Software Product Development vs Product Development

Author Poster

Abhijeet Singh

26 June 2024

The terms software product development and product development are often used interchangeably within the software industry. Although this is common practice in recent times, and the terms can be used interchangeably to some degree, these are distinct processes that must be treated as such. A near-universal substitution of these terms can generate substantial confusion within the industry.

So, how similar are these processes? And what are the differences? Should you even be swapping these terms? This short blog post will clear your confusion once and for all.

Table of Contents

What is a Product?

Product development is best understood from an economic perspective. The Economic Times simply defines a product as the ‘item’ offered for sale [1]. So everything from your groceries to your computers and cars, everything you buy is a product. 

Products are further classified as products (tangible items like jewelry) and services (intangible items like insurance and customer support). For the purposes of this article, it suffices to think of them collectively as ‘products.’ So, a product refers to every item the consumer pays for.

What is Product Development?

Now that the definition of product is clear, it’s super easy to understand product development. Product development is the process of designing, developing, and delivering a product to the market. As such, product development is the core aspect of every business, be it a small-scale manufacturing unit or a multinational corporation.

A business cannot exist without a product (and service). The success/failure of any venture depends extensively on the product. That’s why an extensive product development process has been defined over the years to perfect the product.

Stages of Product Development

Although the idea for your visionary business product might hit you on the drive to work, bringing the idea to fruition follows a disciplined and elaborate process that tries to maximize the chance for success. A typical product development process includes the following stages.

  • 1. Ideation: Ideation involves brainstorming potential ideas for your new product. The goal at this stage is simply to generate as many product ideas as possible. No idea, however silly, could be criticized at this stage. Ideation is best done with an interdisciplinary team to generate a barrage of ideas from different points of view. Techniques like brainstorming, mind-mapping, and focus groups are all effective ways to ideate. When you’ve run out of steam and ideas, you move on to the next stage of product development.
  • 2. Feasibility Analysis: Remember how criticism was a strict no-no in the ideation phase? Well, here’s your chance to break free. Feasibility analysis involves validating the ideas on multiple parameters to eliminate unrealistic ideas. This process analyzes the possibility of realizing a successful product from various perspectives like economy, statutory compliance, returns on investment, market demand, and more. The most promising ideas are shortlisted for the next stage.
  • 3. Conceptualization: Conceptualization involves elaborating and adding more detail to your product ideas. At this stage, a preliminary design of the product is created. Several factors like the technicalities of the product, design, ergonomics, packing, etc are considered. The concept must be accurate enough to depict the final product as closely as possible. Multiple product concepts are routinely created and tested to select the best version possible.
  • 4. Prototyping: Prototyping involves realizing a real-world model of your product to gauge its functionality and make the necessary modifications. Prototyping allows you to get a real feel of the product and collect feedback that can be incorporated to improve the final version. A product may go through multiple iterations of prototyping.
  • 5. Product Development: Once the final prototype has been created and finalized, the product is ready for production. Concerns at this stage include sourcing the raw materials, selecting a suitable manufacturer, and handling supply chain, logistics, and warehousing.
  • 6. Market Deployment: The product is finally taken to the market, where its success or failure depends on the customer demand. Marketing strategies like product placement might still be tweaked at this phase. Any future iterations/updates to the product have to go through the cycles of product development all over again.

What is Software Product Development?

If you understand product development, understanding software product development is a cakewalk. It is the process of designing, developing, and deploying a ‘software product.’ 

When companies create a software product, development is typically outsourced to an IT company. This firm plays the role of a manufacturer that simply receives the specifications and develops the product in line with these specifications.

This process follows a distinct workflow of its own and consists of the following phases.

  • 1. Requirement Gathering: The process begins with capturing the product requirements clearly. An IT firm typically receives these requirements from the client, who has established them through the product development phases of ideation, validation, and conceptualization. An external software developer typically enters the product development phase during the prototyping phase.
  • 2. Design: After collecting requirements from the client, the software developer starts designing a sturdy software architecture. Technologies are decided upon at this stage, and efforts are undertaken to ensure the creation of a durable software product.
  • 3. Implementation: Engineers begin programming the actual product at this phase. This is typically the longest phase of the software development process. Developers must ensure that every product requirement is met.
  • 4. Testing: Testing ensures the implementation conforms to the specifications and user requirements. Depending on the development style followed, testing is either carried out in parallel with development or deferred until the development is complete.
  • 5. Deployment: A thoroughly tested software product is deployed to a live environment where the end users can access it. The client reviews the product and ensures it’s on par with the specifications.
  • Maintenance: Any changes and bug fixes in the deployed product are carried out during the maintenance phase. Any feedback provided by the end users is also incorporated via maintenance updates. These are the stages typically followed during software development. The execution of this process varies significantly across methodologies like Agile, waterfall, and DevOps.

Is Product Development the same as Software Product Development?

The above discussion makes it abundantly clear that software product development is only one of the types of product development. Product development, a broader discipline, is followed to develop any new product across industries like manufacturing, automobiles, services, and more. 

When the same company envisions a software product and undertakes the implementation with in-house resources, the lines are blurred between the processes of product development and software product development. 

In most cases, however, software product development is outsourced. Here, software development becomes a stage within product development and is handled by the software services provider. Understanding these differences is vital to clear communication and collaboration across teams and businesses. Software companies can serve their clients better if they work together with the product development teams of their clients. 

Even companies that handle software development in-house can build better products through close collaboration among product managers, project managers, and developers. A nuanced understanding of these terminologies is thus crucial to success.

At Cloudesign, our cross-functional teams not only work closely with the client, but they also go the extra mile to understand the product and the client’s processes. This approach helps us assist our clients with technology insights best suited to their needs. Work with us for a seamless software product development experience now.


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