Transformations in the Independent Software Vendors (ISVs) Industry

GS Lab recently completed 17 years and I could not help but reflect on this long journey. For more than 2 decades, we have been dealing with products; 300+ to put a number on it.  We have seen many successful product journeys as well as failures. And we have developed more than 20 products of our own. As the CTO and CEO, I have had the privilege of observing both technological and business transformations. I thought of penning some of them down.

For the last 4-5 years, enterprises, the end customers of ISVs, have been on a digitalization journey. They have been adopting cloud, AI and other path-breaking technologies. Though different industries are at different maturity stages, their journeys towards digitalization have more or less begun. Software products have therefore started aligning to these changes. ISVs are modernizing legacy products or building cloud-native products. They are infusing workflow automation, AI & ML to make sure they do not lose the competitive edge. As a result, outsourcing needs have also evolved.

ISVs are looking for disruptive outsourcing partners who can move the needle for them when it comes to innovation and competitive edge. Though cost advantages are expected, the budgets are now more diverted towards innovation and new technology infusion than ever before.  While working with multiple start-ups and medium to large size ISVs, we have seen a few prominent trends within the industry.

Software product development has become non-linear

This is probably the biggest change. When we started, every product and solution was custom built. We can attribute this non-linearity to the open-source world and ready to use platforms and products. We have all sorts of ready libraries, public clouds, communication platforms and even services like ML services available on call. Now, software product engineering is about knowing the right components for the job, customizing and stitching them together. As a company catering to ISVs, we have to invest heavily in open source technologies as well as product alliances.

More founders are domain experts than technologists

Earlier only technocrats used to start tech companies. Now, more and more cofounders come with domain experience such as healthcare. At times, you may see that none of the founders are technology experts. Therefore, USP is not always technology. The secret sauce is hidden outside technology. Technology tends to be an enabler. Businesses look for technology partners who can define the architecture, decide the stack and take care of engineering.

Newer products are coming to market faster

This non-linearity has enabled speed but we have observed a shift in the thought process too. Companies see trends and are willing to cannibalize their own products by introducing newer products. More and more ISVs, especially startups, want to win, pivot or fail fast. They tend to put MVPs in the end user’s hand, check the performance and pivot. Agile has replaced the waterfall. Agile has become both the mode of thinking and execution. As a product engineering partner, we not only need to be on top of technology but our business processes have to be agile too.

More fixed price and innovative pricing engagements than traditional T&M

Because there is more structure in each phase, ISVs now tend to focus more on the value generated than the time invested.  ISVs now have more fixed-price projects and some work with innovative outcome-based pricing engagements.

Alliances for non-core work

For products, especially B2B products, we all know how crucial the ecosystem is. The product needs to fit and work seamlessly in the customer environment. The product needs training, customization and support for good usage. Earlier, product companies would take this work on themselves but in the last few years, it is largely outsourced to partners with product and domain expertise. With APIs, the development and partner community is encouraged to work on specific use cases so that the internal team focuses on core functionalities.

5G and CBRS open up newer avenues

While cloud platforms are trying to do everything from hosting to ML services, 5G and CBRS are enabling Private LTE & computing on the edge. This opens up numerous opportunities. We are working on some cool products in the space. Many existing products may choose 5G as the underlying infrastructure.

The ISV space continues to evolve at a rapid pace. The opportunities and engineering challenges keep us ticking. Our customers come up with new-world ideas to solve real-world problems. We are lucky to be engineering partners for many such products. Product Engineering is at the core of GS Lab. And we will keep empowering our customers with next-generation technologies, just like we have done for the last 17 years!

Atul Narkhede
Author
Atul Narkhede – CEO, CTO & MD

Atul Narkhede leads the management team at GS Lab and provides strategic & technological direction to the company. He also nurtures long-term technology investments in the company to foster innovation and creativity. He often works closely with customers to design solutions for complex technical challenges. Atul is also the co-founder of kPoint Technologies, an enterprise video product company incubated out of research efforts at GS Lab. Read More