2022 has been a tumultuous year for many independent software vendors (ISVs). The Russia-Ukraine conflict, COVID-19 pandemic, Great Resignation and other global events have forced ISVs to rethink the way they work. But looking ahead, the global marketplace for ISVs is positioned for a rebound.
Market research suggests the worldwide ISV market could expand at a compound annual growth rate of 9.69% between 2022 and 2027 and be worth more than $162 billion by 2027. To capitalize on this projected growth and keep pace with market challenges, ISVs and their customers must plan ahead. And, with a clear understanding of the following market trends, ISV businesses and their customers can be well-equipped to survive — and thrive — in the new year.
1Thought Leaders Will Dominate
ISVs can no longer “wait and see” what customers want. Instead, they must understand customer expectations in relation to the rapidly evolving technology landscape. That way, ISVs can show customers why they should invest in new technologies. They can also become ISV thought leaders that inspire their customers to take action, buy their products, services and solutions and maximize their value.
To become an ISV thought leader, it pays to know customer pain points. For example, there’s an $8.5 trillion global talent shortage affecting the IT space and many other sectors. This shortage is expected to linger through at least 2030. As a thought leader, an ISV can bring up how it’s addressing the IT talent shortage. It can offer products, services and solutions that help customers keep pace and move ahead of industry rivals. In doing so, an ISV thought leader empowers its customers to become thought leaders themselves.
2Hiring IT Talent Won’t Be Enough
Even if a business hires top talent, there is no guarantee skilled professionals will stay on staff for an extended period of time. The Great Resignation is ongoing, and it shows no signs of slowing down anytime soon. But, with the right approach to talent retention, an ISV can help its customers keep their top talent happy and engaged long into the future.
Being strategic is a talent retention difference-maker. An ISV should find out what its customers are already doing to recruit and retain staff and offer tips and guidance to improve on their daily efforts. Vendor solutions can help customers create employee engagement surveys and questionnaires that can be used to check the pulse of a workforce. On top of these, an ISV can help gather and analyze industry data that showcases how its customers stack up against their competitors. These techniques provide an ISV’s customers with insights that they can use to level up their talent recruitment strategies.
Don’t forget to help with succession planning, either. In the worst-case scenario, business leaders exit, and a company is forced to quickly figure out how to stay afloat, resulting in poor decisions. Fortunately, an ISV can help a customer create a succession plan that keeps its business moving forward, regardless of if and when a leader departs.
An ISV can offer a best-in-class HCM suite as well. The suite can provide data and insights into talent retention, onboarding and recruitment. It enables an ISV to repeatedly assess a customer’s ability to attract, recruit, engage and retain talent and find ways to improve.
3Data Science Will Drive a New Wave of Digital Content.
Digital content is a trademark of a successful business. It’s produced for consumers, employees and many others. It is also putting ISVs and their customers to the test, particularly when it comes to delivering quality content in alignment with their target audiences.
ISVs can help their customers create digital content programs with the hopes of generating top-notch content, quickly and efficiently. They can utilize data science to capture insights for their customers, optimize their existing digital content and produce better content.
By providing tools like RISE with SAP, an ISV can give its customers access to data relating to their digital content and transform this information into meaningful insights. Plus, the vendor can provide its customers with insights into potential growth opportunities. Once it does, a customer can produce content in conjunction with its overall business strategy. This can help the customer make significant strides in a short period of time.
4Areas of Verticalization Will Become More Blurred Than Ever Before
It’s great for an ISV to say it specializes in life sciences, manufacturing or another vertical. However, many ISVs are going all-in on verticalization. This is blurring the lines of verticalization, to the point where it’s unclear what exactly an ISV does and what industries the vendor serves.
Cross-verticalization represents a step up from traditional verticalization for ISVs. With cross-verticalization, an ISV has the ability to connect with consumers in a vertical at any point in the buyer’s journey. When it does, the vendor can showcase the value it offers relative to that particular sector.
Ultimately, cross-verticalization empowers an ISV to be opportunistic. It requires an ISV to understand a vertical’s target audience and tailor its content to it. At this point, the vendor can keep its target audience engaged and foster long-lasting customer relationships.
5Consumption and Adoption Will Create a Path to Continuous Transformation
An ISV can track consumption and adoption across its customer base. In the past, many ISVs monitored consumption and adoption over prolonged intervals. Yet, doing so today may prove to be more trouble than it’s worth.
The pace of business is constantly increasing. If a company is not satisfied with an ISV, it won’t wait to make a change. On the other hand, an ISV that can deliver “manageable outcomes” can establish realistic consumption and adoption goals — and keep its customers happy by matching or surpassing these goals time and time again.
To get started with manageable outcomes, an ISV must learn about its customer base and what it needs. This requires research and a commitment to understanding what a customer needs and what it takes to fulfill them. From here, an ISV can put together customer-centric consumption and adoption goals.
Tools like RISE with SAP provide insights into an ISV’s progress as it tries to help its customers achieve various goals. If the vendor encounters roadblocks along the way, it can address them in their early stages. Most importantly, the vendor can stay on track with consumption and adoption and continuously transform with its customer base.
Start Prepping for 2023 Today
With these trends top of mind, an ISV can get a head start on preparing for 2023. The vendor can then hit the ground running in the new year and position itself for years-long success.