The rise of Software as a Service (SaaS), and the Cloud in recent years have brought significant changes in technology and business processes for service providers, developers and users – but also, significantly, for Independent Software Vendors (ISVs).
Transforming an existing on-premise application into a reliable, scalable piece of software is not a small thing. The business changes, however, are harder. In essence, the delivery method has changed, and therefore the business model of selling SaaS and Cloud services needs to change as well.
There is a shift happening throughout the software industry, delivering rapid technological changes, with new innovations and capabilities coming in all the time. And the introduction of the Cloud combined with reduced budgets, means that long term licenses aren’t attractive to most customers any more.
As a result, one of the key changes we’re seeing is a shift away from traditional licensing models to a more consistent revenue stream.
One of the biggest drivers of this shift is the change in SaaS pricing models. With no big contracts to sign or to renew, the SaaS business model is focused on continuously driving new business and increasing the volume of the business.
ISVs now not only deliver the technological base to assist with business transitions, but also provide consultancy and support on changing the underlying business too.
It seems clear that ISVs should be looking to partner with someone who can provide all of the benefits of multi-tenancy, scalability, security, data encryption and so on, to allow them to deliver the best and most secure and reliable cloud based applications possible. The best available partners will provide all of this as well as work with them as a business to shape the new strategy.
In closing, getting the business model right is crucial to the successful migration to a SaaS model, but there are clearly many factors to consider. As such the right partner is key to successfully navigating the transition, not just of the software delivery, but the business model too.
This will help ISVs to meet the changing demands of their customers, while still expanding their potential customer base and having the peace-of-mind that quality is assured, alongside scalability.
Colleen Smith is Vice President, Customer Advocacy at Progress. In this role, she is responsible for ensuring customer focus and accountability for improving the company’s relationship with its customers and partners, as it relates to the use of Progress core products. Smith joined the company in 2005 with 20 years of enterprise software marketing, sales and product strategy experience, and has helped transform software companies into industry leaders, built strategic partnerships, designed acquisition strategies and moved companies through aggressive growth stages.
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