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Independent Software Vendors

Globally there are hundreds of Independent Software Vendors (ISVs) that provide software applications to the services sector. Over the past 3-4 years there have been a number of acquisitions’ in this space as large ISVs have seen the benefits of supplying integrated solutions to meet the demands of the services sector, as well as to meet the demands of services organizations within product based enterprises.

Following the "dot.com" bust of 2001-2003 a number of ISVs focused their efforts on selling solutions to meet the needs of internal IT organizations. These solutions, dubbed “Project Portfolio Management” or PPM by some, have made significant inroads over the past few years, but still have not reached critical mass. Over the last 18 months solutions purchased for the professional services sector has begun to increase as the need for external consultants has risen, and work has moved to external services providers. Below is a list of ISVs covered by SPI Research.

ERP

PSA

PPM

It is critical that organizations narrow down their selection to the solutions that meet their specific needs. Independent software vendors all have their own differentiators that make an informed selection process practical. However, for every organization SPI Research expects that there will always be three to five solutions that can sufficiently meet their needs. The trick is in finding the one that does so most effectively. SPI Research segments the ISVs in a variety of ways and differentiates their offerings in twelve categories, summarized below.

No.	Differentiator	Description
1	Heritage	Where the ISV began developing solutions prior to xSA
2	Solution Depth and Breadth	There are approximately 18 core modules for SDOs. Several ISVs offer all, while some offer a subset. Some ISVs offer in-depth functionality in one or several modules, while some offer minimal functionality.
3	Integration	Despite of the number of modules, it has become increasingly important that the solution can easily integrate with other enterprise solutions or specialized applications.
4	Organization Spectrum	Some ISVs focus on either billable service organizations, while others sell to internal departments that support both internal operations and external customers. The importance is related to how the solution supports billable operations and external clients.
5	Vertical Market	Some ISVs sell to a variety of vertical markets, some are more focused with in-depth embedded industry processes and knowledgeable professionals.
6	Customer Size	Most ISVs would prefer to sell to large organizations. However, considering most organizations are mid-sized or smaller, it is critical that the solution can meet the needs of smaller organizations at an acceptable price point and without extensive support requirements.
7	Delivery	Most vendors continue to sell software licenses, with a small percentage of sales moving to “on demand” solutions. However, some ISVs have changed their business model to selling software as a service. This trend will continue to develop, which holds the price of the solution down while providing up-to-date releases for the installed base.
8	Platform	Platform has become less of an issue over the past several years due to stronger integration tools. The two primary platforms used are Microsoft or Sun/Unix. However, the platform issue could become important depending on the organization’s platform for all of its other enterprise applications.
9	Geography	Many North American-based ISVs have significantly increased operations overseas, while a number of international ISVs have minimized their presence in the North American market. What is most important is that ISVs provide local support wherever their solutions are sold.
10	Language / Currency	Many PSOs support operations in multiple countries. Therefore it has become important that the solutions support a variety of languages and currencies. Many solutions support three or more languages with currency support for over 20 currencies.
11	Vendor Viability	If an ISV made it through the dot.com bust, there is a good chance they will be around for while. But considering the amount of M&A activity taking place in technology, the long-term of any ISV is uncertain. However, being acquired can actually help smaller vendors due to increased reach, R&D, capital and support.
12	Cost	Cost is still an important factor when considering the purchase of xSA. SPI Research typically sees the total deployment cost of the solution (hardware, software, services) ranging between $500 and $1,500 per seat. It is also important to consider annual maintenance and upgrade costs. These normally run between 20% and 30% of the initial license cost.