Micro>Products - Enabling Rapid Disruption

The rate at which cloud platform vendors are releasing new features is flabbergasting. Sometimes it is outright scary if you are looking at it from a competition angle, and for that matter, you may not even know whether a cloud platform provider is your competitor or not. The cloud platform maturity of AWS and Microsoft Azure platforms are out of reach for most of the enterprises out there. I have chronologically listed below some key milestones achieved by these cloud providers right when other traditional organizations were busy protecting their fat budgets with fat datacenters and private clouds.

• 2005-2008 - Software-defined datacenter and basic automation capabilities
• 2008-2012 - Commoditization and Automation of Compute, Storage, Network and business adoption of consumption/subscription models (IaaS, PaaS, and SaaS)
• 2012-2015 - Industry validation of cloud-scale datacenters because of the success of Unicorn startups
• 2015-Present - Vertical (and Horizontal) industry disruption via micro-products

 You can clearly see the alignment of these milestones with the typical hype-cycle in which the early adopters of the cloud (2005-2008) turned into unicorns, that are ready to crush traditional businesses. Cloud providers (IaaS, PaaS, and SaaS) are manufacturing weapons (products) at a rapid pace and aiming at every traditional enterprise that has refused to innovate in the past 10 years. These cloud providers can now expeditiously deliver any kind of software product for any horizontal or vertical industry. This is the era of micro-products, which in-turn is driving Digital Transformation at light speed.

What are Micro-Products?

Micro-products are a modern way of delivering minimal products with only the most attractive features. Micro-products focus only on doing one thing right, but customers are willing to pay for that unique experience independently. Let's consider Amazon Echo as a micro-product. When Echo was first launched, it was merely a cloud-enabled device that responded to simple voice commands like "What's the current time?". But, when I first interacted with it, I immediately realized that it had the best voice recognition software in the market. High-end voice and text research companies like Google, IBM, and Microsoft didn't even come close to Echo's accuracy in interpretation of accents. On the other hand, Microsoft's Cortana or Apple's Siri are products that are packaged into larger monolithic operating system products, and therefore are inconvenient to use. The experience is fragmented because the voice interactivity is forced into an existing monolithic product. Echo is a micro-product that is one of the best interactive voice devices on the market today. The era of monolithic products is over and if your organization is still designing them, then it’s a waste of shareholder investments.

In today's world, monolithic products have significant limitations:

1. Time-to-Market: Your Go-To-Market needs to align with all other products in the larger package which delays Time-to-Market
2. Software Dependencies: The product's entire software lifecycle needs to line up with the lifecycle of the monolithic product - Design, Dev, Test, Release
3. Enforces Waterfall Process: Even if you develop the individual product using Agile Development Principles, you are forced to follow a waterfall model because agile models are difficult to execute in large-scale cross-functional environments like Windows and iOS
4. Unnecessary Work: If you are thinking of procuring servers, designing for scale and availability of VM or container infrastructure, then you are reinventing the wheel.
5. Hard to build Subscription/Consumption Model: It is significantly difficult to build a consumption business on monolithic products because monolithic products cannot be naturally modularized for subscription pricing and consumption models. That leads to a buffet in which most customers will only use 20% of the features

With a micro-product, you can quickly release a product and test the market and if it is designed in a modular fashion, then you can extend it like Alexa Skills.

 Team Organization

People and only people define the success of a software organization. Are your teams organized for delivering micro-products? I often see leaders finding it difficult to change their organizational structures in order to either protect their budget or are extremely risk averse with innovation. Doesn't matter whether you are agile, if your team is not organized for success, you won't be able to deliver the right product in time. To design a micro-product, you need a micro-team (or a mission team) that focusses on achievable goals delivered at a rapid pace. A mission team has one business owner and one technical owner and a team that includes development and ops. As the product grows, the mission teams are reorganized into more mission teams with very specific responsibilities.

 Designing Micro-Products

We all have heard about micro-services and the hype surrounding them. I have seen micro-services succeed when the team understands the operational impact of managing multiple services. I have also seen teams design hundreds of micro-services causing serious deployment and management problems when a dozen would have been sufficient. Designing micro-products is no different. The team needs to understand the clear delivery goal for the first release and build a roadmap that is achievable, manageable, and yet provides good enough value to the customer. The Product Manager (or the GM) needs to clearly outline the boundaries of the product by identifying the immediate market needs by interviewing customers, sales, and marketing teams. Manageable designs and faster delivery will let you test the market early with the customers and reduce the ambiguity from customer feedback.

 Platform Requirements

Without a stable platform, you cannot build micro-products. There are certain elements of the platform that tie-into multiple micro-products. In case of Amazon Echo, the Amazon Identity, Amazon Prime Membership, and the AWS API platform are essential for its success. On a stable platform, a mission-team can innovate and deliver products to the market faster than the competition. If you look at today's AWS portfolio, a significant portion of the services is re-packaged managed versions of open source products. Because of the core elements of the platform like Identity Management, User Experience, Compute, Storage, Networking, Billing, Security, etc. are already in place, it is easier for a small team to repackage an existing open source product as a multi-tenant managed service. Contrary to that, if you are still following the traditional software delivery model, you will take more than twice the time to create a new product on a new platform. It's just not competitive. In today's world, a sensible leader will always start a product on an existing platform otherwise the chances of success are reduced drastically. Today, any new product (or even cloud migration) should be designed to take full advantage of the underlying platform, otherwise, you will always be running behind the market.

 Expanding Micro-Products

Let's assume that you build a micro-product on AWS and your product takes-off. You need an expansion strategy to rapidly add new features as customer requests start pouring in. If you have designed the product in a modular fashion with good enough attention to expansion, you will reap the benefits of delivering features faster to your customers. But, we all know, this doesn't work in the real world. There is always a trade-off between technical-debt and time-to-market. An experienced engineering lead and a pragmatic product manager will always manage trade-offs and pay close attention to the technical and product debt the team is taking on. The trade-off fundamentally decides how you handle product growth and helps the product cross deep chasms through its journey. The second-most important aspect of expansion is about reorganizing the team on a regular basis to take on these expansions, yet not relinquishing the original concept of micro-products and mission-teams. I have seen several managers (not leaders) trying hard to control as many headcounts (and budget) as possible to expand their empire, but on the other hand giving-up agility and the ability to innovate and release products faster. Keeping the organization flat and assigning end-to-end ownership to mission-teams will help you experiment, innovate, and release better products in the long run.

 Disrupting Your Own Business

Over the past 10 years, I have interviewed hundreds of organizations from startups to Fortune 50 enterprises in understanding the impact of cloud, mobile, and digital transformation on their businesses. Startups are typically small and agile and due to well-defined constraints, they have no other choice than to innovate and deliver products on mature platforms like AWS. Traditional enterprises are at significant risk from companies like Amazon, Microsoft, Google, Netflix, Apple, Airbnb, Uber, Salesforce.com, etc. not only because these companies have learned the art of delivering micro-products, but the traditional enterprises have refused to disrupt themselves to face the digital competition. If every company has to be a software company, you need software people to run some of the core business functions. A CIO who has been running the IT operations for 20+ years may not be the right person to build a software business in your organization. For example, tomorrow a mortgage startup (or any SaaS company) can easily disrupt the real estate industry by eliminating human workflow in the mortgage-lending process and the traditional companies who have refused to move fast or disrupt themselves will find their future in limbo. To predict the success (and failure) of a traditional non-digital organization within the next five years, you only need to analyze its leadership team's and organization structure.

 Remember, software travels almost at the speed of light. So, faster you deliver, the sooner you will reach your customers around the world. Shipping is the best form of learning. Select a platform, design a micro-product, and quickly deliver value to your customers; Isn't this Digital Transformation?

Thanks,

Tej Redkar