This posts focuses on when is the best time of the year to release new versions of your products/services. A technique I have used over the years involves analyzing the number of customers and amounts of revenue that renew each month. This can apply to traditional software maintenance renewals or annual subscriptions for SaaS solutions. Consider the following table:
As the table indicates, the customer and revenue renewals are split fairly evenly throughout the year, except for a bubble in the middle of the year. Often these spikes in customer count and revenues are due to quarter end sales where sales reps are trying to maximize their incentive compensation.
In the case of licensed software products, when annual maintenance bills are due, customers often ask “so what have you done for me lately?” In addition to customer support, customers expect to receive increased value from new releases of your base software package. Ideal release timing varies depending on what stage of the technology adoption life cycle. For products that are in the early stages of the life cycle (innovators, early adopters, and early majority) your focus should be on getting as much functionality pushed out the door as fast as you can. For products in the latter stages of the life cycle (late majority / laggards), the focus shifts from innovation to defect resolution, productivity enhancements and small incremental increases in functionality. Customers value predictability about when releases. Typically products are not released in December and January. Most large shops go into some type of production freeze mode in December and January to deal with the holidays and to minimize disrupting critical year end processing.
So the question becomes when during the other ten months of the year is it best to deliver new releases? In my twenty years of running large product management organizations I generally adopted a strategy of one major release and one minor release each year. New releases require non-trivial amounts of effort on the customer’s part to install, test and deploy. Each release was six months apart, that way a customer was never more than a few months away from receiving a fully tested version of the software that had all of the latest defect resolutions or infrastructure upgrades (O/S, DBMS, TP Monitor, etc.) In terms of timing I generally scheduled the major release to be two months before 70% of the cumulative maintenance dollars (not customer count) were due. In the example above I would target May or June for the major release and November for the minor release.
For SaaS solutions a different approach is warranted. Most SaaS vendors utilize a continuous deployment model where changes are released as soon as they are available after QA. In these circumstances you could have over a dozen deployments in a calendar year, if not more. Most companies will issue release notes with each major deployment to document what has changed. To answer the questions “what have you done for me lately?” companies should adopt a strategy of once a quarter producing a more user/business focused communication that describes in aggregate the changes that have been made and the increased value these changes offer.
Another strategy companies with licensed software products should consider is making all maintenance agreements co-terminus with the end of the calendar year or fiscal year. Under this approach, first year maintenance contracts are prorated to the end of the calendar or fiscal year. For example if the company has a calendar fiscal year and a deal is sold in March, only 8 months of maintenance would be charged with the initial license. The following January a full 12 months of maintenance would be due. This approach does not change revenue recognition; the same amount of maintenance would be recognized as revenue in the first year. The advantage is that the company would receive a big slug of cash in the front end of the fiscal year. For smaller organizations that struggle with cash flow a big slug of maintenance dollars in January can reduce stress and problems.