Creating an effective, dynamic and evolving product management strategy is critical to CDN success. There are, however, significant challenges in developing the perfect product mix. The creation of feature set bundles, costing and pricing features, and crafting a compelling branding strategy around its value proposition are just a few of these challenges. The product management strategy lives and dies with the “Product Management Team.” Vision, technical acumen, and business savvy are requirements to creating the most successful mix of products.
Should the Product Management Team develop an expensive feature that doesn’t resonate with customers, valuable resources are wasted and the company is likely to fall behind its competitors that developed a more appropriate feature. This report outlines a Classification Model that can assist companies in minimizing the risk associated with feature set development.
After all, Product Management is the place where innovation starts, ideas turn into features, and features transform a basic CDN into a high-performance, innovation-driven CDN. Always keep in mind that product management, engineering, marketing and sales must work in-tandem to create the game-changing feature.
The main goal of product management is to create products that sell in order to generate new revenue streams and to increase existing ones. Some innovation driven CDNs, such as MaxCDN, develop features on a quarterly basis while others, like CloudFront, introduce features sporadically. Once a feature is developed, pricing it appropriately is sometimes more challenging. If the feature is priced too low, millions of dollars in potential revenue are lost. If a feature is priced too high, millions of dollars could be lost for lack of sales. For a startup CDN, millions in either direction is akin to a stake in the heart.
If a CDN does create the game-changing feature, it can be almost assured that in two years or less, no matter how innovative the feature is, it will be replicated. Once the challenge of developing a feature is overcome, we have devised a “Feature Set Valuation Classification Model” to aid in appropriately pricing, branding, and selling it.
The Classification Model breaks the feature set into four distinct categories: Basic, Standard, Premium and Innovative. Each category supports a basic pricing structure or range in which it should sell:
CDN Feature Valuation Classification Model
|1. Innovation||WAN as-a-service / B2B Private CDN (Aryaka), WebRTC CDN (PubNub), Cloud-based Film Editing (Aframe)||Creates unique business model|
|2. Premium||WAF, DDoS Mitigation, DSA, ADN, FEO, Encoding, Content Exchange (Aspera) and Bot Protection||$1k/month to multiple thousands/month|
|3. Standard||SSL Certs, Token Auth, Rules Engine, Advanced Reporting, Origin Shield, download manager||$25/mo to $900/mo.|
|4. Basic||Rsync, Instant Purge, two-factor auth, RTMP/HLS/HDS Support, Mobile Redirects, Gzip, sFTP, API Acceleration, Basic Reporting…||Free|
- Innovation: These features are difficult and expensive to develop. Once developed, very few competitors will offer the same product, at least in the short term. These features are the most innovative and unique, which enables companies to develop unique business models to market them.
- Premium: These features are costly to develop and require great engineering effort and a diverse skill set to bring to market. On the bright side, CDNs can sell these features for thousands of dollars per month.
- Standard: These features are much easier to develop than Premium or Innovation driven features. In fact, most CDNs offer these types of products as a bare-minimum, and not to do so would impact a CDNs ability to compete.
- Basic: These features are offered for free to customers and deal more with back-end optimization in caching, storage, streaming, and so on.
Keep in mind that the chart shown above does not include every feature in the market, but a large enough sample size to give product management teams an understanding of the classification. Every CDN should develop a road map to create features across all four categories at any given time. One such strategy would be to focus on developing one Innovative feature, two Premium, three to six Standard, and dozens of Basics.
Possible Feature Set Development Roadmap
- Innovation: Aim for the development of 1
- Premium: Develop 2 for the year
- Standard: Develop 3 – 6 for the year
- Basic: Non-stop development of back-end optimizations
Developing an Innovative Category Feature
How do we go about developing a game-changing feature that could be considered Innovative? There are dozens available in the current market such as Cloud-based SIEM and LogRhythym marrying Akamai. The SIEM feature would detect different types of traffic flows, analyze traffic, build user profiles, perform some basic correlation, and provide automated incident response.
Based on our Classification Model, this feature would enable a CDN to create a new business model. In the worst-case scenario, if the SIEM feature did not become a game changer (Innovation category), it would likely become a Premium feature that could sell for thousands per month. The Classification Model can provide good marketing guidance before the development of the feature takes place. Whether customers use this model or create one in-house, having one is better than having none.