fbpx
The Stack Archive

Cloud and its impact on the ISV middle-ground

Thu 28 Jul 2016

ISV

David-Grimes-chief-technology-officer-NaviSite.jpgDavid Grimes, CTO at Navisite, explains the challenges and opportunities that cloud has presented for the incumbent ISV community…

Over the past seven years, cloud technologies have exploded onto the scene, transforming not just IT, but businesses globally. You can be the best in your vertical but unless you have a forward-thinking IT strategy, the best isn’t good enough anymore. For the independent software vendor (ISV) community, this philosophy is particularly palpable with technology being a critical business differentiator.

It is both an exciting and scary time for ISVs due to the relative ease for new entrants to burst into the space, and the difficulty for long-time shareholders to reinvent themselves quickly in the face of this competition. Cloud and the transformation it has brought to the industry is undoubtedly creating considerable challenges for incumbent players, and it is up to them how they respond to these developments.

Cloud takes many forms – it has become more of a concept than a concrete manifestation and the interpretations become ever more diverse by the day. Today, cloud brings to mind a broad spectrum of ‘as-a-Service’ capabilities; Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Desktop-as-a-Service (DaaS), etc. The ISV community has been able to benefit from cloud computing principally through IaaS, but also from PaaS and SaaS models – either starting out, or successfully reinventing themselves from traditional ISV to true multi-tenant SaaS player.

The ISV landscape

Looking at the ISV landscape today, there are many well-established organisations which have built and delivered platforms in very traditional ways.  This often involves deployment on-premises, with installation of software on infrastructure in customer-owned data centres, although this approach is increasingly less common. There are also the big SaaS players such as Salesforce.com, Microsoft Office 365 and Oracle.

IaaS has facilitated the move away from traditional, on-premises deployments and per-customer hardware-based solutions.

However, for me, the interesting area is the big group in the middle – typically smaller ISVs operating in specific verticals. These businesses tend to have invested in their application suite for 5-10 (or more!) years, and they are less able to simply reinvent themselves into large multi-tenant SaaS providers.

For this group, IaaS provides an incredible opportunity to sustain their business and provide a runway to kick start their transformation. IaaS has facilitated the move away from traditional, on-premises deployments and per-customer hardware-based solutions.

With the introduction of mobile apps and IoT, we have also seen a rise in much smaller applications and startup players. This is a marketplace in which cloud is really the only viable option from an enablement perspective. In this way, cloud has enabled a new model of application development – it provides an entry point for these smaller companies, with no upfront capital barrier, yet with the ability to scale in the face of success.

Achieving agility

The world is moving towards SaaS based applications, and we will see this evolution continue. Developers can find tremendous benefit in building and providing SaaS services, instead of having to worry about the overhead and time-to-market considerations of traditional software packaging processes. Regardless of industry, business agility has become a crucial currency as customers begin to expect ever more agile environments. Companies can achieve this by building and delivering on an ‘as-a-Service’ basis, updating a central point of delivery in the cloud which is being consumed by all of their clients as opposed to having to package, ship and install software.

software-packagingFor the middle range of the ISV ecosystem, this reinvention is a particularly daunting project. They typically estimate a journey of around 10 years to go from the platform they already have, which has often been in market 20+ years, to a multi-tenant SaaS model. They have a viable model today and could run their existing applications on an IaaS platform, with many of the same economics as SaaS from an infrastructure cost perspective. However compared to moving to a true multi-tenant SaaS model, they still have the management overhead of each instance of their application.

This model can carry them into the foreseeable future, but it comes with an increase in operating overhead. These ISVs need to ask themselves if they can afford to make the investment to move to multi-tenant SaaS or continue the status quo and reap the benefits of IaaS in the interim.

Optimising partnerships

Realising that their competitiveness will eventually lose advantage, the majority of ISVs do want to take the journey and fully reinvent themselves. In order to do that, the choice of provider is critical – they need to optimise their selection of cloud partner. ISVs must look for a provider partner that can manage all of the operation and maintenance, so that they have minimal costs and overhead in running their legacy applications. Outsourcing all of the ‘care and feeding’ duties, including patching, security, anti-virus, can create the necessary opportunity to begin full reinvention.

Adopting higher level services made available by most of the hyper-scale cloud platforms can definitely realise development and operational efficiencies, but can also restrict portability later on.

Cloud platforms, even ones that are infrastructure-centric, vary a considerable amount. There are those which offer very traditional Windows or Linux operating system environments, starting with a ‘vanilla’ server into which you deploy and configure your applications. Then there’s the likes of AWS, Microsoft Azure, Google Compute Engine, or some of the services provided by the VMware-based offerings, which delve further into a Platform-as-a-Service (PaaS) model.

If you’re starting afresh, whether reinventing existing capabilities or as a new entrant into the market, your choice in partner is a critical decision. For example, if you select Azure and you leverage many of its components, such as Big Data services or Analytics engines, you will most likely get a time-to-market advantage, but you’re also somewhat locked in.

Adopting higher level services and abstractions made available by most of the hyper-scale cloud platforms, and integrating with their APIs can definitely realise development and operational efficiencies, but can also restrict portability later on. ISVs therefore need to decide the relative value of time to market, reduction of perceived complexities, and how much control and flexibility they want to retain over their deployment options long term.

Tags:

business Cloud feature software
Send us a correction about this article Send us a news tip