Product Surface Area: A Key Product Consideration

Today's B2B SaaS products live in highly complex and dynamic environments. Product managers must consider the various dimensions of a product's surface area that their products cover. A product surface area (PSA) is the set of environments within which a product must operate. Various cloud infrastructures, adjacent ecosystem products, and product modes of delivery are all examples of dimensions that define a product's surface area. Product surface area is an important consideration as it defines the capabilities needed to enter a new market or to expand and grow market share.

The challenge is that a PSA with too many dimensions and combinations creates a non-sustainable product strategy in terms of on-going R&D and operational costs compared to attributable revenue.

There are many dimensions to a PSA. Some of the most common PSA dimensions are:

• markets served: this PSA dimension defines the markets (i.e., manufacturing, retail, financial, etc.), market tiers (i.e., large enterprises, mid-market, small businesses,) and market geographies (i.e., North America, EMEA, Latin America, etc.) served by the product.
• roles and use cases: for each market served, this PSA dimension defines the specific end-user roles and associated use cases served by the product. In this context, products sold by a SaaS company deliver on one or more use cases.
• cloud infrastructure: for each market served, this PSA dimension defines the cloud infrastructure(s) (e.g., Amazon AWS, Microsoft Azure, Google Cloud Platform (GCP), Oracle Cloud Infrastructure (OCI), etc.) used by the product.
• platform services: for each market served, this PSA dimension defines the platform services (i.e., data management, data analytics, identity management, user interface management, workflow management, etc.) used by the product.
• adjacent ecosystem products: for each market served, this PSA dimension defines the adjacent software products in your ecosystem for which integration is part of your SaaS whole product offering.
• modes of delivery: for each market served, this PSA dimension defines the range of multi-tenant public cloud, single-tenant private cloud, edge, and mobile modes of delivery offered by the product.

It is important for a product team to do revenue, cost, and profit attribution for each PSA dimension. Obviously, direct revenue attribution is straight forward for products (collections of use cases) sold by the company. In other cases, revenue attribution can be difficult to do. For example, adjacent ecosystem product integrations may be loss leaders and better understood in the context of core product revenues that are sold, in part, because of the ecosystem integrations.

Several examples are illustrative here. For many SaaS companies, it is difficult to determine the right level and range of adjacent ecosystem products with which to integrate. Invest in too many adjacent ecosystem product integrations and they become a drain on R&D without proper ROI. Invest in too few ecosystem product integrations and your product is locked out of markets it might otherwise thrive in. For a number of SaaS companies we have worked with, rationalizing their ecosystem partnerships and right-sizing their investments in them has led to some interesting revelations. One company we worked with has yet to recover its original investment in integrating with an adjacent ecosystem product over a several year period.

Secondly, many B2B SaaS companies have made the decision to become multi-cloud companies (i.e., their products run natively on more than one cloud infrastructure). One company we worked with has significant retail market share and has been encouraged by their customers to provide a non-AWS cloud offering of their SaaS product. We have also seen other scenarios where cloud infrastructure providers (e.g., Microsoft Azure, Google Cloud Platform (GCP), Oracle Cloud Infrastructure (OCI)) exert influence on SaaS companies to have their products run on to a given cloud infrastructure. This is especially true in cases where the SaaS company desires to integrate with and sell into the broader product ecosystems of the cloud infrastructure company. A multi-cloud product surface area is an expensive development, testing, and operational undertaking that must be carefully examined from a business perspective.

Product surface area is an important product strategy consideration. Some questions to consider about your product surface area:

• Does your product team have an accurate accounting of your product surface area?
• Are you convinced that each dimension of the product surface area is strategic?
• Are there missing dimensions of the product surface area?