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Product and service portfolio rationalisation not just Google

David Mitchell | Jan. 23, 2009
All companies, no matter how powerful, must review their portfolio

Google recently announced that it was rationalising its portfolio of services, with Dodgeball, Jaiku, and Notebook among the services affected. At the same time it announced that it was trimming back its recruitment function, as the pace of new recruitment has slowed markedly.

All companies, no matter how powerful, must review their portfolio

Ovum logoGoogle is only doing what all prudent companies are doing at the moment: ensuring that it stays as focused as possible, and that it targets resources at the services that have the greatest bottom-line impact. It is not in financial distress, unlike others in the market, and is making decisions that are a reflection of an organisation that continues to grow in maturity.

Each project or service affected had a slightly different rationale. Dodgeball, for example, was an acquisition that lost momentum when the founders left Google. Google Notebook will continue as a service but wont be actively developed, as its forward path became less feasible after the launch of SearchWiki. Likewise, the launch of the Google App Engine meant that other projects didnt have a feasible future or at least as currently architected.

The three stock reasons for project or products being end of lifed, not just at Google, are easy to articulate. First, the product may no longer be attracting enough customers and revenues to merit its continued development. Second, there may have been architectural changes in the industry or narrowly within the product line that make elements of the product obsolete and too costly to bring up to modern standards. Third, products sometimes lose their impetus because key people leave the organisation. Googles decisions have elements of all of these factors running through them, and it is a sign that Google has the same challenges as every other organisation that brings products to market.

Product management will make a comeback

Software vendors need to continue to invest in their product management function, equipping it with the tools that its needs.

Product management, as a discipline, will be one of the beneficiaries of the current economic crisis. When practiced properly, product management works in concert with marketing and sales, to ensure that the products built by the development organisation are the ones that the market wants and, crucially, will pay for. In order to ensure that this synergy occurs fully, the product management organisation will need to focus on a rigorous approach to customer feedback, prioritisation and investment appraisal in a more quantitative way than before.

There has been a tendency in the latest phase of Internet development to take a build it and they will come approach to product development. Even more worryingly, this has been the approach taken by many to their business models, not just to their product development. The hope has been to attract as many visitors as possible, and then to retrofit a monetisation approach into that audience base. Building something because it is cool is rarely a good business or investment rationale.

 

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