In the context of the computing world, when we talk about products, we are specifically talking about software products. In marketing, a product is anything that can be offered to a market that satisfies a want or need. It can be tangible or intangible. Tangible is something that can be touched whereas intangible is something that cannot be touched such as a piece of software or insurance policy. Computer software is a component of the whole computer system that consists of data or computer instructions.
Software and products are different. The product is a higher order thing and software is a component order thing. A software may be a component of a product. A product has much more attributes that it must be concerned with besides the quality and design of the software that goes into it. The software works well in a software engineering laboratory where all the features and environmental factors are controlled. A product, however, goes out into the real world and deals with unexpected situations and challenges.
Any engineer that tells you that “proper software design takes all those things into account” is thinking inside a box. The truth of the matter is end-users will use the product in ways that the software was never intended to be used. You can have the most pristine software design and it still won’t tell you how an end-user will use it. Google is one of the few products that actually takes how the end-user will use the product into account. Google’s attention to simplicity makes for a very intuitive interface. The more options a user is presented with, the less intuitive a product becomes. We can take an example of a game. All game developers like the concept of beta development. The game undergoes various iteration of beta releases in collaboration with end users. The end user gives feedback and based on that developers change certain components of the game to make it better. After iterations, a final version is released which is officially released as the ‘final product’. A product henceforth is made for all or multiple clients. A software may not necessarily take every aspect or factor into account but a product tries its best to deliver the finest software.
A software can be used as a service and as a product. Software as a service or Saas delivers applications over the Internet and charges a regular fee for it. A SaaS is a web-based software that is hosted exclusively by the provider, as opposed to being downloaded upon purchase and subsequently hosted by the client. The provider, in turn, furnishes the client with access to the application in accordance with agreed-upon security, availability, and performance standards. As such, SaaS applications run exclusively on the provider’s servers. All a client needs in order to access the software is an Internet connection. Software as a Product, on the other hand, requires you to purchase a license to use a solution that you will then have to host yourself. An example of this would be Microsoft Office 2011. SaaP solutions are an expensive one-time purchase, with no monthly usage fees but extensive maintenance and update costs. Generally one doesn’t need an internet connection for SaaP. However, whenever a software update is released, users have to purchase it at an additional cost which is usually less than the original price of the software. In SaaS, the burden of making sure that services remain operational and at peak performance levels lies squarely on the vendor. A SaaP will give you the tools the companies feel you need to manage your solution on the purchase, but no technical support, access to future updates, or a guarantee that your software is future-proof.
We need to accept that there is a thin line of distinction between software and a product. A product as something (tangible or intangible) that is created through a process and that provides benefits to a market. By this, a chair is a product, a digital product (MS Office, Ebooks, Streaming videos.) can also be counted as one. Each of these is created through a process or, more generally, one or more activities. Someone milled and assembled the chair. Microsoft Office was designed, coded and tested. The process that creates a product does not need to be formal or defined. The creators may not even be aware of the process. But some form of activity goes into creating every product. Anything within that company that can be thought of as delivering value to a market is a product. Anything within a company that can be thought of as delivering value to a market is a product.
Software, on the other hand, may or may not be beneficial to the market per se. The difference between software and product can vary if looked from different perspectives.