For every ISV, commoditization of their product is a reality, sooner or later.  Innovation, bundling and segmentation would be three probable ways to differentiate your product in a commoditized market.

Differentiation can be around availability, performance, delivery model, pricing models and a few more, considering that you are in a commoditized space. It is all left to the imagination of the marketer on how your offering is packaged.  Most likely, it is the messaging that spells out the differentiation and delays the commoditization of your product.

For instance, when Bajaj moved from lightweight scooter market towards commoditized motorcycle market, their messaging was about B-to-B. This B-to-B is about bikes-to-babes, bikes that get you babes. Their messaging was about making a lifestyle statement and this definitely differentiated their product from the commoditized market.

As peter drucker says, for if we dont differentiate, “In a commodity market, you can only be as good as your dumbest competitor”.