In an enterprise app world where features such as being open, social and mobile and subscription based licensing are no longer differentiators, we see GTM strategies of the leading enterprise app vendors with *ISVs and developers quickly gaining traction. According to RedMonk developers are the new kingmakers, and as such, the main vendors are competing for ISV and developer market and mind share. The focus is on recruiting ISVs and developers to support their platform as well as building the overall ecosystem. And appstores are becoming the embodiment of ISV & developer partner success.
In the meantime, ISVs and developers are at a cross roads. Economic challenging times do not leave room to experiment or bet on two horses. Platform and development decisions need to be made, today. Key considerations for ISVs to decide which platform to develop on are:
- installed client base – what do they use and what do they need
- vendor market share – what’s the revenue opportunity available for partners
- vendor reputation & partner readiness – ease of doing business
- technical specs – ease of use and technical assistance / accessibility
- business perks – product positioning and financial benefits
- investments & payback ROI – training & learning investments, certifications etc.
It’s the first bullet that probably influences the ISV decisions for more than 50% (or so it should). ISVs and developers will choose their platform largely based on customer direction, complemented by mobility, openness, social and data requirements. Secondly, ‘show me the money’ may be an important element from a business perspective whereas ‘ease of use’ is more important from a development perspective. Vendor platform adoption will be fuelled by ease of deployment and limited barriers to entry. Coding and writing is not the most exciting job, if there are vendors who offer neat products that make this exercise easier and more fun to do, these vendors certainly will have an advantage.
Vendor Initiatives to Pamper the Influencers
Though the influence of ISVs and developers is not new, and they have always been an important element of the vendor ecosystem, we do see that the current changing business models increase the influence and thus the importance of the ISV & developer community. Vendors like SAP and SalesForce are just a few names of vendors who recognize that it’s the ISV and developer community that decides the platform choice today. Where enterprise app vendors were used to position and market their ERP suites or application’s functions and features to service and integration partners, they are now broadening their partner messaging to include platform and development capacity. As a result, SAP Hana and Netweaver, SalesForce Heroku and Force.com are receiving full attention from the executive board.
Recent events we attended only reinforce that impression. SAPPHIRE focused heavily on the customer experience. When working with partners SAP states:”We are looking for game changers. We want to inspire our ecosystem to build the edges.” The ISV is one of the ecosystem partners close to the end-user and with extensive technology knowledge. If SAP wants the customer buy-in, they need the ISV buy in as well. The same goes for SalesForce, who states that: ”We are at the start of something big. Partners sit in between the cores [SalesForce apps and customer needs for more functionality in the cloud]. Partners complete the social horseshoe.” As a consequence, ISVs are given a lot of TLC in the respective partner programs of these two vendors. Some of the developments and initiatives we see are:
- Access & availability – Easy access to source codes, API’s & SDK’s freely available. Increase of available technical support. Access to product roadmaps.
- Training & support – Free basic training, decrease of up-front investments (or none at all). Support easily accessible (increased support personnel).
- Marketing & commercial availability – Revamped partner portals (ecommerce platforms for partners, app exchanges), co-marketing funds & initiatives. Direct sales support & sales alignment.
Large IT vendors used to facilitate but now they motivate their partners. In an ecosystem, ISVs and developers are involved early in the development process, ensuring commitment and loyalty for a longer period time. Once ISVs have made their choice, they not only expand on their technical relationship, they also expand their business relationship. With substantial platform investments, an ISV is not likely to switch vendors very quickly. In contrast, if the business is thriving it is very likely that investments will increase.
Customer focus, easy access and technical enablement will be the stepping stones towards ISV and developer commitment for enterprise app vendors. The easier the access is, the more likely an ISV is to commit. Raising the stakes with ISVs and developers is a necessity. It’s about acting now to the best of your ability. To win the battle, you need partners, not the left-overs.
* Leading enterprise application vendors are those vendors holding leadership roles in the enterprise application business ecosystem. In general, an ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments, and to find mutually supportive roles [Moore on Business Ecosystems].
ISVs and developers in that perspective are members in the ecosystem. Entities who have their own capabilities and characters, but who tend to align to one (or more) ecosystem leaders. ISVs develop & commercially sell solutions, or develop & implement them internally. In this perspective they usually add functionality to the software of the ecosystem leader, either vertical (pharma, finance etc.)or horizontal (HR, planning etc.).