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ISV Cloud Computing Onboarding: A New Business Environment

Economically scalable business ecosystem for all stakeholders

ISV Pavillion at Cloud Expo

In the recent past, ISVs and SaaS vendors were increasingly evaluating the impact of cloud computing trends on their business.

Cloud strategy has an all-round impact on ISVs, their customers and system integrators.

From an ISV's perspective, cloud strategy acts as a revenue and customer-growth engine, facilitating penetration to wider customer segments and geographies.

From a consumer's perspective - retail or enterprise - cloud promises cost-effective solutions.

From the system integrator's perspective, cloud generates multiple opportunities around solutions and services that enable and accelerate ISVs Cloud Onboarding.


Figure 1: Business Imperatives of ISV Cloud Onboarding

ISVs Cloud Onboarding can create a new, sustainable and economically scalable business environment for all stakeholders. This article talks about the trends around ISVs Cloud On-boarding, the business strategies for success, and a technology roadmap from the perspectives of economics, innovation and growth.

Important Industry/Sector Trends
As per the leading analysts, cloud is a big disruptive change for ISVs and outsourcing providers, as customers prefer out-of-the-box IT solutions. For example, some of the large ISVs are leading this change and driving industry trends for Microsoft, SalesForce.com etc; they also report growth from cloud-based services. However, many of the ISVs are still catching-up, some-of-them in a more strategic way and some of them in a more tactical way forced by the industry. Small and new ISV players stand to gain in a big way because of the low initial investment requirement for providing new software solutions.

Analysts are indicating a significant shift in the outsourcing models. As per Forrester, by 2015 20% of business apps would be available in a Software-as-a-Service model. Another related prediction from IBM regarding cloud adoptability by ISVs shows 4% to 28% growth over the next 12 months. Some of the large software solutions such as Microsoft Exchange and SalesForce.com are already available online and drives huge revenues for the vendors.

The cloud computing wave is impacting the different industry segments in a phased manner, which demonstrates the feasibility and longevity of the technology. Initially perceived as an infrastructure evolution, the cloud computing infrastructure-as-a-service wave had a significant impact on hosting providers, so much so that anyone who is not aligned with this trend may go out of business very soon. Similarly, the ISVs are the next players that will be hit by the cloud computing platform-as-a-service and software-as-a-service waves. Of course, the system integrators are next in terms of changes in the outsourcing models, largely driven by development and maintenance solutions and services to managed solutions and services-based outsourcing; the recent leading analyst firm reports that 8% of the outsourcing models will run on SaaS-based models in next year.

Shifting Gears: ISV Cloud On-boarding Roadmap
ISVs are shifting gears; the drivers are many and the recent economic slowdown only fueled growth and optimization pressures for ISVs as IT departments figure among the top favorites for cost-reduction measures. The recent technology innovation trend - cloud computing - brings value in terms of cost efficiency and business agility. Small and new ISV ventures see cloud computing as a big opportunity to experiment and launch products without a high initial investment. Several large ISVs have already started seeking partners to formulate the business strategies, technology strategies, and GTM strategies to align and adopt cloud computing trends.


Figure 2: Major Industry Trends in the ISV Sector

The large ISVs are changing business strategies and business models - expanding the offerings from large enterprise customers to SMB and retail customers to drive growth, increase market penetration, and offer competitive and cost-effective IT solutions out-of-the-box (managed). They are considering cloud and SaaS technology strategies in realizing these business goals and analyzing the impact on the existing product and service lines to size the cloud adoption effort. They are also looking for innovative platform accelerators that can help reduce the time-to-market for cloud / SaaS on-boarding. As a strategic measure, ISVs are seeking technology partners to share the risk of cloud adoption - it is a somewhat new venture for many of them from both the business and technology perspective. The latest business trends around the ISV sector is to seek accelerated innovation in product engineering through trusted partnerships, alliances and joint go-to-market solutions with large system integrators.

Conclusion
ISV Onboarding on Cloud unlocks the value of the new business ecosystem and offers an economically scalable environment for all the stakeholders - customers, ISVs and system integrators. ISVs achieve growth, customers get more cost-effective solution options, and system integrators find new revenue channels.

The economy, customers, and technology are driving the change; the hosting providers, ISVs and outsourcing providers have to shift the gears to survive and grow.

More Stories By Bhavin Raichura

Bhavin Jayantilal Raichura is Principal Technology Architect, Manufacturing, at Infosys Limited. He has 15+ years of experience in the IT industry; He works with Infosys clients for technology-consulting, solution-advisory and execution of large transformation programs. He has led conceptualization-to-commercialization cycles of multiple products & platforms, technology-practices and technology center-of-excellence at Infosys. He has rich experience in making technology more relevant to business and driving the business of technology. He can be reached at [email protected]

More Stories By Ashutosh Agarwal

Ashutosh Agarwal, an alumnus of IIT Roorkee, is a certified PMP and associated with Infosys Technologies Ltd. He has around 12 years of IT experience. He closely works with manufacturing clients in the definition, conceptualization and implementation of technology that is focused business solutions aligned with the latest business and technology trends. He has published and presented papers in various forums.

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