, the latest of which will be the X-Box One.   Kids all over the world love the X-Box because they can not only play games on it, but they can play games with others from around the world using something called X-Box Live.  Xbox Live costs about $60 a year and for that fee you subscribe to a service  that lets you stream multimedia content from PCs, purchase and stream music, view TV programs and films through the Xbox Music and Xbox Video services, along with access to third-party content services through third-party media streaming applications.  Microsoft does offer a free X-Box Live, but functionality is very limited — it lets you get to the store so you can actually pay for stuff (hmmm, and the ability to shop is free, how ironic is THAT?) and you can play demo games to see if you want to buy them.   As I said the free version is very limited.

X-Box took over the gaming world in a big way — thanks in large part to the multi-player gaming abilities of X-Box Live (not to mention some killer shooting games). . .   But thanks to Steam this reign may be about to end.

Steam now has more than 65 million active accounts.  65 million!  This is a 30 percent rise in players in just the last year.  On any given day Steam may have more than 6 million concurrent users.  Microsoft’s X-box Live has 48 million accounts — around half of whom reportedly paid extra for a gold subscription.

Steam has 17 million more accounts than Microsoft’s X-Box Live!

I can almost hear 17 million voices crying out “In your face Microsoft!”

Poor Microsoft, once the king of technology the iPad and Google Android tablets are sucking life out of its key computing model, and now Steam is taking a bite out of its lauded gaming throne!

Steam is not new.  Steam has been around for 10 years.   There was a time I hated Steam because of the complexity it took to download games — if they even worked at all after you went through the trouble to download Steam and then download a game. . .

Ten years is a long time in tech years.  Most tech companies who survive that long have come to prominence and then decline — if they ever became a leader in the first place.

The success of Steam in keeping up with technology and even leading it contrasted with so many high tech companies who lay in the graveyard of technology past brings to mind Crossing the Chasm by Geoffrey A. Moore and Regis McKenna.    The concept of the chasm of dead products that either never make it to main stream or hit it and then rapidly die out was brilliant.  Moore and McKenna said there is a chasm between the early adopters of a new technology product, mainstream users — and then finally the late adopters.    In the “old days” a product could be designed and last a lifetime (more than a lifetime — think of something like a shovel or a hammer — how long have those tools been around).  Now think about how Math technology went from a slide ruler to a calculator to Lotus 1-2-3 to Microsoft Excel to an app on your cell phone or tablet. . .   That product life cycle just gets faster and faster — and companies rise and fall so rapidly it makes your head spin!

Valve is innovating so it shouldn’t fall into the chasm any time soon.  Valve (owner of Steam) announced a new operating system.  SteamOS is a Linux-based (bypassing Microsoft) operating system — a navigation solution for gaming PCs in the living room.  It can be installed on any PC (and it’s free).   SteamOS will be the operating system powering the physical Steam Machines that Valve will soon be shipping to eager gamers.  The Steam Machine is supposed to be its ability to stream games from your regular gaming PC to any TV.

Valve also announced a new game controller.  The Steam Controller has two clickable high-resolution circular track pads with haptic feedback, which supposed to be precise enough to match gaming keyboards and gaming mice.

Time will tell if Steam will continue to steam roll over its competition — but our high tech world keeps on a changing!

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Automating Product Management (PLM) — Failure?

Product management is a high wire act that requires two skills that seem opposed to each other.  On the one had a product manager must be artistic and innovative — able to spot trends, articulate the value to the market and envision the marketing plan.  On the other had the role is very focused on the minute — ensuring that engineering is day by day fulfilling the requirements.

From identifying problems to be solved by the new product (or solution), to competitive analysis, to product roadmaps and strategy there are definite touch points in product management that have to follow along a project management type timeline.  Pragmatic Marketing has famously articulated the steps common to the process in their Framework.

The functions of the job are normally tracked with Microsoft Office applications including Project, Excel and even PowerPoint and Word.   This means difficulty in keeping the various sources in sync and reinventing the templates for each new release and offer.   The seeming answer to the problem was a new class of software called PLM (product lifecycle management).  Just as ERP (Enterprise Resource Management) automated the back office functions including finances and CRM (customer relationship management) automate interfacing with customers, PLM seemed like a brilliant solution that was desperately in need.

In a nutshell, PLM helps manage the entire lifecycle of a product or service from idea, through market analysis and need analysis and into design and manufacture, then to service and disposal. PLM connects people responsible in each steps as well as tracking necessary data, processes and business systems.  In other words PLM automates and provides a product information backbone for the product development and delivery process.

By helping to automate, streamline and track the process of product development costs are reduced, time to market shortened and over all over sight and tracking greatly improved.  The cost to implement is paid back quickly (if PLM is implemented properly), so this seems like a holy grail for product management.

So why is IBM abandoning ship?

IBM jus sold its PLM offering to Dassault Systèmes (DS).     Sure, IBM says this is a strategic move and that DS is a partner — but since IBM has been a market leader in PLM does IBM see the handwriting on the wall?  Is PLM an idea that just did not make it?

CIMdata,  a PLM Consulting firm, writes that the PLM market grew 6.7% in 2008.   That was the good news.  CIMdata repoted that in 2009 PLM experienced a  12% decline!  Revenue went from $15.96 billion in 2008, to $14.03 billion in 2009. This decline was larger than originally forecasted.

I’m not heralding the death of PLM.  I’m a big proponent.  It helps to standardize the process across product managers and indeed the entire organization.  It is very cost effective.  Still, is the sale of the IBM offering the canary in the coal mine?  (Miners used to bring canaries into the mine with them and if the bird died they knew the air quality was declining, and left before they died themselves).

CIMdata states that the 2009 information is preliminary and reflects currency exchange rates—primarily the euro versus the dollar rather than a real decline in sales.  CIMdata’s preliminary estimates indicate that investments in all sectors experienced declines in 2009 over 2008.

Is that true or is it trying to cast a good light on a bad revenue stream?  CIMdata report (in their press release):

“Comprehensive cPDm dropped to $2.7 billion, a 10.9% decrease. Investments with cPDm Systems Integrators/VARs/Resellers decreased 10.6% to $3.87 billion. Digital Manufacturing investments declined 12.7% to $445 million. Multi-Discipline MCAD dropped 12.4% to $2.57 billion, while investments in Design-Focused MCAD declined 20% to $1.83 billion. The Simulation and Analysis sector of the Mainstream PLM market experienced a more modest decline of 6.4% to reach $2.13 billion in 2009 while Non-Bundled NC had a 19.1% decline to $475 million. The distribution of these investments as components of the full Mainstream PLM market is illustrated in Figure 1.:

Figure 1—2009 Mainstream PLM Market Sector Distributions (Millions)
(Market information represents CIMdata’s estimates)

“Mr. Amann commented, “While 2009 reflected a downturn in new PLM investments, companies retained maintenance and continued to spend on services in support of PLM activities already underway. Continuation of PLM programs indicates that more companies recognize the value that PLM provides in helping them maintain their competitive position during difficult economic times. Hardest hit were small- to medium-sized businesses who tend to be more subject to credit and cash flow issues. Many small companies had to stop their PLM investments while larger enterprises had the resources to sustain programs that were already underway.”

“Ed Miller, CIMdata President stated, “Even in economic downturns, those companies that sustain investments in PLM can become more efficient both by reducing cost and better leveraging existing resources. Importantly, investing in PLM helps position companies to develop and deliver market-leading products as the global economy improves.””

I hope they are right.  Perhaps this is a blip caused by the economic times, but it is something to be aware of if considering PLM.

The World is Upside Down

This blog spends a lot of pixels on the topic of CRM (Customer Relationship Management).  How can companies manage their customers.  How can we keep current customers loyal and retain them?  How can we find new customers who will be profitable and love us and stay with us?

Simple answer?

You can’t.

You don’t really manage customers anymore — if you ever did.  Perhaps the idea was always unreasonable.

Customers are people.  Newsflash.

People are unpredictable.  People are not, by nature, loyal.  If they were the divorce rate wouldn’t be at 50%.

People only care about what they care about NOW.  Today.  If you are selling Christmas trees to Jews they won’t care.  They don’t use them (well, some do but not many).

Customers buy what they WANT to buy and the key today is not in trying to manage your customers but in understanding who they are, what they want (or need) and making it easy for them to be in the right place at the right time with the right story.    Story is key here — because customers need to be able to find what they need when they need it.

And it needs to be simple.  Simple for customers to understand what your widget is.  Easy for them to understand why it matters to THEM (not you, they could care less about you) and then make it easy for them to get to the end result of what they want.   Intuitive (like a iPod, like a GUI (graphical user interface) versus a c: prompt).

The customer is now in charge of the world.  Realize it.  Embrace it.  So now more than ever is “know thy customer” and realize that while you need them, they don’t need you.  Unless you give them a reason to need you.

CRM or BPM?

Last week I had the chance to travel to beautiful Cambridge, MA.  Years ago AT&T sent me to MIT for various business courses, but I hadn’t been there in years.  Coming from Orlando with its 100 plus degree days it was a pleasure to walk by the Charles River along with many others.  The weather was perfect and I wasn’t the only one enjoying the gorgeous day.

I was in Cambridge to visit with Pegasystems, the leading BPM (business process management) software leader.  Pega (as they are known) boasts major customers including Bank of America, three or four of the “Blues” (Blue Crosses) and many others.

BPM automates common work practices — and since many companies are like silos — marketing is independent of sales is independent of engineering is independent of shipping, most processes that cross departments (and don’t they all?) get there via email, voice mail, forms, excel spreadsheets. . .  Even when the systems are the same the receiving department has to proactively pull the work into their world.

BPM not only automates processes across organizations, but using quality improvement methods and workflow automation work gets done faster and more efficiently — thus saving time and money.  In the world of government regulation (such as Sarbanes-Oxley aka SOX) where companies had to keep a tighter track of financial information for auditing purpose) being able to not only automate processes, but to track them becomes a necessity.

Pega is #1 in the BPM software world with their  SmartBPM® product.  Their president, Alan Trefler was named “Computer Software Executive  of the Year” at the 2009 American Business Awards.  So in the world of BPM they are not only the market leader, but the thought leader.  Pega is the leader in the Gartner Group “Magic Quadrant” for BPM.

Recently Pega has dipped its toe into the CRM (customer relationship management) world with their solution CPM (Customer Process Manager).  They have build a contact center customer service support module on top of this BPM engine.   While certainly not a “threat” to the more complete CRM vendors who go beyond the customer service space, the Pega solution is the next logical step for CRM.

Today’s CRM solutions are, for the most part, records based.  Whether we’re talking of Siebel (Oracle), Salesforce.com or Microsoft Dynamics CRM they all start by creating a record.

Remember those corporate silos I mentioned a few paragraphs ago?  All that great customer information winds up “usable” beyond the CRM application only if it is in a field in said record.  Otherwise that valuable customer “gold” becomes embedded in notes that a CSR or sales rep makes of the contact, and are only available to those who sit and read those notes.

What Pega’s CRM does well is to integrate end-to-end customer-facing processes across not only departments but existing applications.  If you already have Siebel and an (enterprise resource planning) ERP solution and a (supply chain management) SCM solution you can bring in Pega underneath them to streamline the hand off of a sale or problem resolution across organizations.  Over time you can begin to implement some of their desktop apps that can be very easily modified on the fly.  The power of Pega’s ability to pull this off is shown in their 50% plus growth in the last year.

The most amazing thing about Pega is that they are aimed at the big companies —  1,000 plus users.  Many CRM applications simply can’t scale to large implementations, but Pega can — and it does so based on an open architecture (java).

Pega does have competitors in this new CRM hybrid space.  Chordiant and Sword Ciboodle (a really excellent offer from a Scottish company who is making inroads into the States) to consider along with Pega if the process oriented CRM approach makes sense in your company.

The traditional CRM vendors have noted the interested a hybrid BPM / CRM approach and all have some iteration of it on their product roadmaps.    If you’re interested in the CRM world, take a look at Pega, Chordiant ans Sword Ciboodle to get a feel for your future.

The Irony of it All

My last blog posed the question:  “Is Microsoft the next Dinosaur?”  My point was that most companies have a lifecycle, just like products do and people do.

Microsoft may or may not be at the precipice of a decline — it is really up to Microsoft.  The thing I always admired about Bill Gates in the “early days” (and I was a UNIX fan since I worked for AT&T Computer Systems) was that he was always paranoid.  He knew the internet could eclipse the OS as far as the center of the IT universe and so out came Internet Explorer.  Microsoft tried to win the search engine war — and after repeated lack of success has what looks like a nice product in Bing.

But no sooner did I post my Blog and get lots of comments (most not so nice from Microsoft proponents) along comes PC World with an article that asks the very same question I asked: 

Is Microsoft Following GM’s Road Map?


Analysis: GM’s bankruptcy marks the end of an era. Is Microsoft repeating the automaker’s mistakes?

J. Peter Bruzzese, InfoWorld

// Jun 3, 2009 6:00 pm

“Microsoft has faced a few serious bumps over the last 10 years but came out fine. . .Knowing the work Microsoft developers put into their products, I believe they are the saving grace of the company — as long as they are allowed to hear the voice of the people. This is an area where I’ve seen a problem.”

I worked for AT&T at the hey day of Bell Labs.  We had the brightest, most awesome minds around — just like Microsoft does today.   Microsoft ca be its own best friend or its own worst enemy.  Only time will tell.

Is Microsoft the next Dinosaur?

Marketing used to be pretty easy to understand — not simple mind you, but easy.  Marketing consisted of branding, public relations, advertising, trade shows and the like.  One could choose print media, radio, TV, billboards and such.

The company was in charge of the message.  Does anyone remember “The Man in the Grey Flannel Suit”?

Today the world is on its head.  My last post discussed the great new book, What Would Google Do.  That book focuses on the model of free core offers that are supported by the ancillary things the core touches.  Content is less important than how to tap into content.

And all of this stems from the explosion of information that came about with the Internet.

I started my career in the 1980s when AT&T spun off the “Baby Bells” giving up the gold mine of monopoly POTS (plain old telephone service) customers for the holy grail of “a computer is just a node on a network.”

That idea rang so true to me, who became a true believer in distributed computing and “information anywhere, any time, any place.”

Everyone else laughed.  This was the era of huge mainframe proprietary computers (the BUNCH were still around — Burroughs, Univac, NCR, CDC and Honeywell, although on the decline.  RCA had already exited computing.  DEC, Wang (no jokes please), Data General. . .these were the ‘mini” computer guys with 64 KB of RAM or LESS (yes, LESS) — names now gone as they either went out of business or were swallowed by others. . .

Microsoft is now on the edge.  It faces the same fate as the BUNCH and the minicomputer vendors if it doesn’t soon wake up and realize that they’ve been commoditized.   Software is almost a “thing of the past” just as minicomputers went the way of the buggy whip and the VCR.  Will anyone buy software on a CD or DVD much longer?  Why, when you can access SaaS (software as a service) online?

Why bog down your internet access device (computer seems so passe, doesn’t it?) with gigabytes of software when it changes daily?  Why not just tap into a secure app that is FREE or nearly free?

Years ago I interviewed for a job at Microsoft and they asked me who their competitor was.  Fresh from Teradata and in a DBMS (data base) state of mind I said “Oracle?” The reply was:  “Google.”

Google?  Google???

But it only took me a second to realize they were right — he who owns the eye balls, owns the person.  Google may have begun “life” as a search engine, but now it is so much more — it is the gateway to the information highway.

Microsoft, I love you.  You’ve done amazing things —  Microsoft Dynamics, your unified communication platform rocks — but you need to realize that the world has changed.  Aside from being global, it is viral.  If you want to stay relevant start realizing what AT&T knew back in the 1980s — but failed to deliver.

A computer is nothing but a node on a network.

Stop focusing on delivering products for the computer.  Start thinking of the network.  Start thinking of the people as if they were on a vast buffet line (network) where they can pick and choose what they want (iPhone apps ring a bell?).

Because that is today’s reality.  And it isn’t changing any time soon.

Product Management Goes “Hi Tech” with PLM

For many years I was a product manager at Bell Labs. We used three ring binders, ISO 9000 (and then 9001) standards to ensure quality and a lot of Microsoft Excel(TM) and Microsoft Project(TM) worksheets.

The hardest part of the job was keeping the status up to date and making sure that all of the members of the team — both direct and matrixed (e.g. our counterparts in sales, marketing, support, etc.) knew what they needed to know so we could get to market on time and on budget.

Boy have times changed.

Major software players now offer something called PLM (short for Product Lifecycle Management). Lifecycle is the key word here. The software helps any type of product manufacturer (from shoes to NASA’s next generation space ship) from idea through design and manufacture, update cycles, service and support needs and even end of life decisions.

Back “in the day” at Bell Labs we worked on a six month cycle — which included everything from “patch releases” (bug fixes) to major next generation and even the generation beyond it planning that went out at least three years. That isn’t easy to do with three ring binders!

PLM promises to do for product development what ERP did for the factory floor and supply chain.

The article “What is PLM?” outlines the advantages companies can expect by using PLM software:

  1. Shorter Time to Market
  2. Better product quality
  3. Reduction in prototyping costs
  4. Savings through the re-use of the original data
  5. A framework for product optimization
  6. Savings in reduction in wastage.
  7. Savings through the complete integration of engineering workflows

As an ex-product manager the biggest bang for the buck potential based on my experience is

  • faster time to market
  • fewer missed dates
  • fewer “mis-matches” in PM / stakeholder expectations and engineering
  • better quality control

In January of 2008 the Gartner Group released a report entitled “Magic Quadrant for Manufacturing Product Life Cycle Management, 4Q07.” where they list Siemens PLM, Dassault Systems, PTC, Autodesk, Oracle and SAP as providers of PLM software.

Siemens (formerly UGS) is rated the highest. Oracle acquired Agile (if you’ve heard of Agile). Gartner dropped Infor because their revenue was too low this past year — but if you are just learning about the various options you might want to consider looking at them.

In these economic times where the stock market is fluctuating and we may be heading for a recession any tool that can help you cut costs while getting to market faster PLM should definitely been on your radar to consider.

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