OK, so you’re an ISV (Independent Software Vendor) looking for ways to gain more control of the sell cycle. You want to grow your wallet share with your customers and be viewed as a true solution provider and not simply a software vendor.
If this resonates with you, please read on. I have worked with ISVs for over a decade and can share with you some success stories that hit on these points.
It’s really all about delighting the customer and increasing customer loyalty.
In our experience in working with ISVs in a variety of industries, we have discovered some common denominators:
- ISVs often experience “friction” (which translates to delay) in the selling cycle due to the customer needing to obtain or validate the hardware (server and/or data storage) infrastructure
- ISVs sometimes (and any time is not good) experience issues with deployment due to the hardware not being right or not optimally “tuned” for their application
- Many ISVs have insufficient in-house skills to optimize hardware or stand up customer infrastructure
- ISVs typically want to off-load hardware related infrastructure work and focus on their core business (application software)
- Many ISVs have competitors who offer a complete solution (their software + hardware in an integrated appliance or bundle) and therefore feel they are at a competitive disadvantage
- Leading ISVs typically see value in offering an integrated appliance solution as long as they don’t have to do the hardware infrastructure work
These factors are driving many ISVs to consider being the provider of a complete solution which includes the hardware which runs their application. This does not mean the ISV has to be a hardware expert and get involved in the associated work – in fact, the opposite. There is a way to offload the hardware infrastructure provision and work but still offer it up to the customer as a “one stop shop.”
The Total Solution Approach
So what does a “complete solution” – or integrated appliance – look like? An integrated appliance solution provides businesses an all-in-one software and hardware solution. It can be positioned as an appliance or a bundle or simply a turnkey solution. It reflects a technology infrastructure solution that is fully integrated. It includes the server(s), operating system, middleware (if applicable), other relevant components, and of course the ISV’s application software (which can either be pre-loaded on the hardware or installed later).
I previously wrote on this topic to introduce the concept and explain why integrated appliance solutions are a good match for software vendors. Today the case is even stronger.
Business Benefits Driving Market Trends
Industry analysts have been reporting in recent years about the rise in adoption of integrated appliances. In a 2012 report, IDC said the software appliance market is forecasted to grow to $3.7 billion by 2014 and attributes this fast growth to the fact that software appliances reduce acquisition costs and increase operational efficiencies thanks to easy application integration and simplified management.
So what are the specific benefits? ISVs who have included an integrated appliance approach to selling and deploying solutions have realized a number of significant advantages:
Benefits of an integrated appliance solution:
- Shortens the sales cycle
- Expands the ISV’s offering
- Decreases deployment time and risk
- Enables the ISV to off-load resources and supply chain management
- Increases revenue and margin opportunity
- Enhances image as a true solution provider
- Increases customer satisfaction
- Improves account control and strengthens customer relationships
Shorter, more predictable selling cycles and reduced deployment timeframes translate to less hiccups, more focus on what ISVs do best, and ultimately, faster time to license revenue, greater profits, and a happier customer.
Delighting the Customer
But why are customers happier? What do they specifically gain from an ISV who has the capability to provide an integrated appliance solution? From the customer’s perspective…
- Integrated appliances are easier to install, run, and manage than the typical mix-and-match software and hardware solutions
- Ease of doing business with the ISV – having standard, repeatable hardware configurations simplifies the buying process
- “One throat to choke” (better said, “one back to pat”!) – single purchase order, single invoice
- A consistent experience: finely tuned, higher quality end product = happier customer
These benefits are even more pronounced when the integrated appliance systems are built on industry leading platforms such as IBM’s x86 server hardware. With the increased performance and proliferation of x86-based hardware, many appliances are being built on this type of platform. This creates a standard programming environment for software programmers, which lowers acquisition costs, streamlines development, and simplifies support. Having a “standard” hardware platform creates a more stable environment to run mission-critical applications.
Enablement Made Easy
Speaking of IBM. They have a really cool program called the Industry Solution Reseller (ISR) program. It is designed specifically for an ISV to team up with a technology infrastructure solution integrator (who focuses on the hardware work and application integration) and deliver a total solution to customers in a very effective manner … one that delivers solution assurance, value-added capabilities, and a higher rate of customer satisfaction. The program offers other unique features, such as:
- No volume commitments to join the program
- The ISV’s channel is automatically included
- The ability to export the IBM product to serve customers on a worldwide basis
- The ability to do a custom logo on selected systems (e.g. ISV branding)
- The program is flexible and may accommodate both “sell through” and “sell with” go-to-market approaches
Datatrend helped pilot the program for IBM, and I’d be happy to share more information (please post your comments and questions below).
Real-Life Examples
Two ISVs who have made the plunge and are realizing the benefits of selling integrated appliance solutions are Masstech and Bytemobile (now part of Citrix). Both have signed up with Datatrend in the IBM ISR program. Click the links to read the solution briefs and learn more.
The Bottom Line
The value proposition is simple: an integrated appliance is a purpose-built collection of components that are pre-integrated to minimize time and resources required for deployment and administration, and speed time to value. It’s a new and better way to get an ISV’s products to market – and to new customers – so they can build not only a larger customer base but also a larger market.
Simply put, selling integrated appliances saves time and money, and it provides ISVs extra margin opportunity – they maintain their software margin, increase their services margin, and add hardware margin.
So if you’re an ISV, chances are you’d rather focus on what you do best (developing best-of-breed application software) and partner with a solution integrator who can take care of the hardware and application integration aspects … yet position yourself as the solution provider who can bring it all together for your customer’s benefit.
It’s easy to see why integrated appliances make sense and are becoming an increasingly popular technology infrastructure solution. Do you agree? Are you considering adding this concept into the mix? I’d love to hear your thoughts.
Calling All ISVs: Integrated Appliance Solutions in the Spotlight and for Good Reason was posted at Optimize IT. | http://www.datatrend.com/optimize-it