Cloud Infrastructure crucial to ISVs
Over the past 10 years, the software industry of today without Software as a Service (SaaS) has become inconceivable In terms of growth, the cloud is a major enabler. Hardly surprising given that unlike the traditional “on-premise” model of developing and supplying software, the advantages SaaS offers independent Software Vendors (ISVs) seem endless.
According to IDC, SaaS services will account for over 60% of 2022’s total cloud turnover, as the driving force behind cloud growth. Almost half of SaaS turnover consists of infrastructure (IaaS) and platform (PaaS) services used by ISVs in developing, constructing and distributing their solutions. The speed, scalability and flexibility the cloud offers, as well as the underlying technology such as virtualisation and containers, have a significant impact throughout the software development process.
Vision on migrations
A McKinsey dossier from 2018, and still relevant today, described the process of transferring applications to the cloud in depth. The transformation and transition process an ISV must follow is by no means a simple “lift & shift”. This requires the software developer to have a clear understanding of topics such as traditional C/S software migrations, DevOps, Security and radical automation, to name but a few.
The ISV business model has also undergone change, with the SaaS model having had considerable impact on the application-software purchasing process. Whereas the “line-of-business executive” was once an influencer, he or she is now the “economic buyer”. This presents new opportunities and possibilities for ISVs, although requiring a different business model in which sales and marketing feature prominently. The “old days” of major software sales deals are now a thing of the past. The current subscription model obliges ISV to review its financial organisation. Companies are furthermore becoming much more demanding: seeking out an excellent user experience and extensive functionality. New functionality has to be available immediately, putting the ISV under pressure to properly streamline the development and release process as a whole.
Cloud infrastructure as an integral part of SaaS applications
These are the developments in the software industry making the difference between ISVs fully embracing the SaaS model and those still hobbling along painfully obvious. A difference discernible not just in growth and turnover, but also in KPIs, such as churn. All this makes implementing the SaaS model for ISVs both relevant as well as urgent. From C/S migration and on-premise implementation, to the cloud-native development of new applications.
The core of the ISV’s operational process is paramount: developing and delivering the functionality its customers demand. Technology and infrastructure are subservient. And there’s a catch; in the “as-a-service” model, the infrastructure has become an integral part of the solution influencing both the ISV operational process and its business model. This means their service has to incorporate cloud infrastructure, cloud security and cloud cost models in order to develop and offer this optimally. And preferably today, rather than tomorrow.
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