A Xoriant Whitepaper

Many software product companies have found that releasing a new product is often easier than retiring an old one. While major organizational resources are spent in the product development and release cycles, many times product retirement becomes an expensive afterthought.

Outdated software can turn into a monster for both software vendors as well as the users alike, if not planned properly. Both the parties (product vendor and customer) tend to look at the same issue from totally different angles, both completely legitimate, but which create a chance of major stomach pains if the end-of-life process management not planned and executed properly from both sides. Well-managed software companies have a well-documented process for managing end-of-life products. Many of them partner with external specialized services vendors to carry on the support and sustaining of their end-of-life products, while focusing their own resources on developing and supporting their newer versions.

For the software vendor many simple but not-so-trivial problems arise: •Howdoyoudiscontinueaproductthatisnolongerprofitable?Andhowdoyouknowthat

it’stime? •Howdoyouplanproductrequirementwiththesamevigorthatyouusetoplanbirthand

growth of a new product? It is very difficult to practice product life cyclemanagement in real-life.

•What’stheworstthingthatcanhappentothediscontinuedproduct?Theworstthingissomepossible complaints from those customers, who continue to use the old product.

•Whatabouttechnicalsupport?Whataboutdemandsforanewfeature?Whataboutmigrationtonewoperatingsystems?

•Howmanydevelopmentresourcesandotherresourcesarebeingspentontheoldproduct,whichcouldbeappliedtoamorestrategicallyimportantproduct?

While the software vendors do their best to move their existing enterprise clients to the newer and newer version of their software (and thereby have much less number of versions to be supported), many enterprise software users refuse to upgrade, thus continuing to use the old versions. Some of those reasons are: •Theoldimplementationworkswell.Thereisnoreasontochangeanything. •Costof theupgradeheavilyoutweighs theextrabenefitsprovidedby thenewerproduct

versions

Tail Wagging the Dog – Managing End-of-Life Phase of Software Products

•Largerthanexpectedreimplementationprojectforlittlenewfunctionality •Expensiveintegrationeffortsbreakduetoupgradesorsystemchanges •Lengthy(measuredinmonths&years)implementationwithcontinualdelays •Significant,unexpectedcostsoflicensetransfer •High-costconsultancyfeesrequiringspecialized“vendordelivered”resources

Evenifsoftwareproductvendorshaveidentifiedthespecificproductstoberetired,thereareseveralexecutionchallenges? •Staffing:Howdowepracticallystaffupfortechnicalsupportandsustainingengineeringfor

aportfolioofretiredproducts?Ifthisportfoliocomprisesdiverseproducts,itislikelythatin the worst case scenario, these product companies end up having expensive resources managingtheproducts,whicharenolongerstrategicallyimportanttothecompany.Itisalsoverydifficulttoretaintheseknowledgeablepersonnel,especiallythosewhocomparetheirjobs with the much more glamorous development jobs in the rest of the company.

•Processes and Knowledge: Since management of retired or retiring products is seldomconsidered to be a strategically important activity, software companies end up investing significantly fewer and insufficient resources inpeople,processes and systems (includingknowledge management) in supporting this activity. Many times, employees who support these activities consider keeping this knowledge undocumented and in their own head as a means of job retention.

•Profitability/Longevity:Sincethe“end-of-life”announcementfortheproducthasalreadybeenmade,itisverydifficulttoestimatehowlongthemaintenancerevenuestreamwouldcontinuefortheproduct.Itisreasonabletoassumethatmanycustomerswouldbeevaluatingoptions such as upgrading from the same software vendor or replacing the product with a newsolution.Hence,itisverydifficulttoassignresourcesprofitablytosupporttheproductintheEOLstatus.

Tostretchthelifeandmaintenancerevenuesandtomaintainalockonthecustomersforthepost-announcement end-of-life products, many software product companies use the resources of strategic servicespartnerstosupporttheseEOLproducts.Sincethepartnerresourcesaretrainedtosupportthe end-of-life products and since the processes, systems and knowledge management infrastructure of the partner are tuned for these support tasks, not only can these products be supported until it is

What are the alternatives?

profitabletodoso,butthepartnerresourcescanbescaledupanddowntoreflectthecorrespondingproductmaintenance revenues.Thisflexible staffing (and hence cost)model allows the productvendortoensurethattheend-of-lifeproductsarealwaysprofitableuntiltherevenuesnaturallydie.

Atypicalproduct lifecycletimelineusing internal resources isshownbelow. Itcanbeeasilyseenthatsincetheinternalresourcesarealwaystoughtofind,motivateandeffectivelydeploytosupportend-of-life products, the product typically stops yielding revenues after about one year after the announcement of end of life.

Ontheotherhand, a typicalproduct lifecycle timelineusingpartner resourcescandefinitelybestretched almost by one to two and evenmore years, yieldingmore revenues, profits and highercustomer satisfaction.

Typical Product Life Cycle TimelineInternal Resources

2 - 3 Years

GeneralAvailability

EOLAnnouncement

End ofEngineering

End ofSupport

1 - 1.5 Years3 - 6 Months

Typical Product Life Cycle TimelineWith Partner

2 - 3 Years

GeneralAvailability

CompanyPlusPartnerResources

Partner Resources only

EOLAnnouncement

End ofEngineering

End ofSupport

1 - 4 Years3 - 6 Months

Partner Involvement

Itcanbeseenthatthelifespanofaproductaftertheend-of-lifeannouncementtypicallyincreasesforproductswhicharesupportedbypartnerresources.Thisresultsinhigherrevenuesforthesepartnersupportedproducts.Also,sincethepartnermodelisavariablecostmodel,italsoyieldshigherlifetimeprofitability.

Many companies are leveraging specialized partners to not only enhance the life cycle product revenuesandprofits,butalsofocustheirinternalresourcesonmorestrategicproductdevelopmentandsupport.Theengineeringandproductmanagersoftheseproductcompaniesevaluatetheproductportfolio every year and identify the products for which the support can be transferred to the partner resources.Thatway,theirownresourcescanbefocusedonmorestrategicproducts.Itisthemosteffective way to focus on the core and outsourcing the context.

Xoriant has been partnering with several product companies in the complete lifecycle of their software andsystemsproducts.Thatinvolvesdevelopment,testing,supportandimplementation.Inseveral

Asmentionedearlier,using the resourcesof strategicproductmaintenance/supportpartners, theend-of-life products be supported until it is profitable to do so.Unlike the fixed costmodel ofinternal support resources, the partner resource model becomes highly variable by scaling the partner resourcesupanddowntoreflectthecorrespondingproductmaintenancerevenues,thusensuringall-timeprofitabilityduringtheremaininglifeoftheproduct.Thefollowingcurvereflectsthelifecyclerevenues of a typical product with internal resources and partner resources.

PRODUCT LIFE CYCLE REVENUES

INTRODUCTION

EXTRAREVENUES

WITHPARTNER

EOLANNOUNCEMENT

TIME

REV

ENU

E

INTERNAL

GROWTH

MATURITY

DECLINE

instances, Xoriant teams have sustained not only the old releases, but also the end-of-life products. Over two decades of supporting various technology customers, Xoriant has learnt that the most important factors for success of any product support and sustaining engagement can be summarized as:

Overtheyears,Xorianthasperformedseveralend-of-lifesupport/sustainingof: •Operatingsystem,devicedriversandlanguagesforasystemsmanufacturer •Severalgenerationsofproductsandtoolsforamiddlewaresoftwarevendor •Customized versions of middleware products at two semiconductor and three financial

services companies on behalf of the software vendor •Old generations of wireless gateway and media deployment products of a wireless

infrastructure software vendor •Licenseversionofaenterpriseclasssupplychainsoftwareproductwhiletheproductcompany

launched the SaaS version

Xoriant teams understand that the most critical success factor in end-of-life support engagement is successful knowledge transition from the software product vendor teams to the specialized services vendorteams.ThroughmultipleEOLengagements,Xorianthasdevelopedaknowledgetransitionprocess that focuses on transition planning, knowledge assimilation, shadow support, assisted support

SUPPORT / SUSTAININGSUCCESS FACTORS

Knowledge ManagementUse product vendor’s KM systemand process or partner’sDisciplined assimilation, updatesand dissemination of knowledge

InfrastructureDefine and achieve minimumrequired infrastructure for systems,communications, training and KM

Leverage common infrastructure

ProcessDefine bug classification/tasksPeriodic communications withcustomers and product vendor

Define remediation process

PeopleSelect support oriented peopleImpact continous trainingCross-training and skill backupKeep trained bench for hot swap

Conclusion:

With product releases coming to the market faster and faster, it becomes imperative for the software product vendors to have a well planned strategy for managing the retirement of their software products. Managing the end-of-life phase of the software products is very tricky since the runway available to the software product vendors when they should line up the resources to support the customers who wouldcontinuetousetheproductandpayforthesupportoftheproductisverydifficulttopredict.Thismeansthatthemaintenancerevenuesandhencetherevenuesandtheprofitsearnedduringthelife of the product remaining after the end-of-life is announced are not easily predictable.

Usingaspecialtyvendortoperformtheend-of-lifesupportandsustainingactivitiesmakesitmucheasierforproductcompaniestoturntheirfixedsupportcommitmentsandcostsintovariablecommitmentsandcostswithoutsacrificingcustomersatisfaction.Besides,aspecialtyvendorwhoisinthebusinessof support and sustaining has much easier time attracting and retaining the right people, who follow the right processes and have the right discipline to use and enhance the knowledge management systems.

Having successfully performed support and sustaining activities for various products, current, oldand end-of-life, for the last twenty years, Xoriant is well positioned to partner with software product companies for the end-of-life support of their retiring products.

andknowledgedissimilationtowidergroup.Thisprocessmitigatestherisksrelatedtoknowledgetransition and increases the success probability of the engagement.

Estimate

PlanStudy

Baseline

Learn

KnowledgeTransfer

Demonstrate

Observe

Shadowsupport

Demonstrate

Perform

AssistedPerform

Verify

Change

Steady stateSupport OptimizeTransitionPlanning

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Email: info@xoriant.com