Building Products As Innovation Experiment Systems Jan Bosch Chalmers University of Technology, Department of Computer Science, Gothenburg, Sweden. Jan@JanBosch.com Abstract. Traditional software development focuses on specifying and freezing requirements early in the, typically yearly, product development lifecycle. The requirements are defined based on product management’s best understanding. The adoption of SaaS and cloud computing has shown a different approach to managing requirements, adding frequent and rigorous experimentation to the development process with the intent of minimizing R&D investment between customer proof points. This offers several benefits including increased customer satisfaction, improved and quantified business goals and the transformation to a continuous rather than waterfall development process. In this paper, we present our learnings from studying software companies applying an innovation experiment system approach to product development. The approach is illustrated with three cases from Intuit, the case study company. Keywords: product development approach, experiment systems, case study. 1. Introduction The Internet has brought many changes and, as a society, we have barely started to exploit the possibilities that it brings. Over the last two decades, developments ranging from online commerce to open-source software to social networks have either been created or accelerated with orders of magnitude. In addition to the changes to products, services and communities, there is also a quite fundamental shift underway in how products and services are developed and deployed. This shift is driven by several fundamental differences between traditional licenses, on-premise software or embedded software and software-as-a-service solutions in a cloud-computing environment. These differences are driven by several factors, including the prevalent business models on the web, the deployment infrastructure, customer expectations, the network connectivity of increasingly many products and the real-time nature of online solutions. The aforementioned factors have lead to the evolution of a new software development model that is different from development approaches for traditional software. First, it is focused on continuously evolving the software by frequently deploying new versions. Second, customers and customer usage data play a central role throughout the development process. Third, development is focused on innovation and testing as many ideas as possible with customers to drive customer satisfaction and, consequently, revenue growth. Stepping back, we can recognize that R&D in this context is best described as an “innovation experiment system” approach where the development organization constantly develops new hypothesis (ideas) and tests these with groups of customers. To be published in the proceedings of the International Conference on Software Business (ICSOB 2012)