ISV Migration to SaaS

With customers embracing the zero-capex,layers, as follows:a. Infrastructure as a Service (IaaS) -
on-demand model represented by Software as aBare Metalb. Platform as a Service (PaaS) - Bare
Service (SaaS), ISV's have to react to the change inMetal + Fabricc. Software as a Service (SaaS) - Bare
the market, to remain in alignment with the market andMetal + Fabric + Application/Framework
continue sales growth.All in all, an ISV who becomes a SaaS Vendor has to
An ISV with a conventional on-premises applicationtake on far more work and responsibility, with the
has a tricky transition to make, involving both businesspossible exception of having less software support
and technical issues.work to do. This overall increase in responsibility has
Many such ISV's will migrate an existing application toimplications for both the technical community and the
the SaaS model, leading to a situation where thecommercial community within the ISV. In particular, it is
application can be offered as both an on-premisesimportant that the migration plan be fully funded and
application and as a SaaS application.resourced, which means that the ISV must consider its
Other ISV's, especially those with a relatively oldbusiness plan very carefully. Not least, because, whilst
application, will decide to 'end-of-life' the application andthe migration to SaaS incurs cost, the associated
develop a new generation of application built, from thesubscription model tends to delay the 'break-even'
ground up as a SaaS application.point. This causes a 'funding chasm' which has,
Whatever migration route is chosen, in addition totraditionally, been associated with SaaS applications.
developing the SaaS application, the ISV embracing theGiven the inherent nature of the SaaS model's
SaaS model also has to provide a wider SaaScash-flow, it is important for the ISV to make the
Ecosystem, including Subscriber Management,effort worthwhile. This means that the ISV must be
Provisioning (System and Module levels), Pricing Engine,sure that it can drive profit from a more efficient
Billing Engine, Payment Processing, Applicationmeans of operating a software business and must
Management etc. Providing such Ecosystem facilitiestake the opportunities that exist to reach out to new
can easily account for 20% + of the overallmarkets, either in different tiers of the market or in
development effort.other countries/geographic regions.
In addition to the monetization and applicationThe ISV must carefully consider the ROI of the
management ecosystem surrounding the application,investment opportunity and ensure that there is plenty
the ISV embracing the SaaS model also takesof up-side to justify embracing the SaaS model. The
responsibility (directly or indirectly) for infrastructure andISV has also to consider the rate at which customers
operations management. A few ISV's will build theirare adopting SaaS, together with SaaS migration
own infrastructure on which to run the application, buttimescales and likely competitive moves in order to
most will outsource operations to a suitable hostingestablish the correct timing.
company. This marks a radical shift for most ISV'sIn view of the complexity and importance of the SaaS
who have been accustomed to their customersmigration decision, ISV's could be well advised to seek
providing the infrastructure and operating the systemsSaaS Consultancy help in order to gain the benefit of
themselves.an independent view and to obtain best practice
The ISV therefore needs to take a view of theinformation in order to speed 'time-to-cloud' and
infrastructure and may view that infrastructure inminimize risk.