The current landscape of the software development industry would not look the same without cloud infrastructure and applications offered ‘as-a-service’. Because of the immense capabilities of cloud computing, models such as SaaS (Software-as-a-Service) have been made possible, thus offering ISVs new opportunities for growth and geo-distributed market expansion.
Figures by a recent IDC study have shown that more than 60% of the revenue generated on the cloud comes from Software-as-a-Service. This shows how tightly linked is the progress of the cloud with that of software vendors in terms of cloud infrastructure development, deployment of software on the cloud, and future scalability projects- moving laterally towards the expansion of both models. Apart from the agility of cloud infrastructure, made to adapt to the needs of ISVs, there is also the advancement in virtualization and containerization technology driving innovation for software companies around the globe.
What is the outlook for software migration on cloud infrastructure?
Transitioning to the cloud and the digital transformation of software companies is not always as simple and straightforward as it may sound at first. An in-house software developer who is not trained in the cloud may find it overly challenging dealing with the whole migration process including DevOps, automated deployments, and cybersecurity monitoring. This has opened a new market for cloud infrastructure outsourced as a service (DaaS) with maintenance and support services by competent experts in this highly specialized niche. Nowadays ISVs don’t have to worry about the whole transition process and all the supplementary work required from them to keep their systems up and running.
How has the ISV model changed based on the advancement of the cloud?
The advancement of the cloud has brought a big change in the business model of ISV and how applications are purchased and sold as a service. In the past, business executives of software development companies were looking for innovation and tools which can be used to streamline and optimize the operations of their companies, whereas today, the people in charge already have the tools in their hands by means of the cloud. Their role has massively changed from being innovators to becoming marketers and salespersons, who are now mainly responsible for driving company and revenue growth in a linear upwards motion. Business customers, on the other hand, have also raised their expectations for the quality of the service provided, user experience, and application functionality as a whole.
Why has cloud infrastructure become a critical part of SaaS?
There is an ever-rising number of software companies that are embracing the cloud and the SaaS business model as a gateway to further growth and developments. The difference between ISVs that have made the transition to offering their applications ‘as-a-service’ is not only evident by the high turnover indicators of ISVs on the cloud, but also by the lack of business opportunities for the traditional model, requiring development and supply of software on-premise. Many business customers are reluctant to this model, which carries more risk and less agility for their enterprise. Working with SaaS and DaaS, allows companies to be more flexible with their remote workforce and rely on highly available systems thanks to the advancement of the cloud infrastructure- enabling these perks and functionality. This shift in customer demand for cloud-hosted developments has also kick-started a big movement of cloud-native application developments, which require no migration and take innovation a step further as a way to drive business growth and bigger capital turnover.
The conjunction of software developments to cloud infrastructure has changed the operational processes for ISVs largely in recent years. Vendors are already working towards goals that focus more on the customer, discovering new markets, and delivering functionality rather than maintaining in-house infrastructure as part of their solution. Incorporating the cloud into their business model has already turned into a more secure, affordable, and profitable strategy for many software vendors worldwide.