Software-as-a-Service (SaaS) is fast becoming the de facto software usage model that ISVs are turning to. According to an International Data Corporation (IDC) forecast, “worldwide revenue for enterprise applications will grow from $279.6 billion in 2022 to $385.2 billion in 2026 with a five-year compound annual growth rate (CAGR) of 8.0%. Nearly all this growth will come from investments in public cloud software, which is expected to represent nearly two thirds of all enterprise applications revenue in 2026.”
SaaS and cloud-based, modular, and intelligent applications are no longer 'nice to have' but are instead essential for business. Organizations that want to stay in business need AI-driven software that is cloud enabled, modular, and intelligent.”
source: https://www.idc.com/getdoc.jsp?containerId=prUS50029423
It is clear that the SaaS model presents terrific growth opportunities for independent software vendors (ISVs).
And the benefits go beyond gaining and reaching new customers: SaaS brings agility, increases the rate of innovation, improves overall operational efficiency and boosts market competitiveness. Transforming successfully to SaaS requires the ISV to first consider all business and technical challenges before embarking on the modernization journey. It’s important for ISVs to develop a clear business strategy to help achieve the benefits they want to see.
This starts with first developing a vision for what SaaS will bring, making sure all assumptions are validated by gathering supportive data – it’s important not to start with a skewed or misinformed vision so that ISVs can be assured that their desired goals will be achieved. To inform this strategy, ISVs should ask themselves questions at the beginning of their SaaS journey, such as how they will fulfil customer needs using the SaaS model, what they will need to do to support growth and which skillsets they have and need to support modernization. It’s equally important to identify any skills or knowledge gaps in operations, sales, marketing and customer support to minimize modernization roadblocks.Knowing who your target customers will be and how you will onboard and monetize them is a key part of the ISV’s product strategy. This strategy can be much better informed by using the existing customer base as a research resource. This process can help uncover if any new planned features are something customers would actually want or need. After this research stage, building a minimal viable product (MVP) is a great way to measure early user feedback. Getting an understanding of whether the eventual finished SaaS product will meet target customer needs and expectations allows for necessary product iterations and means the product should be in good shape ahead of launching it to a mass market audience.
SoftwareOne developed its NextGen ISV Program to help ISVs successfully transition to SaaS. We are able to not only count on the expertise of more than 3,500 cloud experts within our business, but also to use our long-held partnerships with all the hyperscalers.
The program begins with art-of-the-possible planning to define what the ISV’s future SaaS state will look like, supported by product and execution roadmaps. We then build the business case and technical validation. Our approach to application modernization is in three phases: advise, build and manage, which focus on in the following way:
in this phase we uncover all the necessary business and technical information to discover, assess and align an ISV’s application portfolio for modernisation. Out of this process comes a strategic, detailed roadmap that outlines all the necessary steps of the SaaS journey.
SoftwareOne works closely with the ISV to rehost, replatform and refactor its target applications to deliver a modernized application using proven cloud frameworks.
in the final phase, the ISV team works on enhancing its applications so that they operate successfully in the cloud. After this is complete, the ISV is ready to build in new application capabilities.
As part of the NextGen ISV Program, SoftwareOne applies a cloud financial management (FinOps) framework to enable ISVs to manage, track, control and predict cloud spending to deliver measurable business improvements.
It is also vital that the ISV build in good backup policies and have strong security measures in place under the cloud shared responsibility model. Our Cloud Managed Services can help free ISVs of time-consuming tasks such as identifying and patching vulnerabilities or protecting against ransomware or distributed denial of service (DDoS) attacks. With an optimized cloud environment, ISVs can focus even more on innovation.
Once all the stages of modernization are complete, the ISV must not stop there. It’s not possible to build something and expect everyone to come. Awareness needs to be generated for the new SaaS product. We work with ISVs to develop and execute go-to-market strategies to create that awareness and gain new customers. We also help ISVs to take advantage of available hyperscaler funding mechanisms and benefit from co-marketing and co-selling opportunities, such as making their product available in a hyperscaler marketplace.
Our aim is to support the ISV at every step of the way, pre- and post-modernization, to ensure the smoothest transition possible. The journey to SaaS presents lots of opportunities to grow at scale and deliver what customers really need and stay ahead of the competition – with this in mind, we truly believe that transforming into an agile, cloud-based business should be the goal of all ISVs.
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