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7 Strategic Considerations for ISV Cloud Strategy

Cloud

As more and more organizations become familiar with the cloud, they are moving towards buying software as a services (SaaS) based on actual usage. In fact, it is predicted that SaaS will become the dominant software consumption model by 2018. According to Gartner, as this occurs the steep decline in maintenance fees will translate into a total revenue loss of up to 40% for Independent Software Vendors (ISVs). This means that ISV’s priorities are shifting, leading to changes in their current operating models.

Having been in the software industry for many years, I have seen first-hand what it means to transform from a traditional license and maintenance fee model to a subscription based SaaS. Through numerous discussions with ISVs with regard to transforming their business, what I’ve found is that while there is no single right approach, there a few common themes that always arise. What follow are 7 strategic considerations to keep in mind.

1. Should I build my own cloud?

Building your own cloud means that you have to invest substantially in infrastructure and in developing new capabilities. If your business has the scale to build a cloud in a cost-efficient way, including access to the technology, budgets, and the skilled resources to maintain the infrastructure, it can definitely be an opportunity. However, if you lack the scale of a larger enterprise, building a cloud solution probably won’t provide a competitive advantage, so it’s worth outsourcing to a partner who can meet your current needs and scale with you as you grow.  Read the rest of this entry »

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