|By Jiten Patil||
|August 9, 2012 05:45 AM EDT||
Today's information technology era is driven by software providers of all shapes and sizes. On the one hand we have big or very big providers who have established themselves through very sophisticated business models and ecosystem channels they have invested in for a long time. Tried and tested business processes enable them to stay ahead of the curve when responding to new customer demands - either through large investments in new innovations or because of the market reach they have established over time.
On the other hand, there are several small and medium independent software vendors (ISV) who are focusing on solving very specific problems or addressing niche segments differently. While these small and medium ISVs have created their own space, they are constantly challenged to keep building newer products or adding new features to stay in the game. Another challenge they face is to maintain their market position with changing tastes and a perpetually evolving genre of customers. Customer ‘stickiness' is never guaranteed and this poses a great threat to an ISV's revenue cycles in spite of good engineering capabilities.
ISVs get categorized into two different segments - each one facing different challenges. The first category is ISVs that are either startups, having nascent products or somewhat old players that are forced to redo their product portfolio significantly to deliver renascent products. The second category is ISVs that are establishing product/s but need to take that extra leap to survive through future disruptive market cycles or product revitalization. The game is on between ISVs with products that are either nascent / renascent or ISVs having products under a revitalization process.
For the first category of ISVs it's prudent for them to acquire or build a new mechanism to bring their nascent or renascent products to market without much delay. This mechanism means - apart from product engineering functions that ISVs invest in, the rest of the product functions are aligned and empowered for a quick go-to-market strategy. For example, it's crucial to pass through the ‘marketing - promotion - sales' cycle very quickly and also jump-start the order-to-cash cycle for quicker revenue realization helping back up incremental product releases.
Several non-engineering aspects directly become part of this type of ISV's critical path for success. A separate challenge in itself, this dependency is very much unavoidable. However, it is not surprising that ISVs that own the burden of pushing new ideas and features to market do not have the necessary technology or expertise to implement non-engineering mechanisms.
These functions are non-core to technology companies and add significant overhead and investments - to position and channel the products in the market correctly and in a timely fashion. This is where a custom cloud strategy can play a hydrant role in not only forming but also delivering fast-paced revenue generation cycle. After all, no matter how great a product or an idea is, they each need an equally nurturing environment to succeed. And this is why an ISV's cloud roadmap needs to be capable of creating a boost - to identify or create the right and conducive environment that a product needs for its success.
These ISVs first need to identify a distinguishable cloud roadmap that deviates from or complements traditional ways of implementing a go-to-market plan. The distinguishable factor here means the capability to add the extra speed, agility and ensuring the quality of the process. Another key aspect of the strategy should be to create the model that provides the direct link between the cost arbitrage benefits to the roadmap.
Besides using cloud services for relationship management, ISVs need to plan to leverage cloud tools to enable an end-to-end revenue-generation process. Cloud provides the avenues to roll out marketing campaigns for lead generation and brand building. ISVs need to invest in gaining the know-how of cloud service options so that they can better put them to use. Using social integration tools and platforms provided by cloud, ISVs can expedite go-to-market further. An important aspect of selecting such platforms is to ensure that these tools can be tailored for a business-specific scenario.
ISVs need to think about how cloud solutions can be used for packaging and distribution. Cloud provides natural tenets to help enable product trials during the sales cycle as well as end-user deployments. Facilitation programs like application exchange, app stores and cloud brokers provide an extended platform and network that can help speed up the revenue-generation cycle.
As businesses scale and more products are added to portfolios, cost and complexity tend to escalate because of the sheer size of the market and the targeted customer base. Before this becomes the bottleneck for revenue-generation cycles, ISVs should employ strategies like continuous delivery of promotional content, new product trial offers and value-added features.
Gone are the days when businesses had to invest in creating a large support infrastructure to remain connected with their customers and increase after-sales happiness quotient. Engaging customers and providing them with the required support services is another non-core cloud use case for ISVs now.
Some of the strategies identified above are better implemented using on-demand models to optimize the ISV budget and speed up revenue cycle. Choosing cloud services will become a natural choice for most ISVs, although rolling out an integrated strategy with disjoining process parameters and heterogeneous tools can pose difficulties in implementing an end-to-end working roadmap. This is where ISVs should look to the cloud-enablement function to guide the product roadmap and bridge the gaps appropriately.
In a nutshell, ISVs can fast track the revenue generation cycle via a well-thought-out cloud strategy for non-core business functions. Define and shoot for smart objectives including:
- Rolling out marketing campaigns, promotions and social integration for products to enable go-to-market in weeks vs. months
- Improving customer and partner experience in real time
- Improving ISV sales without doing non-core technology or expertize investments
- Integrating and delivering on-demand business processes that can help with ordering, measuring, billing, settlements, better customer engagements and managing an end-to-end support life cycle more effectively
For the second category of ISVs that are revitalizing their product portfolio - they may leverage existing investments in non-core business processes as long as it is paying off and not affecting future competitiveness. Some of the above strategies are valid for these ISVs as well. They can pick and choose what suits them well in their current situation. At the same time, a farsighted strategy for them would be to start experimenting with these cloud use cases and start developing means for doing things in a nimbler way.
ISVs ultimately need to plan for continual growth, which is the essence of the business and their survival. To that effect, ISVs need to embrace more contemporary ways. Different ISVs are in different business situations when it comes to implementing new generation technologies that will ensure their competitiveness in the years to come.
Needless to say, making more money is the mantra for businesses. What else can ISVs do?
Check out this next article: Nine Things ISVs Should Do Next
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