Ideal ISVs for Cloud hosted SaaS

In 2009, we did some interesting market validation to see how potentially large the Australian SaaS (Software as a Service) ISV (Independent Software Vendor) market was. As part of this exercise, I created a chart to help me to find the ideal candidate ISV for the cloud hosted SaaS provisioning project we were working on at that time.

The following diagram is that chart:

Preferred ISV Chart 1

On the vertical axis we were focusing on the characteristics to on-ramp a new customer. With the horizontal axis representing the amount of consulting work required. The ideal candidate for us would of been an ISV, where the customer can self provision through the Internet without need for upfront consulting.

The intriguing item that arises from this, is that a traditional IT company focuses on selling Consulting services, or for that matter as an ISV it is potentially the Channel that provides the consulting. Here in Australia, we found few ISVs that purely concentrated on development of a product. In fact, it would appear more so, that consulting organisations have software that helps uniquely differentiate their consulting offerings in a competitive situation.

That then means that the complexity to get a new customer onboard quickly is not a priority. There were long sales cycles, with long implementation projects, where the business grew through providing more professional services.

Now this of course was in strong contrast to what we had researched on the Internet. The growth rates were going to be coming through SaaS enablement of software (reduce post-sales signup complexity and cloud hosted) to get customers onboard quickly. Or was it?

Well it is, but not within the Australian ISV markup that was concentrating on selling just within their local markets. The volumes of customers just aren’t there. For some product offerings the market is for all intensive purposes saturated and their customers, at that time were not asking for SaaS based offerings.

As we were unable to find multiple ISVs that considered onramping new customers a current or perceived future issue we were unable to find within the Australian market, our ideal ISVs. I’m sure that one day they will exist, but I’m not just not sure when!

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