The Growing Influence and Value of ISVs

For today’s vendor, partnering with ISVs means expanding market reach and increasing the likelihood of satisfying customer needs.

By Larry Walsh

Value no longer resides in a single product or service. Value is the accretion of systems through the combination of multiple technologies working in concert. Vendors looking to build greater value for their customers, expand their market coverage, and accelerate their time to market may want to take a look at their old allies, independent software vendors (ISVs).

Vendors dealing in hardware, software, or cloud services are increasingly finding more value in working with friends and foes alike to accrete greater value in their products and services, find new go-to-market resellers and customers, and improve overall quality and customer satisfaction.

The collaboration of ISVs and vendors is nothing new. The technology market depends on interoperability – software vendors’ products working with other vendors’ hardware, software, and clouds. Without interoperability, vendors limit their market opportunity.

By working with ISVs, vendors are finding new markets to enter, partners that will promote and sell their products, and customers that may not know of them or their value propositions.

Case in point: Microsoft, which is arguably the world’s largest ISV.

Everyone knows that Windows built Microsoft. Under former CEOs Bill Gates and Steve Ballmer, Windows served as the cornerstone of all new products and services. Products not attached to Windows – the biggest platform in the world loaded on to hundreds of millions of PCs and servers – would be marginalized or rejected by Microsoft management.

Want an example? Remember Microsoft Courier? Of course you don’t. This revolutionary tablet, which Microsoft developed before the Apple iPad, never saw the light of day because it didn’t run Windows. Microsoft basically surrendered the mobile market because it was wound so tightly around Windows.

Microsoft is different now. Under the stewardship of current CEO Satya Nadella, Microsoft is arguably the world’s largest ISV. In his new book, “Hit Refresh,” Nadella lays out Microsoft’s strategy of having software wherever users are. In practical terms, this means untethering Microsoft’s applications from Windows and making versions available for Android, iOS, the various flavors of Linux, and whatever operating system or platform that may come around.

In a recent 2112 podcast, Gavriella Schuster, Microsoft’s global channel chief, elaborated on the friction that’s created when competing vendors form partnerships. The ultimate goal of these relationships, she says, is satisfying customers’ needs while strengthening each vendor’s core businesses. And achieving that goal of mutual benefit means vendors partnering with other vendors or ISVs must accept periodic losses in exchange for long-term gains.

Ultimately, vendors should stop thinking about ISVs as complementary or joint marketing partners and start thinking about them as routes to market. Here’s what vendors can gain.

1. Being Where Customers Are: If customers are using a device, application, or cloud service that interoperates or complements another vendor’s product, partnership is an opportunity for opening new market segments and revenue opportunities.

2. New Partners, New Channels: Partnering with other vendors and ISVs opens access to their channels. Their resellers and integrators may not partner with you directly, but they may influence the sale of your products to their customers.

3. Expanded Brand Recognition: By working with complementary companies, vendors can expand recognition of their brand and value to customers.

4. Satisfied Customers: No one product can satisfy all of customers’ technology needs. By working with complementary vendors and ISVs, vendors can better meet the IT needs of their users, as well as win and retain new customers.

5. Better Intelligence: Collaborative go-to-market relationships with competitors and complementary companies will expose new use cases and customer needs that can lead to product improvement.

While working with competitors, and even allies that have their own agendas, doesn’t always feel comfortable, leveraging ISVs, complementary vendors, and, in certain cases, rivals can produce greater returns than staying in cloistered channels and routes to market.


Larry Walsh, The 2112 Group

Larry Walsh is the founder, CEO and chief analyst of The 2112 Group. Follow him on social media channels: Twitter, Facebook, LinkedIn.