Technological upheavals and innovative business models have all but shut down traditional independent software companies while turning every business into a digital business. Some of the main drivers of this transformation include the adoption of the cloud-based and SaaS-based business model, which enables vendors to quickly move from a cloud-based approach to a cloud-only approach.
It is clear that independent software companies must change to reveal a higher level of technological competence in order to meet the exponential technological demands of companies. Simply put, they need to acquire the expertise to deliver inventive solutions to their clients. On the contrary, if software companies fail to modernize, there is a good chance that they will disappear by 2025.
The challenge an independent software vendor faces in their quest for modernization is that the majority of businesses still struggle to understand the need to transform their businesses and systems. It is imperative to undergo transformation of existing systems and processes, but the costs and risks involved are comparatively high. Transforming existing legacy systems without disrupting new systems and infrastructure requires a system that provides access to existing systems.
Software products and their future:
Let’s check out the impact of disrupted technology and business models on software products and independent software vendors.
We are seeing a shift from the traditional software licensing model to the Software as a Service (SaaS) licensing model. In addition, enterprise software is rapidly transforming into enterprise SaaS.
As companies prepare to adopt transformative business models, they have started using utility computing and SaaS, while moving from the Capex model to the Opex model.
The revolutionary shift to a platform-centric world has allowed businesses to operate in new ways. New platforms will support each software product as a producer, consumer or match maker.
As businesses become more interdependent and connected, independent software vendors will no longer have to manage software product configurations, integrations, and functions independently.
Micro-service-based architectures and digital applications will quickly replace monolithic architectures and stand-alone applications.
Universal computing, high quality performance and consumer grade UX / DX / CX in enterprise SaaS applications will be driven by customer expectations and demands.
Factors that prevent software companies from modernizing:
Although companies are looking for technological modernization, software companies still hold back from modernizing their software products, why? Let’s go check:
Outdated technologies and skills: Software companies still use their thousands of software products on legacy technologies like Progress, FoxPro, COBOL, etc. which makes their maintenance difficult. In addition, the developers and engineers who built these software products have outdated skills, which is one of the biggest obstacles to modernizing ISVs. However, these engineers have skilled expertise in various legacy technologies, they lack the skills essential to modernizing independent software vendors.
Consideration of costs: There is no doubt that independent software companies had invested their considerable resources, time and money to create enterprise class software products / applications. Therefore, even after knowing that the obsolete technology and the product have no future, they continue to run such software. It is very common for ISVs to find themselves trapped by such cost considerations and find it difficult to envision future needs.
Fear of failure and aversion to risk: Many ISVs feel that modernization is an inherently risky practice without any certainty. Perhaps they are not sure of the right modernization strategy or do not have the necessary capacities and resources. So for various reasons, risk aversion and fear failure, independent software companies are keeping the modernization discussion off the table.
Modernization and transformation are the only solution:
In this rapidly changing technological landscape, businesses are turning to digital platforms. If a software company fails to do this, it may shut down or die after a while. To avoid this deadly spiral, independent software companies must rethink and embrace new technologies to turn their old software into native digital applications.
Source by Andrew Hudson