Imagine you are working for a small software company. You have a nice product, a loyal customer base and a steady income. However things start to change. Your application and technology is coming into age as does your customer base. You looks reliable but old fashioned and a bit boring, young customers go elsewhere; they want mobility, ease access, community support, flashy design, ease of use - you name it. What will you do?
Coming out with a fully new, superb product is probably is not as good idea as it seems to be. It is not only expensive but you will face other difficulties. There is the migration problem; you may found difficult to migrate all your customer base to the new product, and there is a danger of loosing customers or ending in supporting tow competing product. You may have difficulty with your own workforce, they may find more productive to support and sell the old product ( for more information see: "The Innovators dilemma" by Clayton M. Christensen). You can succeed, but there is a risk of failure and high costs. Eventually you have to fight with the culture of your own company and its ecosystem.
Maybe there is an other way. What if you set up a collection of useful tools around your product? Tools which don't compete with it rather extend it? There are so many opportunities! E.g. you can add a cloud solution which allows to access your favorite documents, latest project, most important data... (depending on the type of application you have) seamlessly on any kind of device with a browser or a simple mobile app. The cloud solution allows you add work group functionality, social networking and electronic services (e.g. banking, invoicing, messaging) all around your basic app. Other options are an alternative, revolutionary GUI for you old app, interface for third party software, ERP integration, a virtual marketplace for artifacts produced with your software... and so on.
If you do well the tools will give you not only extra revenue stream but new markets and successful new products too. Think twice to give these tools away for free. They maybe cheap but they must have value for your customers (or partners, advertisers...). That is why they should have a price (even if a very low one) from the beginning.
For me it seems that it's exactly the strategy Apple has done after 1997. However they think different.
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