1170RA Cloud ISV Transition Strategies - New Challenges, New Best Practices

What is Happening?  As many of our readers know, for the past seven (plus) years, Saugatuck has been researching ISV and Master Brand transitions into the Cloud with SaaS, PaaS and IaaS offerings. Our earliest research was based on dozens of interviews with pure-plays and on-premises providers, and we have continued to reach out over the years to identify the most significant challenges that transitioning vendors face and the best practices they use to ensure success in the markets they are pursuing.

With Cloud adoption poised to accelerate even faster this year, Saugatuck has initiated a focused research program in 2013 to refresh and expand this research, reflecting the evolved set of issues and challenges brought about by the shift to the Boundary-free Enterprise™. This applies equally to pure-play Cloud ISVs entering the market as well as traditional ISVs evolving their offering portfolios with new Cloud solutions. However, our research also will focus on two additional groups – business and services providers developing repeatable cloud-based solutions, as well as name-brand (non-IT) businesses that are bringing new products / services to market that leverage the Cloud (and associated mobile, social and analytic technologies). One of many great examples in this regard is a case study of Rossignol, as they rethink customer engagement and value.

Why is it Happening? Compared to several years ago, the technology issues facing ISVs have evolved significantly, and are for example less about multi-tenancy versus virtualization and more about performance monitoring and data management. The role of partnering has assumed major significance as Cloud solutions providers (CSPs) increasingly focus on their value-add and don’t try to reinvent the wheels that partners can provide more economically.

Given this, we have evolved our base-line model, now identifying seven key areas of transition challenge facing providers today:

• Executive/Financial
• Technology
• Operations
• Sales and Marketing
• Partnering and Alliances
• Organizational
• Cultural

In each of these areas there are significant issues facing providers transitioning to the Cloud, as well as an evolving set of proven best practices that can reduce risk and increase the chances of reward.

As in the past, we are once again reaching out to our research network for feedback about these challenges and best practice. If you are a software vendor (pure-play or traditional ISV), or an executive at a services provider or traditional business brand developing and bringing to market cloud-based business services – we would value your input in a brief web survey that we have created. The survey should take no more than fifteen to twenty minutes to complete. As with other surveys that we conduct, all responses are confidential, with the results aggregated. Qualified survey takers will receive a special follow-up summary of the findings.

Please CLICK HERE to take the survey, or copy this link into your browser:

https://www.surveymonkey.com/s/7RHG99W

Market Impact  As we have been saying, Clouds are on the rise – and this includes every form of Cloud from Public to Private to Personal. On-premises businesses, including systems integration and outsourcing, will continue to decline through the next several years. The next wave of ISVs rapidly transitioning to become Cloud solution providers face many more complex challenges than the earlier wave, but there are also better platforms, solutions and solution partners to enable them. Not the least of these challenges will be to understand the potential for loosely-coupled architectures and to build and manage Cloud distribution channels and partnerships.

Find below some Saugatuck Strategic Planning Positions (SPPs) that reflect some of our thinking and guidance:

• By YE2013, 30 percent or more of early SaaS market moves (pre-2010) will have begun a major redesign of their solutions to make possible integration with the emergent Cloud / Mobile / Social / Advanced Analytic architecture driving the Boundary-free Enterprise™.
• Through at least YE2017, loosely-coupled architectures will be the primary approach valued by enterprises to enable necessary integration.
• Through 2017, one of the most significant challenges that traditional ISVs face in creating a successful Cloud business is the cultural transition from being “product”-focused to being “services”-centric.
• Through 2017, buyers will engage with new channels and will increasingly look to platform providers / aggregators, managed service providers, VARs and SIs as providers of Cloud solutions and related services.

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Mike West was the lead author on this Research Alert, with Bill McNee a contributing author.