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Four Ways ISVs Can Jumpstart Growth    

Written By: YiLun Miao, Managing Director, Asia Pacific at CloudBlue    


As demand for artificial intelligence (AI) tools and other software applications continues to grow, the global independent software vendor (ISV) market is booming. It is expected to increase at an average annual rate of 14% from 2022 to 2027. Small and medium-sized ISVs are striving to grab a piece of this market by branching out into the digital marketplace, but they are playing catch-up.

Here are four key routes for growth as small and medium-sized ISVs navigate their digital transformation journey.

1.  How to Operate in the Digital Marketplace

Over the past few years, B2B digital marketplaces have become the fastest-growing eCommerce sales channel. Digital marketplaces can introduce you to new trading partners, as well as provide a strong channel for marketing and selling products and services.

As an ISV, you can set up your own digital marketplace and offer your customers more products and services from other companies. In turn, you can sell your services through third-party marketplaces, giving you access to an expanded customer base. A bank, for instance, can provide its customers with software products in addition to its core services.

ISVs are often dependent on the volume of products or software solutions sold. Building a digital marketplace offers more opportunities to increase sales and can also help you reach international sellers, buyers, and partners. With the global software as a service (SaaS) market estimated to be worth nearly USD $200 billion dollars, there is room for the small and medium-sized players to use a marketplace to make their mark on the global stage.

2.  Automation Is Key

As your business grows, so will the complexities of your operations. Eliminating manual processes helps you scale faster.

Traditionally, tech firms on a growth spurt will undertake a hiring spree by adding developers, salespeople or commercial experts. But that can be difficult in a market where tech skills are in high demand and wages increasing. For example, the average real salary is predicted to increase this year by 1.3% in Asia Pacific alone.

Even if there is room in the budget to hire and integrate new services or vendors yourself, it takes time both in terms of technical integration and establishing commercial arrangements. Developing and maintaining a marketplace requires significant engineering, design and operational resources. This would mean less resources available to focus on your core business. You can help accelerate your time to revenue by automating the management of subscriptions, catalogs, order fulfillment, and billing across multiple channels.

As you expand into international markets, many complex tasks pertaining to legal requirements and guidelines of other countries can be automated. Another benefit of automation is that it provides real-time insights into your customers’ projects and services.

3.  Consumption on Demand

There are opportunities for small- and medium-sized ISVs to find their niche at a competitive price. You can tailor your solutions to the specific needs of your clients.

In the subscription economy, you can generate a recurring source of revenue with digital marketplaces. Switching your focus from replicating one-time sales to perpetual billing provides you with a more predictable way to manage revenue. In fact, a consumption-based model allows you to record baseline consumption, add users and grow over time.

Subscriptions also give you more opportunities to cultivate and enhance ongoing customer relationships. You can create a more elastic relationship with how you deliver results to your customers, enhancing the overall customer experience.

4.  Expanding into the Digital Ecosystem

Digital ecosystems offer combined value, enabling you to offer customers more services from other companies, while you sell your products in another company’s digital marketplace. Your customers can benefit as well because they can order what they want when they want it with just a few clicks from a one-stop shop.

A cloud monetisation platform can help you find the right fit and enable your digital transformation. For example, Rubiscape is a low-code platform with a robust collection of libraries and connectors to help make advanced technologies like artificial intelligence accessible. It offers its products and services on hyperscale marketplaces globally, expanding its reach to new markets and providing a more intuitive experience for customers.

Partnering with a global hyperscaler introduces you to digital marketplaces with off-the-shelf cloud infrastructures that you can use to help scale into new markets. This not only positions you to grow a recurring revenue stream, but also enables you to broaden your product catalog.

This type of partnership can be mutually beneficial. For the ISV, connecting to hyperscalers offers extensive domain expertise and an instant global reach to create a competitive advantage. For the hyperscaler, it offers their clients more variety. Amazon Web Services, for instance, seeks out partnerships with ISVs.

Navigating the Complexities

As a growing ISV, you can develop unique solutions that the bigger players do not offer, and complete numerous stand-alone tasks. You can provide unique and innovative software applications that cater to a wide range of needs. Financial institutions, for example, can use advanced analytics provided by an ISV to detect fraud and reduce risks. Retailers can use software applications to track trends and manage inventory.

It is important to pick the route for growth that best matches your needs and ambitions. From there, it is a matter of determining how to manage that growth. You can lean on a cloud monetization platform to position yourself where you need to be in a digital ecosystem—connected to an online community of vendors, distributors and resellers that serve your target audience and introduce you to potential new customers.

Innovation and collaboration are key drivers of success, and there are opportunities to capture market share by offering niche and tailored solutions. Many small- and medium-sized ISVs are focusing on creating a digital marketplace with end-to-end automation, and then reaching the final frontier of digital ecosystems. It is a journey and being able to reach a wider audience is the first step.