While smart infrastructure decisions are vital to application software companies, the most important aspect of intellectual property (IP) sits in the product capabilities expressed at the application feature and function level. The application layer is most likely where your company will realize its greatest IP value.
Newly formed application software companies typically have one very important job, which is to validate the market with a ‘minimum viable product’(MVP). Behind the scenes, the process to build the MVP is usually driven by a set of market requirements that are almost always closely tied to substantive feedback by different types of potential users. In simpler terms, the product development focus must have a good grasp on what the customer wants and align that to the features within the software solution. As a consequence of the above-stated approach, one can imagine, nearly 90% of important conversations for application product development at an early stage will center around application capability as opposed to application infrastructure.
An overweight focus on the application functional layer is generally a good thing, as your company’s priority should be to get the application features to align with early customer needs and drive adoption. That said, after going to market and maturing beyond the MVP stage, most software teams will need to start paying attention to the infrastructure capability, which generally sits behind the scenes and will touch the areas of: security, scalability, microservices, and integration, just to name a few.
Most startups face the difficult decision of how much and where to invest infrastructure capability. They must choose between building it in-house (organic) and using an (OEM) solution as a deeply embedded option. Let’s take a moment to look at the pros/cons and market value impact of the aforementioned options at a high level.
Building your infrastructure in-house vs OEM
|Infrastructure Options||Pros||Cons||Market Value Conclusions|
|Very specific to the app use cases|
Full IP ownership
|Expensive to hire|
Evolving requirements will require further investment $$$
Longer to go to market
|Medium-IP owned by the firm but not viewed as essential by the customer because it’s behind the scenes. So, bang for the buck is moderate at best and execution risk is high given low expertise|
|OEM (Deeply Embedded)||Fastest to market|
Provides road-tested capability to reduce risk
Quicker to adapt to customer technology shifts quickly
Less expensive to maintain than hiring, building, and growing in-house infrastructure team
|Generally broad capability hammer for a thumbtack|
IP is owned by OEM company
Need to invest in learning and embedding OEM through series of POCs
|High-market value is driven by much faster time to market and less technology risk and debt that might accrue if product landscape shifts|
As you can see from the above chart, embedding your application will give you a much higher market value because you will get your application to market faster. You will also experience less technology risk that might accrue if the product landscape you are working in shifts.
Learn how TIBCO’s deeply embedded OEM solutions can help you get your tech start-up’s infrastructure right and allow you to focus your energy on your applications.