Application product development in software industry tends to follow a relatively common life cycle as they grow and mature and that, as they evolve through the process, they encounter a series of points where it becomes necessary to alter the ways in which they organize and manage their business. There is no steady state organization model that fits in all the phases of the life cycle.
             Stage I consists of the bringing the product in to the market and getting adopted at the first one or two clients. In the early stages of product development discovery and innovation are main drivers. Characteristics of people required at this stage are passion, flexibility, all round knowledge, and certain entrepreneurial skills. Customer Intimacy is important; early customers are show case for the product in gaining entry in to the next stages. The direction for the product is not completely fixed. Budgets are small; management is still not completely confirmed with potential of the product. Informal and flat organization structures exist at this stage. People work with compulsion to succeed.
             With the one or two client successes the products makes its announcement in the market. Seeing initial success with the few customers next set of the customers buy the product. Product enters into the Stage II. Product is not mature enough to ignore customer specific requests. Teams still need to focus on customer. Road map for the product gets clearer. Generalization and customization exist in the stage. Internal systems need to support the more number of customers that are coming in. People should be more focused and compartmentalization of the work gets in. Processes get introduced. Hierarchies and organization structures are formed. New teams like support, implementation and product management will come into picture. Identifying partners and empowering the partners becomes important.
             With the critical mass of the customers under it self
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