The Evolution of ISVs: The Journey from Being Digitization Enablers To Going Digital Native

Jun 07, 2022
High-Tech | 5 min READ
With the rapid adoption of Software as a Service (SaaS) and the cloud, we are witnessing a dynamic shift in technology and business paradigms for developers, users, and Independent Software Vendors (ISVs).
Nitin Jindal
Nitin Jindal

Digital Partner

CMT Vertical


During the past few years, the end-users and enterprises of ISVs have been on a digitization journey. To add a few, they adopted various ground-breaking technologies, including the cloud and AI. Every enterprise in every industry is at some maturity level of digital adoption, and to that effect, software products are aligning to these changes. And that's because the evolving business dynamics have forced the ISVs to keep pace with the shifting demands and market their applications quickly. They outsource external capabilities, speed up internal processes, simplify operations, and adopt Platform as a Service (PaaS) to accelerate development processes and clear a channel to improve their sales and collaborations.
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The new generation of application development platforms enables ISVs to address various inherent issues in their products. Furthermore, these platforms help them better manage their costs and overheads and even get more control over their applications that, in effect, create high-performance solutions.
The Inevitability of a Digital Workplace
Offering a great customer experience establishes a company as superior to its competitors. In addition, all leading companies across domains are adopting edge computing, the Internet of Things (IoT), and artificial intelligence (AI), among other modern technologies. These companies can't settle with quick-fix solutions any longer, so ISVs are progressively disrupting the digital transformation space and doing it with the help of the cloud. As a result, there's a high demand for a secure cloud to host scalable applications to boost sales and retention.
Furthermore, ISVs align their products with other vendors, which is essential to avoid compatibility issues and integrations down the line. To support a company's digital transformation, the ISV must be able to easily integrate its solution with the customer's existing ERP software. Again, by facilitating the Bring Your Own Device (trend), ISVs can expedite the transition for an enterprise customer toward a more digital workplace.
What Do ISVs Have To Gain From It?
ISVs traditionally developed products to support a given industry vertical and specific business functions. However, since the early 2010s, social media, mobility, analytics, and cloud (SMAC) began gaining mass acceptance, and businesses started going digital. As a result, software products are now no longer the real decision-makers in the technology domain but serve as a means to deliver and host other value-added services. Being the enablers of this revolution, ISVs have a lot to gain.
 From Enabling Digitalization to Becoming Digital Native
Making The Most Out of Collaboration
Technology is evolving at a breakneck speed today, and this has made it impossible for a single enterprise to deliver all innovations, and that's where ISVs shine. While each ISV brings a unique solution to the table, there are always customers who need an all-in-one package. And so, to develop these end-to-end solutions, ISVs must collaborate with others and make the most of each other's strengths.
All products, B2B products more so, need alliances to develop. Until a few years ago, ISVs took it upon themselves to ensure the product fits and works seamlessly in the customer environment. Still, the situation changes as these responsibilities are now getting outsourced to partners with domain expertise. Collaborating with other ISVs and establishing long-term partnerships can deliver efficient and exemplary user experiences. It will significantly reduce the development time and cost and allow them to harness components of higher quality and meet the regulatory standards.
Digital Work Practices
With the technologies at our disposal, enterprises are delegating straightforward, simple, redundant jobs to AI-based digital tools like bots and virtual assistants. While chatbots have already been normalized in the industry to provide round-the-clock customer support, ISVs that offer such services will be in high demand. That's because these businesses are looking for ISVs that can help them provide their customers with full-time support without human intervention, and hence a full-time staff is going to be in high demand.
Virtual assistants allow businesses to focus on their strategic offerings instead of resolving all the redundant queries by automating the whole process. At the mass-market level, familiar virtual assistants such as Amazon's Alexa and Apple's Siri help normal users achieve simple tasks like scheduling appointments, sending messages, etc.
Increased Team Productivity
As we see ISVs embrace digitization, we can expect the core teams to focus on the more critical aspects of the product. We now have various tools to ensure that secondary tasks such as configurations, bills, payments, customer service, etc. are automatically taken care of.
Reduced Time to Market
ISVs are already known to develop niche products highly with competitive prices. They are highly skilled in all areas, from product conceptualization to product design and UI/UX. This enables them to deploy software products across platforms and add improvements effortlessly. In that sense, ISVs are advantageous as they can adapt to various development models. They can choose the strategy and approach that optimizes their efforts and timelines. With engagement models that focus on long-term outcomes and tools ready to use, ISVs are setting new paradigms for rapid software delivery and product evolution while becoming significantly more profitable.
Developing a solid business model is imperative for any ISV to migrate to a SaaS model. It involves assessing new demands, creating new partnerships and remuneration models, adopting modern technologies, etc. Moreover, with AI and ML driving automation, ISVs are bound to bear fruits from it in the long term, further supporting them in enhancing their software development processes. This will, in turn, improve their customers' digital workplaces and allow them to become more effective in delivering their core products and services.
Based on various factors and market research conducted, the global market size of ISVs is estimated to grow from $1958.6 bn in 2021 to $6648.6 bn by 2031.
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