How software providers benefit from cloud transformation: Tips and strategies for ISVs

Why cloud transformation should be a top priority for software vendors

The software industry is evolving rapidly. Adapting to technological innovations and redesigning business models is essential for independent software vendors (ISVs) in order to remain competitive. The targeted integration of cloud technologies is a key element of this. Cloud transformation refers to the process by which companies adapt their IT infrastructure, applications and business processes in order to utilise cloud technologies effectively. This involves migrating existing on-premise systems to the cloud, optimising work processes and adapting the corporate culture accordingly in order to exploit the full efficiency and flexibility of the cloud. This not only enables software providers to significantly improve their product offerings and make them more efficient, but also to tap into new markets. The cloud also offers the opportunity to react more flexibly to market changes and increase service quality through increased availability and scalability.

The most important reasons why ISVs are moving to the cloud

• Increased competitiveness: The use of cloud services offers ISVs decisive advantages in order to remain competitive in the global market. They can react more quickly to market changes. Release cycles can be accelerated and updates with innovative features can be provided more quickly.
• Meeting customer requirements: Most companies are undergoing a transformation process themselves and expect their software providers to offer flexible and modern solutions accordingly.
• Subscription-based business models: These approaches offer digital solutions on a subscription basis that provide ISVs with recurring revenue and therefore greater financial stability.
• Expanded market reach and customer base: The cloud enables ISVs to offer their solutions globally without the need for physical products or complex distribution systems.

Central challenges of cloud transformation for software vendors

Transitioning traditional business models to the cloud presents ISVs with a variety of challenges. For an efficient and competitive migration and long-term success, the following aspects in particular should be considered:

• Selecting and implementing suitable cloud services: Careful selection of the cloud platform that meets individual requirements and optimally supports business objectives can contribute significantly to the efficiency of the solutions offered.
• Reorientation of the business model: In order to successfully offer SaaS solutions, software providers must redefine their business model, including licences, prices and contracts. A strategic adjustment of product development and marketing is crucial.
• Attention to security & compliance: The highest security standards and compliance regulations are essential for customer trust. A prudent choice of cloud provider that offers comprehensive security measures and certifications is essential.
• Selection of technologies & tools: Another factor is the systematic selection of suitable tools and technologies. In view of the fast pace of change, it is advisable to use resources such as the "Cloud Native Computing Foundation Landscape" or involve competent partners in order to make the best possible decisions.
• Cost and resource management: Equally important is planning and implementing a cloud transformation that is customised to the software vendor's needs to avoid unnecessary costs and ensure the solution is cost-effective.

Systematic implementation of these key topics will enable software vendors to successfully manage their cloud transformation and stay ahead of the competition. Careful planning and implementation is crucial for long-term success in the cloud.

Variants of cloud transformation: different approaches by ISVs

Software providers can pursue different approaches in their cloud transformation, depending on the existing prerequisites and the individual pace of development. These variants reflect both the complex technical challenges and the strategic business decisions that ISVs must master on their path to full cloud integration.

• Traditional ISVs: These companies are taking their first steps with digital technologies and are gradually adapting their traditional software products to the new technological requirements. The transition from a purely on-premises environment to the cloud is often technically demanding and requires a comprehensive overhaul of the existing architecture as well as a cultural change within the company.
• Hybrid ISVs: In this approach, companies integrate cloud components to improve the flexibility, scalability and accessibility of their services. They retain the control and security of their traditional systems, but at the same time utilise the agility and innovative power of the cloud. The smooth integration of cloud and on-premise systems requires in-depth expertise and ongoing management.
• Cloud Native ISVs: These providers have opted for a cloud-centric approach from the outset and have developed their architectures specifically for the cloud, which enables them to maximise performance, scalability and efficiency. However, in a dynamic environment, they must continuously stay on top of the latest technological developments and respond quickly to market changes.

Each approach requires customised measures to ensure smooth development and long-term competitiveness. It is not just a technical change, but a business transformation with new opportunities for growth and innovation.

Success factor partner: support with cloud transformation

Cooperation with an experienced partner in cloud transformation can bring significant strategic advantages for software providers. A specialised partner not only has comprehensive technical expertise, but also provides significant relief. This support allows the software provider to focus more intensively on the core areas of its business and thus strengthen its competitiveness. Here are four key points that should be considered when selecting a partner:

• Technical expertise and experience: Check the partner's technical expertise and previous successes in similar cloud transformation projects. A partner with relevant experience can offer valuable insights and proven solutions tailored specifically to the needs of ISVs.
• Comprehensive service offering: Consider the full range of support services the partner offers. Long-term support is crucial for the continuous optimisation and adaptation of your cloud solutions to changing business conditions.
• Adaptability and innovation: Software providers should pay attention to how flexible and innovation-oriented the potential partner is. In a rapidly changing technological landscape, it is important that the partner is able to respond quickly to new trends and offer innovative solutions that meet evolving requirements.
• Cultural fit and communication: Cultural fit and effective communication are crucial for a successful partnership. A partner that shares similar values and maintains a clear, open communication style can facilitate collaboration and lead to better results.

Careful evaluation of these aspects helps to establish a partnership that not only fulfils technical needs, but is also strategically aligned to successfully guide the ISV through the cloud transformation.

Mastering cloud transformation: Different paths, one goal

Software providers that proactively tackle cloud transformation not only set themselves apart from their competitors, but also secure a crucial position for continued growth in an increasingly digitalised economy. Migrating to the cloud opens doors to new business opportunities, allows access to innovative technologies and improves operational efficiency.