Independent software vendors are bullish about the future, according to new research.
According to Datamonitor, ISVs that indicated that Microsoft was a key partner for them were more optimistic about their own future than those who partnered with IBM, Oracle and others. On a scale of 1 to 4, where 1 is poor and 4 is excellent, Microsoft’s partners rated their outlook a buoyant 3.5, pipping IBM’s 3.4 performance for the top spot. Of the other top five most significant partners for global ISVs (based on number of mentions), Oracle came in next at 3.33, followed by HP with 3.23 and Business Objects at 3.17.
Beyond the better than average outlook for Microsoft’s partners, an equally important story emerges: ISVs are feeling more positive about their future these days. While 11% expect to be acquired in the next 2 years, most feel fairly positive about the future of their piece of the ISV sector with an average sector rating of 3.0 out of 4.0.
Overall, ISVs are looking more optimistic these days, which is important to driving both solution innovation and end-user confidence in the software space. While consolidation is bound to continue and is indeed a good thing, the picture is becoming rosier than it has been since the downturn. Focus will be crucial to successful performance.
Vertical focus is key to many ISVs’ strategies in terms of both development and channel plans. The hotly contested financial services and public sector verticals were, perhaps not surprisingly, seen as key targets with 23.0% and 18.1% believing that much of their growth going forward would come from each industry respectively.
The SME space is also crucial for growth with 89% indicating that between 11-50% of their revenues come from small to medium enterprises. Many ISVs expect the percentage of their business coming from SMEs to grow going forward. This will put substantial pressure on their channel models, driving much of the volume toward indirect channels and increase the push toward hosted solutions. In short, things are looking brighter for ISVs – particularly those with the right connections.
