What is a product?

A product is a good developed for a market rather than an individual customer. Products can be physical, like a car, or virtual, like data or software. Products follow a lifecycle from conception through withdrawal from the market. Product management is a discipline responsible for making the product successful throughout its lifecycle.

We can distinguish products from services. In the classical definition from economics, services are virtual while products are physical. Software challenges this definition. We consider a service as work done on behalf of a client, e.g., training, consulting, office cleaning. Products, including software products, are sold to customers to allow them to do work.

The business models for products and services, especially in tech, tend to be significantly different. Services are usually priced based on a markup while tech products like software should be value priced. Cash flow for these business models is also often different, with products being sold for an acquisition cost or subscription and services being offered with periodic project milestone-related payments.

Someone who is great a building tech products is not necessarily well-suited to defining services such as consulting. Consulting managers who help define service offerings shouldn't be expected to know how to take products to market without additional professional development.

Software as a service (SaaS) unfortunately overloads the service term. From a product development perspectives, we consider SaaS a delivery model. SaaS products are managed largely the same way other software products are managed.