Today I was driving and my eye fell on a brochure I had in the car. The brochure comes from a metal retailer and the slogan on it claims "Our product is Metal. Our business is Service".
I immediately started thinking about this and I had an "Eureka!" moment. I realized that this short phrase captures exactly a key concept in the Web 2.0 sense applied to Software. I already had this concept in mind (summarized in my post "Software: service or product?"), but finding a summary of my thoughts on that one line was very revealing.
You produce Software but what you need to sell is a Service! The real value for your customers comes from the service that is generated around the product and not necessarily from the product by itself.
That is because products are generally static in nature. Like a piece of metal in a traditional old-fashion market. Each sale is a one-time deal. Software can be extremely dynamic and you can build a lot of value providing services around it.
This concept is especially important when the software that you sell is very adaptable and can make your customers money when they invest their time and creativity in it. These kind of customers depend on your product and on you to maximize their productivity and their revenue. For this reason the quality and nature of the service you provide should be a key point in your message and in your investment in a Software business.