Software Business

SOFTWARE BUSINESSDR. JUNE SUNG PARK I PROFESSOR, KAIST | CHAIRMAN, SEMAT, INC.

[email protected] | HTTP://FLAVORS.ME/JUNE_SUNG_PARK

COPYRIGHT © 2016. DR. JUNE SUNG PARK. 1

GCS School

http://flavors.me/june_sung_park

[Education]

서울대 경영학 학사/석사

미국 Ohio State University, Computer Science 및

Industrial Engineering 박사

[Career]

미국 University of Iowa, Information Systems 종신

교수 (1989-2000)

미국 INFORMS, Technical Section on

Telecommunications 회장 (1998-2000)

삼성SDS, CTO/전무 (1998-2009)

미국 Hon Company, HP Software, Rockwell Collins,

한국 LG전자, 삼성생명, 삼성전자, 서울대병원, 영림

원, 포시에스 등 IT 자문

[Honor]

Marquis Who’s Who in Science and Engineering 등재

Marquis Who’s Who in Media and Communications

등재

[Present]

KAIST, 산업 및 시스템공학과 초빙교수 / 전산학과 겸임교수(2010-현재)

KAIST, Smart Cloudlet Research Program 총괄책임자 (미래부5G 이동통신 연구과제)

국제SW공학협회 회장 (SEMAT: Software Engineering Method

and Theory), San Rafael, CA, U.S.A. http://semat.org;

http://semat-korea.org

OMG Essence 국제표준 제정위원회 위원장http://www.omg.org/spec/Essence/

Information Technology and Management 국제학술지Associate Editor

한국SW기술진흥협회(KOSTA), SW기술훈련원장

미래부, 클라우드정책포럼, 클라우드도입확산분과 위원장 /

SaaS활성화TF 위원장

행자부, 전자정부민관협력포럼, 클라우드분과 위원장

산업부, 자체평가위원회, 통상협력분과 위원

국방부, 정보화 자문위원

강사소개

http://semat.org/

http://semat-korea.org/

http://www.omg.org/spec/Essence/

목차


SW기업 일반의 핵심성공요인

SW공학 역량

SW인재관리

SW산업의 구조와 업종 간 상이점

SW산업의 구조

SW업종 간 상이점

Hybrid SW기업의 유형

SW업종별 핵심성공요인

IT서비스/CSB 사업 성공요인

CSB 사업의 추가요건

SW제품/SaaS 사업 성공요인

SaaS 사업의 추가요건

별첨: SaaS 사업계획서 템플릿

SW기업일반의핵심성공요인SW공학역량 | SW인재관리


SW공학역량 = SW기업의이윤


공학의 효과

생산성 원가

가치 가격

불국사 대웅전 (751~774년 건축; 1 가구) 롯데월드타워 (2009~2016년 건축; 5000여 가구)

SW공학: BEFORE AND AFTER IBM 1960s vs. Raytheon 1980s-1990s


IBM OS/360 was the biggest programming

effort to that time.

It took 5000 person-years between 1963-66

producing more than 1M LOC.

It cost $500M—four times the original budget,

and a year late, very buggy.

Raytheon carried out software engineering

improvement initiatives during 1988-1995.

Raytheon adopted formal methods, tools and training

curriculum.

The rework costs, averaging 41% of project costs in

1988, dropped to 5% in 1995.

성공적 SW = DOMAIN KNOWLEDGE + CREATIVITY + SW공학+ CRAFTSMANSHIP


Engineering = 4C Implementation of Creative Design with High Productivity

Use Case Scenario Sequence Diagram

Class Diagram

ER DiagramService Spec

Service InterfaceDiagram

Code Generation

DDL Generation

User Concept Map

Process Model

UI Wireframe

Use Case

UX Journey Map

CRC

4C = Correct | Consistent | Complete | Comprehensible

SW공학


ProcessProcess Framework, Process Pattern, Project-Specific Process

Method

ToolManagement, Modeling, Coding, Testing, Measurement …

Language and

Metamodel

Essence

BPMN

UML

SoaML

…

Role Activity Work Product

Guideline Checklist Template

Is Composed of

Utilizes

Is Describ

ed u

sing

ESSENCE 표준기반의기업별 SW공학체계설계및현장적용


PracticeEssence Kernel

Role

Alpha

Alpha State

Activity Space

Competency

Work Product

Activity

<has

targ

ets

> pro

duces

/

update

s>

< defines

Practice

< is

com

pose

d o

f

Method

profiles>is

qualifi

ed

to p

erf

orm

>

박준성, 소프트웨어 개발방법론의 표준화:

OMG Essence, 표준과표준화연구제3권 제2호, 2013.

Object Management Group, Essence—

Kernel and Language for Software

Engineering Methods 1.0, November 2014.

(http://www.omg.org/spec/Essence/)

J. S. Park, “Essence-Based Goal-Driven

Adaptive Software Engineering,” IEEE/ACM

International Conference on Software

Engineering, Florence, Italy, May 18, 2015.

(http://dl.acm.org/citation.cfm?id=28201

76)

J. S. Park, “Software Engineering in the

Context of Business Systems,” in I.

Jacobson and H. Lawson (ed.) Software

Engineering in the Systems Context,

College Publications: London, 2015. (ISBN

978-1-84890-176-6)

J. S. Park, P.E. McMahon and B. Myburgh,

“Scrum Powered by Essence,” ACM

Software Engineering Note, Jan. 2016

(forthcoming).

http://www.omg.org/spec/Essence/

http://dl.acm.org/citation.cfm?id=2820176

SW공학 = PROCESS + METHOD/TOOL + CURRICULUM + INTEL. ASSET


Process: 어떤 역할자들을정의하여 어떤 활동을 시켜어떤 산출물을 만드는가와역할자 간의 협력 시 활동 및산출물 간 지켜야 할 상호의존성에 관한 규칙

Method/Tool: 각 활동 시적용해야 할 과학적/공학적기법 및 툴

Curriculum: 역할자 별 필요한지식, Skill, 프로세스수행능력을 훈련시키기 위한교육프로그램

Intellectual Asset: 기법의Lessons Learned와 산출물의재사용 자산화

IBM Global Service 2000

UNIFIED SWDP FOR IT SERVICE BUSINESS Capgemni 2000s


Project

Capgemini was called on to build a system for a global automobile manufacturer to automate the process for re-claiming the cost of warranty work from suppliers.

The project was to build a supplier re-claim system with new technologies including a Web-based interface on the front-end with J2EE compliant code, Oracle database and UNIX servers on the back-end.

SW Engineering Process

The Capgemini team closely followed the prescribed iterative development approach of the Rational Unified Process.

The first task for this 50 people team was to nail down the system requirements for the first 6-month phase of development. Working with the financial analysts who would ultimately use the system, the team agreed on eight high-level requirements that were to be addressed two at a time in each of four iterations over the 6-month period. The requirements were maintained in Rational’s requirement management tool called RequisitePro.

UNIFIED SWDP FOR IT SERVICE BUSINESS Capgemni 2000s


SW Engineering Methods and Tools

Following the RUP process, the team modeled use cases from the requirements in the Rational Rose, an integrated development environment (IDE). After client approval of use cases, the team developed system designs using class diagrams and sequence diagrams. Traceability of the requirements into the system designs was relatively easy owing to the integration between Rational RequisitePro and Rational Rose.

The team also leveraged requirements to develop test scripts, and then conducted functional tests of the code using the testing tool Rational TestStudio. The integration between RequisitePro and TestStudio was another time-saver—allowing the team to see in RequisitePro whether a test case had passed. Defects found during test runs were recorded in the defect tracking toolRational ClearQuest, providing ready access to the current state of quality for the project.

Results

The final system was delivered on time with zero open defects and has gone beautifully since then with few defects even after 5 months of use.

AGILE SWDP FOR SW PRODUCT BUSINESS Microsoft 1990s


Background

In late 1995 Microsoft faced with a disruptive

innovation in its core business.

Product

Internet Explorer 3.0 (IE3), Microsoft’s first browser

released in August 1996

Project

The project was designated a “companywide

emergency” meaning that if you were smart and had

time, you should help out the IE3 team.

AGILE SWDP FOR SW PRODUCT BUSINESS: THEN Microsoft 1990s


Product Engineering Process

11~12/1995: Initial specification put together by a small team and released to development partners

1~3/1996: Developed a product architecture and componentized the product so that a large number of people inside and outside might work in parallel

3/1996: 30% of the final functionality integrated based on the architecture, and released as a alpha version. A process of daily builds was instituted using automated tests, which allowed the team to add new functionality, test the impact of each feature, and make suitable design changes.

4/1996: First beta version including 50~70% of the final functionality distributed to the public. A significant proportion of the design changes made after the first beta release resulted from direct customer feedback.

6/1996: Second beta followed in June with 70~90%.

8/1996: Product released to market.

AGILE SWDP FOR SW PRODUCT BUSINESS: NOW Microsoft 2010s


Basic Scrum

4-week or 2-week sprint with daily scrum

JIT design of features using CRC

Spike for large or unknown features prior toincluding in the sprint backlog

Planning Poker

Planning Poker (a.k.a. Wideband Delphi) played inthe sprint planning by an extended developmentteam to estimate person-hours

Planning Poker sometimes leads to a deadlock whenthe product owner did not fully described thefeature to be delivered.

Requirement Analysis, Architecture Design and Prototyping

In such cases, upfront work is requested to theproduct owner that may include fully defining small,user-visible, user-valued feature requirements,high-level architectural analysis, preliminary userinterface design, and a spike.

XP: Test-Driven Development

All public methods must have documentation.

Each developer check-in at least daily.

Each check-in initiates an automated build.

Each build entails automated unit tests and associated testcoverage computation.

Unit test coverage must be at least 80%. Due to “Done ornot done” criteria of scrum, developers often develop anddemo only the happy path of a user story in the scrumreview. High coverage is needed to force tests to executealternative flows and error handling.

Build must complete with no errors or warnings on thehighest level.

QA

Senior developers conduct peer reviews of architecturediagrams and of code when adding new features. Whencode is checked in, the reviewer(s) names are entered intothe code review tool.

All code must not have any static analysis errors orwarnings.

SW공학의필수요소


Joel Test

1. Do you use source control?

2. Can you make a build in one step?

3. Do you make daily builds?

4. Do you have a bug database?

5. Do you fix bugs before writing new code?

6. Do you have an up-to-date schedule?

7. Do you have a spec?

8. Do programmers have quiet working conditions?

9. Do you use the best tools money can buy?

10. Do you have testers?

11. Do new candidates write code during their interview?

12. Do you do hallway usability testing?

Don’t Do

Waterfall Iterative

ISP with FD EA with BPM

Information Engineering OOA&D using UML 2.0

CASE for Code Gen Model-Based Development

Component-Based

Architecture

Service-Oriented

Architecture

IDE for Single-Tenant Apps PaaS for Multitenant SaaS

Custom Development Composition using APIs

SW공학최근추세


SOA 성숙도모델


SOA 애플리케이션개발프로세스 IBM Global Service


Information Model

Use Case Model Process Model Service Specification Service Implementation Process Orchestration

Industry Model

SOA 애플리케이션개발프로세스 Microsoft


모델기반의 SOA 애플리케이션개발


Use Case Scenario Sequence Diagram

Class Diagram

ER DiagramService Spec

Service InterfaceDiagram

Code Generation

DDL Generation

User Concept Map

Process Model

UI Wireframe

Use Case

UX Journey Map

CRC

WHERE TO LEARN MORE


과정 순번 훈련과정 교육 시간 강사 강의장 강의 일자

1~3 프로세스 설계 및 관리 24 박준성 KOSTA 판교 2/ 18, 19, 26

4~6 DB, DW 및 Big Data의 개념 및 논리 설계 24 박준성 KOSTA 판교 3/ 10, 11, 18

7 요구공학 프로세스 및 유스케이스 분석 8 박준성 KOSTA 판교 3/ 25

8~9 자동 코드 생성을 위한 통합 SW모델링 툴 활용실습 16 박준성 KOSTA 판교 3/ 31, 4/ 1

10~12 SW모델링 기반의 클라우드 애플리케이션 개발실습 24 장진영 KOSTA 판교 4/ 6, 7, 8

문의처: 한국SW기술진흥협회(KOSTA) 황승억 선임 | [email protected] | http://www.kosta.or.kr

mailto:[email protected]

http://www.kosta.or.kr/

SW기업일반의핵심성공요인SW공학역량 | SW인재관리


인재관리(TALENT MANAGEMENT)


John ChambersCEO, Cisco

“A world-class

engineer with five

peers can

outproduce 200

regular engineers.”

Christopher A. BartlettProfessor, Harvard Business

School

Microsoft’s success in the

iterative software development

process is attributed to its

ability to recruit, develop,

motivate, and retain

exceptionally capable people—

”the best team of software

professionals the world has ever

seen,” as CEO Bill Gates liked to

boast.

Jack WelchChairman, GE

“I view my primary job as

strengthening our talent

pools.” Jack Welch is

renowned for spending 30

days every year chairing

GE’s talent review process,

called “Session C.”Jim RobbinsCEO, Cox Comm.

“Talent is the single

gating factor for us

in realizing our

growth vision.”

E. Michaels, H. Handfield-Jones and B. Axelrod, The War for Talent, Harvard Business School Press, 2001

SW인재


“An exceptional employee is 100 times better than someone who is pretty good.”

Mark Zuckerberg, CEO, Facebook

“An organization is nothing more than the collective capacity of people to create value.”

Louis Gerstner Jr., Former CEO, IBM

“A 10-20 fold difference exists in productivity between the best and the worst software engineers.

No other industry shows such variance of human ability.”

Michael A. Cusumano, Professor, MIT

TALENT MANAGEMENT PROCESS


Competency Analysis

Competency Definition

Current Capability

Workforce Planning

Capability Demand

Competency Development Requirements

Competency Development

Plan

Competency Development

Personal Development

Plan

Community of Practice

Training and Development

Program

Career Development

Personal Career Plan

Career Roadmap

Personal Capability Assessment

Recruiting StaffingPerformance Management Compensation

Recognition and Rewards

Work Assignment

Competency-Based

Practices

Training and Development

HOW TO DEFINE COMPETENCY


EmployeeCompetency

Knowledge Skill Process Ability

Process Activity

Requires

RolePerforms

Is Assigned to

Possesses

Capability

Work ProductProduces

Method / Tool

Uses

Requires SpecificWorkgroup

Organization

Unit

Works In

Consists of

Consists

of

Curriculum

ROLE DEFINITION SAP


Product Strategy

Product Development

Product License andMaintenance Sales

Customer Support

Product Marketing

Professional Service

Value Chain of

SW Product Business

PROCESS-ROLE MAPPING Microsoft Product Development Process


COMPETENCY DEFINITION IBM Global Service


IT Service BusinessIT strategy

Service marketing and sales

Service requirements management

Service creation

Service request management

Service level agreement

Client relationships

Portfolio management

Customer satisfaction management

Service pricing and contract

administration

IT workforce management

Service continuity

Project management and service

deployment

Solution globalization and

accessibility

Data privacy

… 80 topics

IT Systems ArchitectureManagement system

architecture

Service and component design

Service oriented architecture

Technology governance

Architectural methods

Infrastructure ServicesIT Services Operations

IT management system

evaluation

Performance Management

Server administration

Backup and restore

Storage

Event management

Availability management

Capacity management

Facility

Network

IT Recovery

Security

Service Oriented

ArchitectureSOA Overview

SOA Lifecycle

Service Oriented Modeling

SOA Programming ModelWeb Services and XML

Service Component

Architecture

SOA Standards

SOA tools

SOA Solution DesignBPEL

ESB

WSDL

SOA Reference

Architecture

SOA Solution Development

SOA Security

SOA Governance

SOA TransitionSOA Assessment

SOA Adoption

SOA Transformation

SOA Maturity Model

CBM

PRMCurriculum

CURRICULUM Capgemini University 2009


Software Engineer Business Analyst

CURRICULUM Infosys


Intermediate (8 week) Technology Specific (15 week)Basic (6 week)

HR Induction

Soft skills

Problem solving concepts

Operating system concepts

Basic of programming and DBMS

Intellectual property concepts

OOP concepts

Advanced DBMS concepts

Design and analysis of

algorithms

User experience

Software engineering

Developing enterprise applications

Java / .Net / Open Systems / Mainframe /

BI

PLES / ES / IMS / PE / Finacle

POST (Project on Organizational Standards

during Training)

Infosys Foundation Program

Corporate-wide CMMI and P-CMM Level 5

Over 30,000 knowledge components in repository / Average of 5,600 downloads daily

Web 2.0 platform for CoP

국가직무능력표준 (NCS) SW신자격제도 2015


EmployeeCompetency

(능력)

Knowledge(지식)

Skill(기술)

Process Ability(수행준거)

Process Activity

Requires

Role(직무/역할)Performs

Is Assigned to

Possesses

Capability(역량)

Work ProductProduces

Method / Tool

Uses

Requires SpecificWorkgroup

Organization Unit

Works In

Consists of

Consists of

Assessment(평가/검증)

Evaluates

Is Designed for

자격종목

평가/검증

Curriculum(교육과정)

국가직무능력표준(NCS) SW신자격제도 2015


SW산업의구조와업종별특성SW산업의구조 | SW업종간 상이점 | HYBRID SW기업의유형


SW산업의진화


Labor-Based IT Service: Custom Development

Software Product: Mass Marketing of Product License

Product-Based IT Service: Package Implementation

Asset-Based IT Service: Reuse

Cloud Service Brokerage: Cloud Integration

Cloud Service: Subscription for Utilities

1950 1960 1970 1980 1990 2000 2010

SW업종간전후방연관관계및전환추세


IaaS

PaaS

SaaS

CMP

CSB Enabler

CSB

Consumer

IT Service

SW Product 점선: 업종전환

실선: 전후방 산업연관관계

SW 전후방산업연관관계


IT service industry is a downstream

industry of the software product,

hardware product and telecom service

industries.

IT service providers should build a

symbiotic relationship with enterprise

software product vendors.

IT Services companies fail most of the

time when they try to generalize what

they know and create products

(shrink-wrapped software packages)

for the mass market. Products and

services companies are fundamentally

different.*

* Satish Nambisan, “Why Service Businesses Are Not Product Businesses,” MIT Sloan Management Review 42, vol. 4, 2001, 72-80.

SW산업의클라우드화: SW제품 SAAS / PAAS


Steve Ballmer announced “For the cloud, we’re all in” in March 2010.

He said, “We have 40,000 people employed building software around

the globe, and about 70% of the folks are doing something designed

exclusively for the cloud.”

Oracle announced “Oracle’s cloud is now complete” in June 2015,

planning to compete on price against Goliath AWS with it own IaaS,

provide a host of PaaS including aPaaS, iPaaS, DBaaS, Big Data as a

service, MBaaS, and offering the most comprehensive portfolio of

SaaS including ERP, SCM, CX, HR.

SW산업의클라우드화: IT서비스 CSB


Accenture’s Cloud Application Factory, offers “rules, tools, and

schools” to accelerate a company’s adoption of cloud computing.

Everything from delivery toolkits to integration frameworks

reduces risks and ensures the success of highly complex, global

deployments.

Capgemini provides cloud orchestration service that enables you

to quickly access Microsoft PaaS services while IT controls

business process configuration, billing, metering, performance

monitoring, provisioning, security and data compliance.

세계 SW시장규모


IT 2010 ($B) 2015 ($B) CAGR (%)

Software 1,111 1,538 7

Software Product 244 351 8

IT Services 793 1,004 5

SaaS/PaaS 71 158 17

IaaS 3 20 48

CSB 0.05 5 400

Computing Hardware 375 604 10

Telecom Equipment 413 572 7

Telecom Services 1,602 1,914 4

Gartner Dataquest, Forecast Alert: IT Spending, Worldwide, 2008-2015, 2Q11 Update, June 2011.

IT Service

Industry

Sales ($B) 2005

Gross

Margin 2005 2010

Project

Contracts

Consulting 52 7134%

SI 193 259

Outsourcing

Contracts

ITO 155 21828%

BPO 94 137

Total 494 680

Gartner Dataquest, Market Statistics 2006, Nov. 2006.



SW업종별 SW제공형태


SW제공형태 설명 SW업종

White Box SW Source 제공IT서비스 Custom개발, Open Source

SW제품

Black Box SW Executable 제공개인용 SW제품, Middleware SW제품,

IT서비스 용 SW자산

Grey Box SWExecutable 제공, Configuration Parameter

제공을 통한 Customization 지원기업용 SW제품, ASP 서비스 (a.k.a. On-

Demand SW, Hosted SW)

SOA SWExecutable 제공, API 제공을 통한Customization 및 Composition 지원

2000년대 중반 이후 모든 SW제품,

IT서비스 용 SW자산

Multitenant Cloud-

Native SW

API 제공을 통한 Customization 및Composition 지원

SaaS 서비스, PaaS 서비스

SW제품의진화 SAP


Financial Accounting

on Mainframe

(1972)

R/3 on C/S

(1992)

E-Business Suite

On Web

(2002)

SOA: SAP NetWeaver

Process Orchestration, Enterprise Services

(2004)

ERPaaS:

Business ByDesign,

SAP Cloud for Sales,

Service, Financials,

etc., SAP Hana Cloud

Integration, Ariba,

SuccessFactors

(2012)

1950 1960 1970 1980 1990 2000 2010

Online Computing

(1976-85)

Client/Server

(1986-95)

E-Business

(1995-2005)

Mobile Cloud

(2005-2015)

SW업종간비즈니스모델비교


Software

Product

Software-Centric Service

Product

Maintenance

IT Service / CSBSaaS / PaaS

Project Outsourcing

What is Sold License Professionals’ time Usage

Whom to Sell Mass market Specific customer Mass market

How to ChargeOne-time price

per license

Recurring fee

per license

One-time,

cost plus or fixed price

per project

Recurring charge

per site

Recurring fee

per subscription

Industry Category Publishing industry Professional business service industry Utilities industry

Product Structure

Black box, APIs, Configuration

Parameters, Composite Application,

Orchestration

(Open source software: White box)

Reference models, SOA service, Orchestration,

Domain-Specific Framework

Same as SW product,

Multitenant

Production Type Make to stock Engineer to order, Make to order Make to stock

SW업종별 VALUE CHAIN


SaaSStrategy

SaaSWeb

Marketing

SubscriptionFulfillment

SLA Assuranceand Billing

SaaS Infraand ProductDevelopment

ServiceStrategy

ServiceMarketing

SolutionDesign /Proposal

ServiceDelivery

ServiceEngineering

ProductStrategy

ProductMarketing

ProductLicense andMaintenance

Sales

CustomerSupport

ProductDevelopment

Software Product

Business

IT Service

Business

SaaS Business

SW업종별재무모델


Accenture

2010

Infosys

2010

SAP

2010

Microsoft

2010

Salesforce

2010

Revenue $22B $6B $17B $62B $1B

Cost of Sales 66% 55% 32% 20% 20%

Gross Margin 34% 45% 68% 80% 80%

Sales & Marketing 12% 5% 21% 21% 46%

R&D 6%

7%

14% 14% 10%

G&A 2% 13% 6% 15%

Operating Profit 14% 33% 21% 39% 9%

SW업종별기업시장가치




‘SW제품 + IT서비스’ HYBRID 기업의유형


Type 1: Professional services for their own products

Type 1-1: Growing out of IT services to software product vendor (e.g. OPower)

Type 1-2: Mature software product vendor providing IT services to support product sales (e.g. SAP, Oracle)

Type 1-3: Software product vendors losing competitive advantages in the product market (e.g. i2 Technologies)

Type 2: Decoupling of product business and professional service business (e.g. IBM, HP, EMC)

TYPE 1-1: GROWING OUT OF IT SERVICE TO PRODUCT VENDOR


IT service companies can significantly increase

the added value by making transition from

labor-based services to asset-based services.

As experience and standard portion of the added

value increase, they start enjoying scale

economies, invest a significant part of total

value added in R&D, and eventually transcend

the IT service business category, even

outsourcing much of the software installation

and customization to partners and focusing on

product development and branding.

Most enterprise application software product

vendors start as IT service providers developing

customized products.

F. Barber, P. Catchings, Y. Morieux, Rules of the Game for People Business,

Boston Consulting Group, April 2005.

service

TYPE 1-1 HYBRID SW BUSINESS

Founded in 2007 by Dan Yates, a Harvard

computer science major.

Developed software helping utilities

engage customers in ways that reduce

energy consumption.

As utilities pursue “smart grid”, evolved

the product to Web applications for both

households and utilities’ customer service.

Using this tool, about 85% of OPWER

customers could reduce power

consumption by 3.5%.

OPower



By 2009 when OPWER had about 20 software engineers, the product development process was still loosely

structured and relied on “heroic project managers”.

OPOWER’s product roadmap had evolved largely in response to requests from prospective and existing customers.

It built new stuff independently for each clients.

This reactive approach introduced “technical debt”—consequences of hasty architecture design and coding without

factoring and layering reusable components.

Maintaining product roadmap was difficult due to ongoing pressure to develop custom solutions for its large and

diverse customers.

Most utility RFPs were competitive, involved large, long-term contracts, and had special needs related to the

geographies and demographics they served, plant conditions and regulations.

This increased the tension between sales teams wanting to promise many specific functionalities to win bids and

product teams trying to maintain discipline and deliver a product optimized for all customers over the long term.

OPower



In 2010 OPOWER decided to

professionalize the product

development process and to make

transition to agile methods.

It implemented a Scrum process in

which a new software was released

every 3 weeks.

In 2010 OPOWER had 4 scrum teams.

Each scrum team included a product

manager as “product owner”,

developers and a quality assurance

member.

To resolve the conflicts and tradeoffs

between sales and engineering, the

token system was introduced

OPower


Estimate the annual engineering

capacity in number of scrum cycles—

i.e., tokens.

Grant a certain % (15% in 2011) of the

total tokens to sales which they can

“spend” over the year.

Have product and engineering teams

categorize requests in an RFP as blue,

green and yellow, and estimate the

number of tokens needed to complete

them.

Have sales decide how many tokens to

redeem for yellow and green features

to win the RFP.

Feature

category

On

product

roadmap?

Change in

engineering plan

to meet the RFP?

Blue already oncan be completed

without change

Green already onneed acceleration at

least by one quarter

Yellow Not onneed to be added

anew

TYPE 1-2: COUPLED TO DOMINATE

55

Successful and mature vendors provide IT services for IT-smart customers to find new innovative features for future upgrades of their products

IT services around the product vendor’s own product usually do not generate profits though.

2010 Accenture IBM SAP

Revenue $22B $100B $17B

License & Maintenance - 23% 79%

IT Service 100% 57% 21%

Systems & Tech, etc. - 20% -

Cost of Sales 66% 54% 32%

License & Support - 3% 15%

IT Service 66% 39% 17%

Systems & Tech, etc. - 12% -

Gross Margin 34% 46% 68%

Operating Cost 20% 26% 47%

Sales/Marketing, G&A 14% 20% 34%

R&D 6% 6% 14%

Operating Profit 14% 20% 21%

IT Service Gross Margin 34% 32% 19%COPYRIGHT © 2015. DR. JUNE SUNG PARK.

TYPE 1-3: COUPLED TO SURVIVE


Less successful vendors are forced to provide IT services if

the product architecture does not allow parameter-based configurations or API-based bolt-on

the vendor has not created a mass market and has few IT service partners

the vendor faces competition from commoditized products and market saturation.

Once special enhancements of the source code are done for individual customers, the maintenance releases also become more costly because the upgrades must reflect those individual enhancements.

Coupling of professional services with the vendor’s own products can cause conflicts with channel partners such as pure IT service companies and have a negative effect on its software product business.

As a software product company expands its IT services to differentiate its position from other product competitors, the more unique labor-intensive projects it undertakes, the more people it needs, and the more it should operate like an IT service company.

This transition, if not carefully prepared and executed, could accumulate large losses from engagement projects since the IT services business’ operating models and capabilities are fundamentally different from those of the software products business.

A hybrid software company needs to establish a hybrid operating model that can run both the products business and services business successfully—a management skill very hard to master.


i2 was founded in 1988 as a pioneer of SCM.

The company grew rapidly (160% p.a.) during 1993-

97, and then came the market boom of Internet-

based SCM driving i2’s revenue to top $1B in 2000.

i2 stock had gone from $20 in 1996 to $111 in 2000,

and then to 41 cents in 2002.

What caused this downturn in 2001-2002?

Faced with Dot Com crash and increased

competition from SAP and Manugistics, i2 turned to

tailoring its products and offering consulting and

other services for specific customers to give it an

edge over competitors, often bearing the service

cost itself.

i2 Technologies


SAP with APO

integrated with R3

Potential

Entrants

Buyers

Industry Competitors

Suppliers

Substitutes

i2

Technologies

Manugistics with

a low-end product

Dot Com

bubble

burst

Writing off

failed acquisitions

causing i2 a loss of $8B


Licenses portion of its revenue fell

from 75% in 1994 down to 20% in

2001.

i2 did not establish repeatable

sales, maintenance, upgrade and

customer engagement processes

that become essential as the

company passes beyond the start-

up phase.

i2 did not standardize and improve

its software architectures and agile

software development disciplines.

As a result, it cost i2 $9 for every

dollar of sales in 2001.

JDA Software purchased i2 at

$400M in 2010.

i2 Technologies


Service Revenues as % of Total Revenues i2 Technologies Stock Price

TYPE 2: DECOUPLED HYBRID BUSINESS


IBM has been very successful with the service-product decoupling model where professional services are decoupled from their own products, meaning they should carry even competitors’ products in IT services if the customer want them.

In 1980 when the PC era was starting, IBM allowed a new business unit to enter the market; however, it underestimated the impact PCs would have on its primary business.

In 1993, when IBM recorded the largest annual loss in corporate history, $8.9B, Louis Gerstner, the ex-McKinsey consultant, came in as CEO.

His strategy was to leverage IBM’s R&D breadth and its ability to be a one-stop shop for different kinds of hardware, software and services.

He set up a new services unit called IBM Global Services to sell bundles of hardware, software, maintenance and consulting services. Its mission is to sell and service not only IBM products, but also the products of major rivals such as Microsoft, Oracle and Sun Microsystems.

HP and EMC are other examples of the decoupled hybrid software business. Louis V. Gerstner, Jr., Who Says Elephants Can’t Dance? Inside IBM’s

Historical Turnaround, HarperBusiness, 2002.

SW 업종별핵심성공요인IT서비스/CSB 사업성공요인| CSB 사업의추가요건 | SW제품/SAAS 사업성공요인 | SAAS 사업의추가요건


IT서비스/CSB사업 = 전문기업서비스사업 = 지식집약형인간사업


IT service business is “people business” defined as companies with high employee costs as a percentage of sales and with low investment in capital.

People businesses are the fastest growing sector in developed economies.

IT service business sells professionals’ time.

Customers buy IT services because service professionals have special knowledge and skills to significantly improve their business performance, which their internal IT staff don’t have.

Felix Barber and Rainer Strack, The Surprising Economics

of a People Business, Harvard Business Review, 2005.

ECONOMICS OF IT SERVICE/CSB BUSINESS


People businesses have different business economics and need to be managed by different rules than manufacturing or capital-intensive service businesses.

Employees represent both the major cost and the major driver of value creation.

A small change in employee productivity has a big impact on profitability.

Employee Productivity = [ Revenue - Supplier Cost –Depreciation – Cost of Capital ] / Number of Employees

In IT service business, Talent Management needs to be a core operational process and not solely a support function run by the human resource department.

F. Barber, P. Catchings, Y. Morieux, Rules of the Game for People Business, Boston Consulting Group,

April 2005.

IT 서비스/CSB사업과 SW제품사업의차이


Intangible-asset-based businesses,

such as software product and

pharmaceuticals businesses, are

people-intensive businesses, but

because of their high investment in

intangible assets, have significantly

different business economics and

strategies than people businesses.

F. Barber and R. Strack, The Surprising Economics of a

People Business, Harvard Business Review, June 2005.

IT서비스/CSB사업의성숙도모델


People business can be classified into

high-value-added talent businesses

and low-value-added services.

Firms may start with low-value-added

services and transform them into

high-value-added services by building

organizational intellectual asset that

creates substantial value over and

above the value of their employees.

IT service companies can significantly

increase the added value by making

transition from labor-based services

to asset-based services.

Most global IT service vendors provide

asset-based services.

F. Barber, P. Catchings, Y. Morieux, Rules of the Game for People Business, Boston Consulting Group, April 2005.

Economies of Scale

Productized Assets

Globally Integrated

Operation

Economies of Scope

Asset-Based Service

Labor-Based Service /

Specialist

Labor-Based Service /

Generalist

IT서비스/CSB사업의특성


시장: 막대한 규모 + 고속성장

Asset-Based IT서비스 기업의 독차지

사업 유형 = 전문 서비스 사업

영업과 실행의 분리 불허

사업 성장 = 종업원 증원

서비스 생애주기 전반에 외주 불허

Senior / Junior 비율 및 협력체계 중요

사업 이윤 = 전문가 역량

전문가 단가, 전문가 가득률, 전문가 생산성 재사용 자산축적

IT서비스 전문가 역량 = 사내 교육훈련 프로그램의 품질

표적고객 = IT성숙도 높은 IT Smart 고객

Customer Reference, Reputation

서비스 자산: 고객 프로젝트에서 수확

R&D = Service Engineering (not Product Engineering)

사업 안전성: 컨설팅/SI 사업과 ITO 사업의 균형

Infosys Cap Gemini Accenture

2004 Number of Employees 25,634 59,324 100,000

2008 Number of Employees 91,187 91,621 186,000

2004-08 Workforce Increase 256% 54% 86%

2008 Net Revenue $4,176M $12,429M $23,387M

2008 Net Revenue per Capita $46K $136K $126K

2008 Profit $1,155M $1,062M $3,012M

2008 Profit per Capita $13K $12K $16K

IT서비스/CSB사업의핵심성공요인


표준 사업프로세스

직무/직급 설계

직무/직급 별업무/산출물 정의

업무/산출물 간상호의존성 정의

선진 방법론 및 툴

전사 직무/직급 별 교육커리큘럼

재사용 자산 관리프로세스 / 자산 기반서비스

IT서비스/CSB사업의경영프로세스


ServiceStrategy

ServiceEngineering

ServiceProposal

ServiceDelivery

ServiceResourcePlanning

ServiceResourceAllocation

ServiceMarketing

Serv

ice E

ngagem

ent

Service Portfolio

Serv

ice A

ssetiz

atio

n

SERVICE ENGINEERING


Service Engagement

Service Engineering

EngagementProcess

Phase

Service Marketing

CustomerService

Portfolio

ServiceContract

Service Delivery

Work BreakdownStructure

Artifact

Activity

Methodology

ServiceDeliverables

SolutionArchitecture Reusable

IP Asset

EucationCurriculum

Course

Learning Object

Employee

Organization Unit

Service Cost

Service Value

Service Proposal

Service Price

Suppliers

CompetencyJob/Role

EngagementTeam

ResourcePlanning

ResourceAllocation

ServiceCatalog

IT서비스사업의경영프로세스 IBM Global Service


IT서비스사업의경영프로세스

Jerry Greenberg and Stuart Moore founded

Sapient with $80,000 of their own fund in

1990 when both were in their 20s.

Sapient focuses on clients like no one else,

specializing in selective industries —financial

and commodity trading, government and

digital marketing.

Sapient’s revenue doubled every year from

1990 to 2000 to reach $503M.

As of 2010 Sapient employed 8,700 and

posted a revenue of $864M generating an

operating profit of $64M.

Sapient


IT서비스사업의경영프로세스

Engagement Process: Sapient | Approach

The process is directed toward getting the users, business executives, and technologists in full alignment.

It is characterized by a focus on business results, highly visual approaches, clear scope and accountability, and the

use of cross-functional teams from both the client and Sapient.

Each stage is a fixed-price, fixed-time component, allowing the client to make a decision about continuing the

project at end of each phase.

Sapient requires clients to work together at Sapient offices. If a client could not commit enough to participate in

the full process, Sapient is not likely to take on the engagement.

If a client want Sapient only to provide technological fixes and not to pursue the underlying business problem,

Sapient may pass on that project.

Sapient


1-week “Fusion” 3-12 month Implementation1

2Half-several years Operation

4

3

1-3 month Solution Prototype

IT서비스사업의재사용자산


The move to asset-based services (ABS) will force IT service providers to invest in new operating models that

differ significantly from their traditional models and are closer to the ones leveraged by software product vendors.

IT service providers will need, among others, to recruit new skills such as product and portfolio managers,

incentivize the creation of software assets, fund and incubate the creation of solution accelerators.

Process Reference Model SOA Reference ModelComponent Business Model

IT서비스사업의재사용자산

Accenture Software develops software assets, each focused on a specific industry or business function.

Software assets are used in a range of delivery models: on-premise, managed service, “as a service” or BPO.

Software assets are easy to implement, using tools and accelerators to speed up implementation.

Accenture


Accenture Life Insurance Platform: Product Factory

Product Factory exposes standardized SOA services for

key underwriting and policy administration functions and

its integrated third-party engines such as Fair Isaac’s rule

engines and Oracle’s rating engine.

ASSET-BASED SERVICE MANAGEMENT


Candidate Asset

Identification

Asset Production

Asset Consumption

Asset Management

Reuse Program

Management

Asset Production

Asset Management

Asset Consumption

feedback

feedback

Reuse Program Management

Asset Identification

Identified

Specified*

Under

Development

Open Source, COTS

or SaaS acquired

Submitted

Certified

Classified

Published

Under

Reuse

Under

Modification

Reuse

Reported

New version

Request

for change

Asset Lifecycle



WEB의진화


2003-20101991-1993 2011-20151994-2002

Amazon opens e-

tail shop (1994)

Salesforce.com

launches SaaS

(1999)

AOL bought Time

Warner (2000)

Webvan fails losing

$1B (2001)

Amazon launches

AWS (2003)

E-business ends by

2008. (Gartner

2000)

SOA prevails by

2008 (Gartner 2003)

Google launches

PaaS (2008)

By 2012 80% of

Fortune 1000 use

cloud services

(Gartner 2009)

2016-2020

AT&T, Cisco, GE

and IBM forms

Industrial Internet

Consortium to

integrate physical

and digital worlds

(2014)

IT HYPE CYCLE

COPYRIGHT © 2016. DR. JUNE SUNG PARK. 77Gartner, Hype Cycle for Cloud Computing, 2014

IT MEGA-TREND: SMACI


Built and run on

Drive use of

Store and process

Generate

Mobile

Big Data

AnalyticsCloud

Social

IoT

DIGITAL BUSINESS


DIGITAL BUSINESS

Ford expands connected services for customers

around the world with the cloud-based Ford

Service Delivery Network, powered by Microsoft

Azure.

Ford Connected Car


DIGITAL BUSINESS

Practice Fusion, a SaaS startup founded in 2005 to provide a

free web-based EMR, serves over 100,000 medical

professionals with 81,000,000 patient records in 2014.

Verizon, a Telecommunication carrier, provides a mobile

healthcare platform which matches patients to the next

available clinician in the participating healthcare organization.

Connected Healthcare


DIGITAL BUSINESS

디지털정부의 실업자구제 프로세스

Digital Government


박준성, 디지털정부 구현 전략과 방안. 2015 지역정보화백서 특집편, 한국지역정보개발원 (2016년 1월 발간예정)

DIGITAL BUSINESS

디지털정부의 실업자구제 프로세스

Digital Government


DIGITAL BUSINESS

Intel set up the cloud adoption

strategy and process based on

the ODCA framework:

Conducted an environment scan.

Created cloud definitions,

attributes and taxonomy.

Identified potential benefits and

risks of cloud services.

Developed a cloud use case

model.

Revised the enterprise

architecture to accommodate

cloud services.

Developed cloud adoption

roadmap.

Intel


“We aligned IT priorities

to Intel’s key focus areas.

We extend our

investments in SMACI to

accelerate Intel products

TTM, grow revenue and

improve operational

efficiency.” Kim

Stevenson, CIO

DIGITAL 경영시대의 IT 필수역량


ISP EA

PI BPM

CBD SOA

Custom Dev’t/Packaged App SaaS

RDB/DW MDM/NoSQL/Analytics

Middleware PaaS

Data Center IaaS

CLOUD SERVICE 사용사례

COPYRIGHT © 2016. DR. JUNE SUNG PARK. 86Ravi Vijayaraghavan, The Cloud Reshapes the Business of Software, Bain & Company, 2013.

CLOUD SERVICE 도입모델

COPYRIGHT © 2016. DR. JUNE SUNG PARK. 87Public

Clo

ud

Pri

vate

Clo

ud

On-P

rem

ise

Public C

loud

Host

ed

Pri

vate

Clo

ud

Managed

Serv

ice

Host

ing

Serv

ice

Uti

lity

Serv

ice

User OrganizationExclusive members

Open to anyone

Computing

Resource

OwnershipOwned by user

Owned by provider

LocationUser premise

Provider’s data center

UseDedicated to user org.

Shared with other org.

Service ManagementDone by user

Done by provider

Payment for ServiceBy strategic contract

Per use

ON-PREMISE PUBLIC CLOUD

U.S. Intelligence Agencies including CIA, FBI, NSA cloudified its data center using AWS IaaS platform.

It’s a public cloud on private premises behind very thick firewall in Langley.

CIA


PRIVATE CLOUD 참조아키텍처


PRIVATE CLOUD 개발전략


You don't need to build an AWS/Google

clone internally.

Failure happens because you try to

automate too much, too soon.

Enterprises should focus on delivering the

value and the benefits they need,

regardless of whether that fulfills the

"definition" of private cloud.

Alan D. Waite, “Why Private Clouds Keep Failing (And What To Do About It)” Gartner, 2014.

Reasons Why Private Cloud Fails

PRIVATE CLOUD 개발전략


Give preference to available public cloud or

hosted private cloud services.

Choose private cloud when public cloud services

are not suitable.

Use open source software and open standards to

build private clouds as long as you have sufficient

skills to do that.

Use cloud-in-a-box, providing prepackaged

integrated cloud stacks, available from

companies such as Cisco, Dell, HP, IBM, Microsoft

and VMware, to build private clouds if you have

less skills.

Build the skills of your IT staff necessary to build

and operate private cloud. These skills are

difficult to acquire fast.

Bear in mind that private cloud requires not just

technological, but also cultural and

organizational, changes.

David M. Smith, et al., “Predicts

2015: Cloud Computing Goes

Beyond IT Into Digital Business,”

Gartner, November 24, 2014.

Reasons for Not Considering Public Cloud

Maturity Level

Business

Application

Infrastructure

IT Service

Management

PRIVATE CLOUD 성공요건


Understand the current maturity level of your company’s IT and business users.

Take the next step to improve IT capabilities and business-IT alignment with a long-term roadmap to cloud.

Process IntegrationEnterprise

Architecture

Process

Orchestration

Process

Reengineering

Application

Integration

Service-Oriented

ArchitectureSaaS based on PaaSApplication Silos

Data Center

ConsolidationVirtualization IaaSLocal Data Centers

ITIL-Based ITSMVirtual Infra Mgmt

Platform

Cloud Mgmt

Platform

No IT Service

Process

박준성, 클라우드 도입 전략 및 프로세스, 클라우드 기술보고서 제4호 , 미래부 클라우드지원센터, 2014.

(http://cloudsc.kr/?pageid=1&page_id=77)

http://cloudsc.kr/?pageid=1&page_id=77

CLOUD SERVICE 도입방안


Refactor

Replace

Rehost

Revise RebuildApps Redesignedfor PaaS

Apps Rebuilton PaaS

Replace Apps by SaaS

Apps Moved to IaaS

Apps Movedto PaaS

CLOUD SERVICE BROKERAGE: REBUILD Private SaaS on Public PaaS


Japan Post

Japan Post, the world's largest financial institution, developed a custom, on-demand application for

CRM in 2007. HitachiSoft developed the application within 3 months using Salesforce.com platform.

More than 45,000 users have been subscribed to the Force.com platform.

The value of goods sold on eBay was nearly $60 billion in 2009. eBay, with massive infrastructure to

support the sales volume, is always looking for ways to drive IT efficiencies and service improvements.

eBay and Microsoft worked with Avanade and Accenture to transport eBay’s iPad marketplace onto

Windows Azure platform hosted on the public cloud.

Appirio, a CSB startup company, developed sales and HR applications for Facebook using Force.com

which is a SaaS development platform provided by Salesfoce.com as a service.

CLOUD SERVICE BROKERAGE: REVISE Private SaaS on Private PaaS


COSCO

China Ocean Shipping Company (COSCO), world’s second largest ocean shipping company, is trying to

make its transportation, shipping, order, billing and payment management systems available as SaaS

(as SOA services) from its private cloud to its employees, customers, subsidiaries and distributors. For

instance, it uses Singapore-based UFIDA’s HR solution in SOA to provide private SaaS for HR

management.

Bechtel

Bechtel uses its private cloud to establish common processes, apps and work flows for partners,

employees and contractors working on projects. Bechtel's new strategy applies the SaaS computing

model internally to provide IT services to 30,000 users, including 20,000 employees and 10,000

subcontractors and other business partners.

Mayo Clinic

Hospitals such as Mayo Clinic, New York-Presbyterian Hospital, Kaiser Permanente have developed a

cloud-based medical information platform that provides patient data to both physicians and patients.



SW제품/SAAS사업의특성


사업 유형 = 출판업

핵심 자원 = 제품별 1인의 천재적 창의력 / 개발역량 보유자 (Mozart of Modern Age)

사업 성장: Mass Market 창출, Volume Sales

Disruptive New Products + Product Variants + Frequent Upgrade (Amazon 11.6 sec; Google 1 week release cycle)

Cross the Chasm with ‘Whole Product Solution’; Winner takes All. (Bandwagon Effect)

Inorganic Growth; Positive Feedback Effect with an Ecosystem of up and downstream partners (Network Externalities Effect)

Customer Base Paying Maintenance Fee (매출의 50%)

사업 이윤 = 80% 한계이익

재생산 원가 Zero

Single Code Base / Single Instance 고수

사업 원가 = R&D + Marketing & Sales (매출액의 40%)

표적고객 = Minimum Feature Set / Maximum Coverage

Start with a Vertical Foothold; Grow it to a Horizontal Product—a Blockbuster

R&D: Customer Development Process (Lean Startup) + Agile SWDP (Scrum + XP)

사업 안전성: High Highs & Low Lows Market

신규 라이선스 매출(One Time, Discretionary)과 유지보수 매출(Recurring, Nondiscretionary)의 균형 유지

Michael A. Cusumano, The Business of Software, Free Press, NY, 2004.

McKinsey, Secrets of Software Success, Harvard Business School Press, 1999.

SW제품/SAAS 사업의핵심성공요인


Product Manager (a.k.a. Product Owner)

Single Code Base / Single Instance

Agile Product Development Process (e.g. CDP, Lean Startup, Scrum, XP)

Model-Based Development using State-of-Art Methods & Best-in-Class Tools

Layered, SOA (Web Services, REST Services), Multitenant Architecture

Ecosystem of Up & Downstream Products

Expertise on Open Source Software

Frequent Release with Continuous/Automated Integration & Test

SW Talent Management

Mass Marketing Skills (esp. Web Marketing)

Google 2013Account manager: $68,188

SW engineer intern: $82,488

SW engineer: $103,436

Product manager: $119,495

Emily Moxley

PM, Knowledge Graph

PhD in Computer Vision

SW PRODUCT MANAGEMENT (SPM)


SW제품성숙도모델


Level 0

Level 1Level 2

Level 3

Level 4

Level 5Level 6

Licensing White-Box

Package with

Source Code

changed for

Customization

(Multiple Code

Bases): Open Source

Licensing

Configurable

Application Package

with Configuration

Parameters for

Customization

(Single Code Base):

Packaged Apps

Hosting

Configurable

Application Package

by 3rd Party with

CBOs for

Customization

(Single Code Base /

Multiple App

Instances): ASP

Hosting

Configurable

Application Package

Hosted by its

Vendor (Single Code

Base / Multiple App

Instances): Hosted

Apps

Licensing Composite

Application Package

in SOA (Single Code

Base):

SOA Packages

Single-Tenant SaaS

on PaaS / IaaS

(Single Code Base /

Multiple App

Instance):

Single-Tenant SaaS

Multitenant SaaS on

PaaS / IaaS (Single

Code Base / Single

App Instance):

Multitenant SaaS

PaaS/

IaaS

PaaS/

IaaS

SOA SW제품

Process-driven composition of service, event and human task

Auto-generation of UI from the process model

SAP


SW제품/SAAS사업프로세스


SaaSStrategy

SaaSWeb

Marketing

SubscriptionFulfillment

SLA Assuranceand Billing

SaaS Infraand ProductDevelopment

ProductStrategy

ProductMarketing

ProductLicense andMaintenance

Sales

CustomerSupport

ProductDevelopment

Software Product

Business

SaaS Business

SW제품개발전략: WHO WILL PAY FOR YOUR PRODUCT AND WHY?


A good strategy focuses on the value proposition—the value that your company provides to customers.

A clear definition of the value proposition leads you to understand who your customers are, what business you are

really in, and who your potential competitors are.

Value Proposition Canvas

Use Cases

Gain

Creator

Pain

Reliever

Gain

Pain

User GoalsValue

PropositionCustomer

Fit

http://www.businessmodelgeneration.com/canvas/vpc

http://www.businessmodelgeneration.com/canvas/vpc

SW제품개발전략: KNOW YOUR ENEMIES & FRIENDS!

104

Changes in the competitive environment forces your company to adjust its business strategy and business assets.

Your competitive advantage is sustainable if your product create distinctive value proposition to customers that is

rare, hart to imitate, and irreplaceable and keep the bargaining power of both customers and suppliers low.

You should also collaborate with complementors and create a positive feedback effect.

Potential Entrants

Buyers

Industry Competitors

Suppliers

Substitutes

Your

Company

M. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors, The Free Press, 1980. W. Kim and R. Mauborgne, Blue Ocean Strategy, HBS Press, 2005.

Michael Porter’s Five Forces Model Driving Industry Competition Strategy Canvas

SW제품개발전략: DESIGN YOUR BUSINESS MODEL FIRST.


UpstreamPartners

BusinessProcess

Resource

Product /Service

ValueProposition

Customer

Cost Revenue

DownstreamPartners

Business Model Generation (http://www.businessmodelgeneration.com/; https://strategyzer.com/)

http://www.businessmodelgeneration.com/

https://strategyzer.com/

Plan-Driven Product Development Process Customer Development Process

Type I: Bring a new product into an existing market

(Sustaining Innovation)

With the users and the market and the competitors known, you

differentiate the product to offer higher performance than

existing products.

Type II: Bring a new product into an existing market, but re-

segment it as a niche entrant (Sustaining Innovation)

Niche segmentation aims at some part of an existing market

who will buy a new product radically redesigned to address their

specific needs even if it costs more.

Type III: Bring a new product into an existing market, but re-segment it as

a low-cost entrant (Sustaining or Disruptive Innovation)

Low cost segmentation aims at the low-end of an existing market who will buy

good enough performance at a substantially lower price.

Type IV: Bring a new product into a new market (Disruptive Innovation)

You create a large customer base who can and will do something that they

couldn’t do before—Creating something that never existed before, or solve

painpoints in a way no other product has solved.

SW제품개발프로세스


Concept / Business

Plan

Product Dev't

Alpha/Beta Test

Launch /1st Ship

CustomerDiscovery

CustomerValidation

Customer Creation

CompanyBuilding

Steven Blank, The Four Steps to the Epiphany, 2006. Eric Ries, The Lean Startup, 2011.

PLAN-DRIVEN SW PRODUCT DEV'T

In 6 months after 1st ship, 71% of orders were from the same customers; daily orders was on average 2,500 while the

business plan forecast 8,000, a number necessary to make profit.

By end of 2000, Webvan accumulated a deficit of $600M. 7 months later it went bankrupt.

Webvan


1998 1999

Built warehousesand software

After 1,100 beta testslaunched Webstore

IPO raising $400M (Market Cap $8.5B)

20001996 1997

Founded

Raised $400M VCduring 1997-99

Product Dev’tBeta Test /

LaunchConcept /

Business Plan

2001

Bankrupt due to

lack of enough customers

and staggering infra costs

CUSTOMER DEV'T PROCESS

A social network and entertainment site where members use 3D avatars to meet, talk, play, create, buy and sell

Founded in April 2004.

Followed the customer development process.

Designed to test hypothesis and answer unknowns.

Minimum feature set, maximum customer coverage

Leveraged IT commoditization (i.e. cloud services).

Used extreme programming approach and agile management practices.

Shipped in 6 months; Charged from Day 1; No press release

Ships 20 times a day.

Now has the world’s largest virtual goods catalog of 10M+ items created by 100M+ members.

IMVU




CLOUD SERVICE 정의


Get it yourself

Shared

Infrastructure

and

Multitenancy

Elasticity and

Scalability

On-demand

Self-service

with Simple

Interface

Consumption-

Based Pricing

Learn to share

All you can eat Pay per use

박준성, SaaS에 대한小考, 클라우드 기술보고서 제1호 , 미래부 클라우드지원센터, 2013.

(http://cloudsc.kr/?pageid=1&page_id=77)

http://cloudsc.kr/?pageid=1&page_id=77

CLOUD SERVICE 유형


P

I

P

P

A

A

I

P

A

P

I

GoogleSalesforce.com,Facebook

AWS

CloudFoundry

Azure

SAP SuccessFactors

IaaS PaaS SaaS

A

A

Netflix

CLOUD SERVICE 참조아키텍처


Learn to share

All you can eat

Pay per use

Get it yourself

Shared &

Multitenant

Self-service

Elasticity &

Scalability

Usage-Based

Pricing

CLOUD SERVICE 참조아키텍처


Cloud Service

Infrastructure & OfferingCloud Service Strategy

Cloud Service

Marketing & Sales

Cloud Service

Assurance & Billing

Automates AutomatesEnablesDevelops

PAAS 참조아키텍처


CLOUD MANAGEMENT PLATFORM (CMP) 참조아키텍처


CLOUD SERVICE 요소기술


Softw

are

Engin

eerin

g M

eth

od

Open S

ourc

e S

oftw

are

Infrastructure Virtualization

Application Platform

BPM, SOA and MDM

Web 2.0 and Social Computing

IT Infrastructure Library

QoS-Guaranteed B-Internet

CLOUD SERVICE 산업구조


Cloud Service Providers

PI I I

PA

I

PA

I

P

A

I

P

IaaS PaaS SaaS

Cloud Service Brokerage

Cloud ServiceAggregation

Cloud ServiceIntermediation

Managed Cloud ServiceCloud Consulting

Cloud ServiceMarketplace

Cloud ServiceImplementation

Cloud Service Management Platform

BSS OSS

Cloud Service Consumers

PAC

A AC C

AmazonRackspace

eVaptZuora

BMCCloudSwitch

GoogleSalesforce

AzureCloudFoundry

AccentureAppirio

LiaisonStrikeIron

CLOUD WASHING


Cloud washing is the purposeful and sometimes deceptive attempt by a vendor to rebrand an old product or

service by associating the buzzword "cloud" with it.

Cloud-washed software services are also called “fake clouds.”

SAAS

Product Vision

Tien Tzuo, ex-chief strategy officer of

Salesforce.com, and K. V. Rao, ex-head of

strategic marketing and business development

at WebEx, founded Zuora in December 2007.

Zuora’s vision was that the world was moving

towards the subscription economy, so that a

state-of-the art, flexible and low-cost billing

solution will become increasingly valuable.

Rhapsody eliminated the need to buy music tracks.

Netflix allowed people to subscribe to the whole

library of movie DVDs.

Zipcar eliminated the need to buy cars, turning

car transportation into a pay-as-you-go utility.

Zuora


SAAS

Product Value Proposition

Tzuo and Rao both knew that billing solutions are a huge unaddressed paint point for SaaS companies—it plays a

critical role in growing a SaaS business, but building one is a money pit because it is so complicated to make it

flexible and scalable.

It takes 6-12 months and cost hundreds of thousands dollars to implement a system in-house for subscription pricing and billing.

For example, Redhat spent $20M in order to create a billing system in-house.

Customer Validation

Zuora worked with 5 alpha customers to develop the billing module called Z-Billing by May 2008, and then developed

Z-Payments with partnership with PayPal by October 2008—both aimed at subscription type businesses.

Zuora got the Series-A funding with Benchmark Capital and Marc Benioff leading the $6.5M investment.

By the end of 2008 Zuora had already sold the Z-Billing product to 70 customers.

Zuora raised a second round of $15M from Shasta Ventures and Tenaya Capital.

Zuora


SAAS

Mass Market Creation

In January 2009, Zuora released Z-Commerce, online billing platform geared towards the cloud developers who could

use Zuora’s service in a plug-and-play model.

This product allows Java, Ruby and Force.com developers to plug in a few lines of code in their service and use Zuora’s full-

fledged billing, payments and subscription service management services.

In November 2010, Z-Force was launched which is a billing and payments service that resides on Force.com, aimed at

instant access to the huge customer base of Salesforce.com.

Zuora


Product Catalog

Customer Subscription

Billing Operation

Taxation

Customer Accounts

Payment Operation

Collections

SAAS

Software Development

Zuora has about 20 developers operating out of Beijing and 7 developers in Redwood City, California led by Ryan Choi.

Products are run (without its own data center) on a set of cloud services from companies like CVSDude, Amazon, Marketo and Google apps (instead of Microsoft Office).

Zuora adopted an agile development process anchored by a modified scrum methodology and is able to release new versions of its applications every 4 weeks.

Zuora hires people with multitasking ability—someone who is a jack-of-all-trades.

Marketing and Sales

Generated a high level of awareness of the company and its products in the marketplace, then using that awareness to drive people to its web site.

Web visitors are encouraged to identify themselves, then contacted by a sales development team responsible for qualifying the leads.

Qualified leads were then passed to an account executive.

Zuora is pushing a wide spectrum of customer segments with deals ranging from $1K to $100K.

Churn management is treated a critical part of the business model because customers only pay as long as they continue to use the service.

Zuora


SAAS BUSINESS PLAN TEMPLATE


SaaSBusiness

PlanTemplate

WHERE TO LEARN MORE


과정 순번 훈련과정교육

시간강사 강의장 강의 일자

1 SW 제품개발, 창업 및 경영의 성공전략과 프로세스 8 박준성 KOSTA 판교 1/ 15

2 IT서비스 사업의 경영전략과 프로세스 8 박준성 KOSTA 판교 1/ 20

3 클라우드서비스 사업의 경영모델과 성공전략 8 박준성 KOSTA 판교 1/ 21

4 클라우드 도입 전략 및 프로세스 8 박준성 KOSTA 판교 1/ 27

5 비즈니스 및 SW 요구분석 8 박준성 KOSTA 판교 1/ 29

6디지털 경영 시대의 SW공학 프로세스의 최근추세와

적용방안8 박준성 KOSTA 판교 2/ 3

7경영전략/경영혁신 방향에 맞춘 SW인적자원

양성로드맵 설계 및 관리 기법8 박준성 KOSTA 판교 2/ 5

문의처: 한국SW기술진흥협회(KOSTA) 황승억 선임 | [email protected] | http://www.kosta.or.kr

mailto:[email protected]

http://www.kosta.or.kr/

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