By Elliot Curtis, Senior Director, Mass Market Hosting Sector, Parallels
The world of the Independent Software Vendor (ISV) has changed radically over the last few years and continues to evolve as the Cloud becomes more and more pervasive for businesses of all sizes. Here, I take a look at just a few trends that ISVs face and the implications for their business.
Everyone is becoming an ISV: With advances in development tools and IaaS/PaaS, the barriers to building and delivering a business oriented SaaS application are very low. Consequently, IT services companies of all types (VARs, SIs, Hosters, Web Designers, etc.) find it easy to move into adjacent ISV categories. It is a relatively reliable way of generating new reoccurring revenue from an existing customer base and increases customer stickiness. As a result, traditional SaaS ISVs are facing an increasingly crowded market with many competitors who have a built-in customer base. Having a clear understanding of routes-to-market and channel strategy has become increasingly critical for application success, and ISVs should be prepared to develop strategic relationships that help reduce the burden of getting in front of potential customers.
Enterprise problems are becoming SMB problems and even Consumer problems: Starting in the middle of the last decade a lot of money was spent by Enterprise IT on trying to solve hard problems around the applications they supported for their business clients. How can data get shared across multiple applications? How do users avoid multiple application authentications and credentials? How do users quickly find the application they need? SMBs typically avoided tackling these issues because they either had pretty simple application requirements or they could afford to ignore the problem. But, because of the Cloud, what used to be limited to the realm of Enterprise IT has started to become everyone’s problem. SMBs (and I’ll throw consumers in too) increasingly have access to a huge variety of applications that would have been unthinkable even five years ago, and while their tolerance for multiple log-ins, siloed solutions, and difficult application discovery is pretty high, it is shrinking fast. For applications to become more SMB friendly, ISVs need to think about: single sign-on support for the customer, applications being aware of other applications so that data is shared, and application discoverability based on user requirements. These are not problems ISVs can solve in isolation and are also issues shared by Cloud Marketplace providers, who are increasingly the face to the customer. The ecosystem needs to have standardized models and approaches that offer open participation and a scalable approach.
Cross application & platform support: Again, this used to be an Enterprise only challenge that was solved by a centralized support organization that understood the infrastructure and the applications running on that infrastructure within the confines of Enterprise IT. With the proliferation of SaaS applications, marketplaces and aggregator/brokers, all of whom have a part to play in delivering the service to the customer, how does the SMB customer get effective and rapid resolution to their problem? Consider the complexity: a customer may purchase a suite of SaaS apps from a Service Provider or Marketplace that is using a Service Delivery Platform from yet another software vendor and meanwhile each SaaS ISV is running their own application in a datacenter somewhere. Questions such as; “Who owns Tier 1 support & how do incidents get escalated?” are just scratching the surface of business rules. Operationally, there may be as many as five or six different support systems that all need to talk to each other with a taxonomy everyone involved understands. If effective technical and business solutions are not implemented up-front, support will quickly become a huge expense and a customer satisfaction nightmare.
As SaaS ISVs think through their go-to-market strategies and execution plans, these are three critical areas that have implications for future growth and sustainability. A key to success is to explore emerging standards such as APS 2.0 and Cloud companies that are working to help overcome these challenges.