...by Daniel Szego
quote
"Simplicity is the ultimate sophistication."
Leonardo da Vinci

Sunday, October 18, 2015

On IT and SharePoint market segmentation

It is interesting to investigate both the IT and generally SharePoint market as well based on the following two dimensions: Market segment and customer flexibility (Figure 1). 

Figure 1. SharePoint market segmentation based on market segment and customer flexibility.

Market segment is basically the standard dimension that is usually described, we can scope from a simple business to customer market to a different business sizes ranging from small business to the enterprise.

The second dimension is perhaps a little bit less standard. It describes how much flexibility do we want to provide for our customers. The simplest way a basic product, that provides some functionality without a too much customization or extending possibility. It is like, if you buy a packed sandwich in a supermarket, you can choose which one do you want to buy, you can not really pack out your sandwich and fill with mayonnaise instead of ketchup. 
The next stage is products with the possibility to heavily customize. They are like eating sandwich at Mc.Donalds, you have the possibility for some variation or customization, however the possibilities are limited. But you can surely choose if you want to have an extra polonaise or ketchup.
Frameworks are not actually 100% ready products but some general building blocks that help you deliver a lot of different products in a fast and efficient way. It is like Subway, you do not really have ready sandwich,  but rather a coupe of basic foods and processes that help you to get a ready sandwich. 
Of course, the last stage is to have fully customized project, you can precisely describe each part of your product. It is as a 5 star restaurant where you can have a small appointment with the chef, describing what kind of a sandwich do you want to eat.

Certainly the bigger customer flexibility means as well that more preparation, more professional stuff are required and of course the whole process can be less automated. As a consequence more customer flexibility implies an increase in cost, so it is not surprising that IT provider companies offering more flexibility to the customers concentrating rather on the enterprise segment.

The SharePoint market can be characterized this way as well: 
- IT companies having small boxed products selling the product mainly as cloud solutions with self service buying possibility and primarily on the B2C market. Typical examples are SharePoint apps.
- As soon as a product has got a a bigger range of customization possibility a certain amount of consulting and pre-sales activity is practical to be delivered as well. Despite the product can be cloud hosted, but the whole sales process is not based on an online shop on a "buy if you want" basis. Such products are for example special Outlook or Mobile components that communicate somehow with SharePoint. 
- It is difficult to distinguish between a product and a Framework. I would say as you are having more and more possibility to customize, more and more possibility to further develop than it is better rather to speak about a framework than a product. The best examples are BPM frameworks like Nintex and K2, however SharePoint itself can be regarded as a general collaboration framework as well.
-  If everything has to be newly invented and developed, than it is better to speak about a 100% custom project. Certainly such projects are pretty much time and resource intensive: time and resources are required for specification for testing and quality for project management and so on. As an example .NET development from scratch can be regarded as custom project.