Jan Bosch is a research center director, professor, consultant and angel investor in start-ups. You can contact him at jan@janbosch.com.


Why you’re a product + service business

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Before digitalization became a thing, the industry was divided into two types of businesses: those that sell products and those that provide services. Those that sell products have a transactional relationship with their customers, mostly consisting of selling one of their products. The service businesses tend to have a more continuous relationship with their customers as services are provided on a continuous basis.

With digitalization, however, we’ve seen an interesting shift driven by a few technical enablers and business drivers. First, the increasing adoption of continuous software deployment has brought about the situation that even product companies have a continuous relationship with their customers. Expectations these days are that the products that we use get better every day we use them.

Second, with data being the new oil, many companies are concerned with collecting as much of it from their products and systems in the field. As many are successful in monetizing the data coming from their primary customer base with a second customer base or have found ways to improve internal efficiency using the data, there’s a significant business incentive to agree with your primary customers on the use of the data from your systems.

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