Is Dancing With Yourself Wrong For Product Mangers To Do?

by drjim on January 18, 2010

How Will Microsoft's Office Product Mangers Get Everyone To Upgrade?

How Will Microsoft

What’s a product manger to do when your #1 competitor is your own product? What can you do if you spend a lot of time and money developing a new version of your product and then roll it out and the customers that you want to sell it to appear to be happy using the old version of your product? This is exactly the situation that Microsoft’s Office product managers now find themselves in…

Done In By Their Own Success

Everybody knows what Microsoft’s Office product is don’t you? It’s the premier suite of business software tools that just about everybody uses everyday (this article is being written in Microsoft Word). The very fact that it’s so popular is what creates such a challenge for its product mangers.

Office 2010 is the next version that is getting ready to be rolled out. It’s got a bunch of fancy new features that are going to permit people to simultaneously work on documents, link into Facebook, etc. But are people going to buy it?

Over at the research company Gartner Inc., they’ve done some interesting studies on just how many people have been willing to upgrade their perfectly good versions of Office to a new version in the past. Only 60% of current Office users bothered to upgrade to Office 2003 when it came out. When Office 2007 came out, somewhere between 50-55% of users upgraded to it. I wonder how things will go for Office 2010?

Why Not Just Go Ahead And Upgrade?

As product managers, we can get very close to our products. Maybe too close. When we roll out a new version of an existing product, we can fool ourselves into thinking that all of our existing customers will of course want to upgrade to it because it has so many cool new features. But that’s just the problem, they are features, not benefits.

What we too quickly overlook is that from our customer’s point-of-view, any upgrade is a pain in the butt. There are a lot of hassles and expenses involved. Sure there is the cost of the new product (didn’t I already pay for this?) but then there is also the retraining that is involved. Once a customer takes into account just how large their user base is, both of these disruptions can quickly become too much to put up with.

Oh, Oh — Microsoft Is Late To The Party

Oh, there’s one more thing that the Microsoft product managers have to worry about. As you can well imagine, past versions of the Office product don’t do everything that customers want. Well guess what: a bunch of companies have seen this market opportunity and have dived right in.

Small start-ups that are run by former Microsoft employees have created tools that can be added to existing versions of Office that provide many of the key new features that Office 2010 will provide — without the hassle of upgrading. Some of these firms are Xobni (email search), DocVerse (collaboratively edit documents over the Internet), Gist (interface email to social networking sites), and Xiant (helps to file email more efficiently).

This, of course, makes life even more difficult for Microsoft’s Office product managers. Why should existing customers upgrade if they can already get the new product’s key new functionally simply by adding free or low cost plugins to their existing software?

What All Of This Means For You

The Microsoft Office product managers have a challenge on their hands. They have a very successful product; however, now they have a new version of the product and they want as many of their existing customers to decide that the expense and hassle of upgrading is worth the effort.

Just to make things even more difficult, an entire industry has sprung up creating add on products that eliminate some of the most obvious customer pain points that Microsoft could normally use to motivate customers to upgrade. This limits Microsoft’s options.

What should be most important for product managers everywhere is that Microsoft has deep pockets and they realize that they have a problem here. I suspect that we’re going to seem a full out push to motivate customers to upgrade: advertising, pricing, and incentives will all be used. We should all take careful notes and learn what works so that we can use it the next time we upgrade our product…

Do you think that Microsoft should lower the price of their Office 2010 product in order to get people to upgrade?

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What We’ll Be Talking About Next Time

Is there any part of a product manager’s job that is more exciting then being responsible for introducing a new product? For that matter, is there any experience that can be more nerve racking than introducing a new product? If only there was some way that we could take out “flop insurance” that would help to prevent our becoming known as the product manager who introduced the next “new Coke” disaster…

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{ 2 comments… read them below or add one }

Gopal Shenoy January 18, 2010 at 1:36 pm

Jim,
I think the main issue here is caused by an outdated delivery model is what is wrong – MS wants to continue to force installs and upgrades on users via the outdated install/upgrade model whereas what customers actually want is a Saas model where no one has to care about these installs and upgrades. MS does not want to do this because they have continue to show their revenue streams to Wall Street. But this story is probably not going to have a nice ending – MS in my opinion will be forced to switch Office to a Saas model for survival purposes or risk losing their leadership to someone else.

I have been using Google docs quite a bit these days and it is letting me do a lot of what I need to do. Do I even know which version it uses – no. But when new features come out, it is there for me to use. Agreed that it is free. But as you know, companies such as Salesforce.com that charge subscription fees, follow the same model that when new releases are out, the new features just appear for me to use. This is what the world wants except for Microsoft.

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Dr. Jim Anderson January 22, 2010 at 7:05 pm

Gopal: Wow — product upgrades that just appear, how nice would that be? I think that you are right on the money, Microsoft is in for a world of hurt as they move from the old way of making money (selling software) to the new way (selling a service). I hope that they have good product managers…!

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