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The Meteoric Explosion of Cloud Vendors: How ISVs Can Cut Through the Clutter

To say cloud is driving enterprise innovation and digital transformation would be a cosmic understatement. I’ve been elbows-deep in the tech industry for more than two decades, and the current rate of change is unprecedented during my tenure. In just a few short years.. Continue


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To say cloud is driving enterprise innovation and digital transformation would be a cosmic understatement. I’ve been elbows-deep in the tech industry for more than two decades, and the current rate of change is unprecedented during my tenure. In just a few short years, cloud has skyrocketed from a disruptive presence to become the expected approach to IT.

Here are a few stats to prove the point: This year, the SaaS market alone will likely reach $85 billion (it was worth $14 billion just five years ago) and will reach $113 billion by 2021 according to Gartner. The average SMB now uses somewhere between 70 and 124 SaaS applications.

Independent software vendors (ISVs) are at the nucleus of this explosive growth. The adoption of cloud computing is a boon to ISVs, providing near limitless opportunities to those who understand how to successfully compete in this shifting space. But it’s already a crowded marketplace, and the route to market is not always easy—or direct.  

One million ISVs by 2027?

Faster and cheaper cloud technology is fueling the growth of ISVs in every single category, vertical and industry. In turn, the expansion of these ISVs enhances the overall value of cloud services and solutions delivered how, where and when end customers want them. And the ISV population is exploding globally.

According to ISVWorld, the number of ISVs grew from 92,000 in 2013 to 175,000 in 2018. Forrester’s Jay McBain gave the following bold prediction: “I wouldn’t be surprised, with the level of hyper-specialization new buyers are demanding, to see (the number of software companies) grow to 1 million by 2027.”

Cloud marketplaces are a SaaS ecosystem multiplier

Cloud marketplaces are growing rapidly as both consumers and businesses demand self-service and automated offerings.

Apple’s App Store boasts 2 million apps—up from just 500 in 2008. Google Play Store now has more than 3.5 million apps—and Google didn’t even have an ISV program for its fledgling app store 10 years ago. On the corporate side, Amazon’s AWS Marketplace has thousands of ISV solutions, and Microsoft’s cloud marketplace claims 100 million active users. IDC predicts that Salesforce and its ecosystem of partners and customers will generate $859 billion in new business revenue and 3.3 million new jobs worldwide by 2022.

Growth fuels competition

The growing number of ISVs and cloud marketplaces fuel competition and innovation—both positive developments for ISVs who are able to rise to become disruptors in the market, but not such good news for those ISVs that end up simply disrupted. In a crowded marketplace, how can ISVs—particularly smaller and mid-size ISVs—position their companies and their solutions for maximum exposure and maximum revenue? That is, perhaps, the billion-dollar question.

In this first of a three-part series, we glimpsed the state of the ISV market in 2019 to better understand the climate in which ISVs are currently operating. In two follow-up posts, we’ll focus on the go-to-market dilemmas facing ISVs as they search for the most expeditious route to revenue and then wrap up the series with some insights into the cloud marketplace as a distribution channel and how to select a channel partner with the most value to add.

You’ll hear more about the future of ISVs at Cloud Summit X in San Diego from March 11-13, 2019. To register for the event, visit https://www.ingrammicrocloud.com/cloudsummit/.